Legal Requirements As To The Form Of Agreement
Employment contracts can be written or verbal. The parties of an employment contract may agree on additional rights and obligations, but they must comply with statutory obligations; the type of contract, description of the nature and place of work, the amount and manner of compensation (for example, the unit of time, work performed, piece work, etc.), the frequency of wage or salary payments, and the benefits provided to the employee, the domicile of the parties, the date and place where the contract is executed, and the place where the employee is hired.
The parties may agree in the employment contract a trial period, during which the employer may assess the aptitude of the employee, and the employee may assess the conditions of work.
Either party may terminate the employment contract during the trial period without notice.
The trial period must be established in a written agreement between the parties.
For employees hired for an indefinite term, the trial period may not exceed two months. For employees hired for a fixed term, the trial period may not exceed the fifth part of the contract’s duration, and in any case, may not exceed two months.
The Colombian Constitutional Court has stated in its rulings that the employer party should make an objective analysis of the inconsistencies, inabilities, and/or failures of the Employee before using the legal faculty of the trial period and terminating the employment contract unilaterally.
Hours Of Work
The working schedule may be agreed by the parties. If the parties fail to agree the daily shift, Colombian labor law establishes a maximum working schedule of (i) eight daily hours: or (ii) forty-eight weekly hours.
The daily working shift goes from 6 a.m. to 9 p.m. The nightly working shift goes from 9 p.m. to 6 a.m.
The following employees are excluded from the daily working shift hours (i) executive, management and/or trust positions; and (ii) security guards that live in the workplace.
Employers and employees may freely agree on the working shifts in accordance with the ones established in the law.
Overtimes are the amount of working time that exceeds the ordinary working shift of the maximum legal shift. Overtime is limited to a maximum of two daily hours and twelve a week.
If the working hours exceed the maximum working schedule, the employer must request authorization from the Colombian Ministry of Labour.
Employees are obliged to keep a record of (i) the name of the employee; (ii) the number of authorized extra hours; and (iii)of the salary basis.
The forty-eight-hour workweek is usually worked in six eight-hour days, although a long workday with Saturdays off is not uncommon.
Rest periods are required during the day, but a two-hour lunch usually satisfies this requirement. The rest periods are not included as part of the workday for purposes of calculating wages.
Due to the health emergency, many employees are working at home. Work at home does not change the working schedule.
The limits are maintained; therefore, parties must respect the previously agreed working schedule, maintain "regular workload" and "digital disconnect."
Rules during Health Emergency
The health emergency was decreed until May 31, 2021.
During the health emergency the employer can:
- Distribute the 48 hours a week in a maximum of six (6) days, with daily shifts of at least 4 hours and 10 hours.
- Distribute the forty-eight 48 hours a week on four days a week, with 12-hour daily shifts. In this case, overtime will only be generated when the employee works more than 12 hours.
During the Sanitary Emergency, the employer was authorized to organize the work schedule by work shifts as follows:
- A working day of maximum 36 hours per week, distributed over 6 days of the week with daily 6-hour working hours;
- Distributing the same 36 hours per week in shifts of 8 hours a day for 4 days, and one day with a 4-hour shift.
In these cases, overtime or Sunday hours are not paid.
Special Rules For Part-time Work
Part-time work must be agreed in writing. Part-time employees have the same rights as full-time employees. Part-time employees can perform over time.
The part-time employment contract can be converted to a full-time contract.
Colombia enforces a national minimum monthly salary, which is established each year by the National Labor Council or by the government. The parties may agree upon a salary stated in foreign currency instead of Colombian pesos, but the salary must be paid in Colombian currency. If the salary is stated in foreign currency, the employee may require payment at the exchange rate for Colombian pesos on the day of payment.
According to Colombian law, there are two types of salaries:
- Ordinary: An ordinary salary remunerates the regular work. In addition to regular pay, the employee may receive, when applicable, (i) overtime pay;(ii) pay for work on mandatory rest days; (iii) percentage on sales and commissions; (iv) habitual bonuses such as the ones determined by the employee´s performance; (v) permanent travel expenses for employee’s meals and lodging, and (vi) in general, any payment made as direct compensation of the employee’s services.
- Integral / All- Inclusive Salary: Pays beforehand any surcharges and fringe benefits such as severance and their corresponding interests, service bonuses, extra-legal premiums, overtime pay, pay for work on mandatory rest days, the wage incidence of traveling expenses, provisions in kind, and generally all fringe benefits; except vacations.
The integral salary arrangement must be stated in writing. Additionally, it only applies to employees that earn at least thirteen legal minimum monthly wages.
Integral Salary (i) must be agreed by writing, (ii) only applies to employees that earn at least thirteen legal minimum monthly wages, and (iii) social security payments will only be charged over 70% of the salary, iv) Vacations shall be calculated taking into account the 100% of the all-inclusive salary.
Besides, employees who earn an ordinary salary are entitled to the following payments:
- Severance aid: Employers must make an annual direct deposit to a severance fund on behalf of every employee, equivalent to one (1) monthly salary for every year of service and proportionally for a fraction thereof. This deposit must be made in the corresponding fund chosen by the employee, before February 14 of the following year.
There is a possibility that the employer performs severance aid partial payment in the events established under a law that in any case requires an authorization issued by the Ministry of Labour.
- Interests on Severance Aid: Interests related to severance aid payments are paid at a rate of 12% per year.
- Services Bonus: It is equivalent to a 15 working day wage, and it is paid on a semi-annual basis. Payments related to this bonus must be paid no later than June 30 and December 20 of each year.
- Dress and footwear: It is comprised of one (1) pair of shoes and one (1) work outfit to be provided at least three (3) times per year to every employee, in accordance with the task to be performed (no later than April 30, August 31 and December 20). Employees entitled to this benefit are those who earn up to two (2) times the el MLMW and that have been employed for at least three months.
All employees are entitled to a paid annual leave equivalent to fifteen (15) working days for each year of service and proportionally for any portion thereof. Every employee must enjoy at least six (6) continuous days of holidays per year. According to Article 190 of the Colombian Labor Code, employees may only accumulate the remaining days of up to two (2) years, and in some special and concrete cases accumulate and carry over the time for up to four (4) years.
The employer is obliged to grant a weekly day-off for each one of its employees. Besides, the employer must grant a paid day off during religious or civil holidays established by law.
The wage established for working on day-off is an additional 75% of the ordinary salary (and depends on the hours worked).
The calculation of the working Sundays depends on whether the work is done on an occasional or habitual basis.
The employer may grant collective and early vacation to mitigate the reduction in production and income or for isolation measures due to covid-19.
Minors over 15 years old can be hired, previous authorization from the Ministry of Labour. There are no restrictions on working after the normal retirement age.
Employees on sick leave have special protection. However, the leave has a maximum of 180 days renewable to another 180 days. After that time the employee must apply for a disability ruling.
Labour agreements of personnel with a disability or during sick leave cannot be terminated without authorization from the Ministry of Labour.
During sick leaves the employer must pay the employee’s salary as follows:
- First two days are paid by the employer at 66,66%* of the employee’s salary
- From day 3 to day 90 of sick leave the employer must pay 2/3* of the employee’s salary on the payroll and request the refund before the Health Care Provider.
- From day 91 to day 180 of sick leave the employer must pay the 50%* of the employee’s salary on the payroll and request the refund before the Health Care Provider.
- From day 181 onwards the pay will be made directly by the retirement fund.
*In any case, the employee can receive less than a Minimum wage during the sick leave.
Illness/Disability by Covid-19
In case of disability due to Covid-19, the Health Care Provider must pay the value of the disability according to the rules indicated in the previous point.
Now well, if the doctor considers that it is not necessary to issue a disability due to Covid-19, the employee must perform the duties working at home during the isolation.
Covid-19 is considered a direct occupational illness for healthcare employees, including administrative, cleaning, security, and support employees for the prevention, diagnosis, and care of this disease.
Location Of Work/Mobility
Employees who earn less than two minimum legal monthly wage are entitled to receive transport aid. It is equivalent to a sum established by the Colombian Government for each year.
Instead of paying the transportation allowance, an employer may provide daily transportation to the employees.
In the events of illness leaves, holidays and licenses, there is no obligation for the employer to pay the transportation aid. This aid shall be included in the base to calculate and pay fringe benefits by express provision of law.
Furthermore, in case the employer modifies the employee’s residency, it has to pay the travel expenses of the employee and his family.
Digital connectivity aid
During the Covid-19 emergency, employees who earn less than two minimum legal monthly wages and work at home are entitled to receive a digital connectivity aid.
Digital connectivity aid is equivalent to a sum established each year by the Colombian Government for transportation aid.
The transportation aid and the digital connectivity aid are not cumulative.
Colombian Social Security System has three different types of pensions: (i) retirement pension; (ii) disability pension; and (iii) survivors’ pension.
Regarding retirement pensions, there are two regimes. The public regime, in which retirement age is 57 years for women and 62 years for men, and 1300 weeks of contributions. The private regime is managed by private pension funds management companies, which does not set forth a specific age for retirement. In this case, retirement depends on the amount saved in the workers account.
Employee are entitled to a disability pension when he/she lose 50% or more of his working capacity.
Survivors pension is recognized to the employee’s family members who are beneficiaries according to the social security laws.
Parental Rights (Pregnancy/ Maternity/ Paternity/ Adoption)
Every pregnant or adoptive mother is entitled to eighteen (18) weeks of paid leave which can begin two (2) weeks prior to the anticipated date of birth. Of the eighteen (18) weeks of paid leave, the week prior to the anticipated date of birth is mandatory. For multiple pregnancies, the paid leave entitlement is twenty (20) weeks. Maternity leave is paid by the Social Security System, provided that the employee has been enrolled during the time of the pregnancy.
Maternity leave is 20 weeks when there are multiple births.
If the birth is advanced, the advanced are added to the license.
Paternity leave is 8 working days after the birth of the child.
During paternity and maternity leave labour agreement cannot be terminated, unless there is an authorization from the Ministry of Labour.
The license also exists for adopters and homosexual couples.
Pregnant women are also entitled to special protection; their agreement cannot be terminated unless there is special permission from the Ministry of Labour.
There are no compulsory terms established by Colombian law.
Parties are free to agree on non-compulsory terms, provided these provisions are not less favorable to employee than the law or the relevant Collective Bargaining Agreement.
Types Of Agreement
The following are the different types of employment contracts:
- Fixed-term Contract: must be in writing and must set forth the length of employment. Although there is no minimum duration for a fixed-term contract, the maximum duration of such a contract is three years. Generally, a fixed-term contract may be renewed any number of times. On its expiration, a fixed-term contract is automatically renewed for a term equal to the original term, unless the employer or the employee gives the other party thirty days’ notice of termination of the contract or renewal under different terms.
- Indefinite Term Contract: Is used to hire personnel for an extended period providing the employee the greatest sense of job security. A term is not specified, and its duration is not determined by the task or the nature of the job contracted, nor does it refer to an occasional or temporary job. The employer can only cancel this contract if there is just cause defined by the law.
- Temporary Contract: Written contracts are also required for temporary or casual employment. This type of employment encompasses occasional or temporary work done outside the normal course of the employer’s business. The maximum term for a contract of temporary or casual employment is one month; the temporary contract would then need to be renewed.
- For the duration of the work or hired service: The term of this contract depends on the duration of a determined work or task. It is required that the work or task contracted to be precisely described, so the contract must be to be agreed in writing. These types of contracts cannot be renewed.
A temporary contract can be cancelled at any time without any required explanation, but an indemnification for termination without just cause must be paid to the employee.
Employees are required to maintain confidentiality even if no express term is included in the contract.
Ownership of Inventions/Other Intellectual Property (IP) Rights
Intellectual property rights belong to employees unless the parties agree otherwise.
Before hiring an employee, it is important for the employer to verify whether the employee could have enhanced job stability.
Besides, the employee must undergo a medical examination to rule out illnesses that prevent him from performing the job for which he will be hired.
Foreign employees have the same rights and obligations as Colombian employees. However, when foreign nationals celebrate an employment contract in Colombia, both the employer and the employee must also meet additional requirements relating to immigration procedures and the control of foreign nationals during their stay in Colombia (i.e. a Migrant visa).
Furthermore, the employee must report the employment related to the Migration Colombia office, through the Foreign Report Information System (Sistema de Información para el Reporte de Extranjeros – SIRE - in Spanish) and before the Ministry of Labour, by the Single Registry of Foreign Workers (RUTEC).
Hiring Specified Categories Of Individuals
Authorization from the Ministry of Labour is required to hire employees under 18 years of age. Additionally, women and employees under 18 years of age are neither allowed to work at night nor in certain dangerous activities. For telecommuting employees, the employer must proceed with the registry of those agreements in the Ministry of Labour.
Now well, during the covid-19 emergency, employees who work at home must keep the conditions of the employment contract and are not considered as telecommuters.
The maximum working schedule for work at home is 8 hours per day and 48 hours per week. Furthermore, overtime must not exceed 2 hours per day and 12 hours per week and the employer must recognize the payment of overtime and surcharges on Sundays and holidays.
The employer should not send assignments on weekends or days off. Also, the employer must respect established breaks such as breastfeeding breaks.
The employer must include telecommuting among the occupational risks.
Outsourcing And/Or Sub-Contracting/Temporary Agency Work
Sub-contracted employees should have the same treatment as ordinary employees. Outsourcing employees can only be hired to perform extraordinary activities and for a maximum of 1 year.