Employment Law

Colombian Employment Contract

Employment contracts are not entirely required in Colombia, but we strongly recommend that you provide each employee with a written contract. The contract should be written in Spanish and include employment details such as salary, time off, etc. Any references to currency should be in the local currency, Colombian Pesos.

Fixed Term

Indefinite

Colombia Working Hours

The typical working week in Colombia is 48 hours, divided into five or six days. Overtime pay is at least 125% of regular wages and night shift pay is 175%.

Holiday Policy

Colombia Vacations

Employees in Colombia are generally entitled to at least 15 days of paid leave.

Colombia Sick Leave

Generally speaking, employees in Colombia are paid only two-thirds of their regular wages when absent from work due to illness. The first two days are covered by the employer, then the state covers it for up to 180 days.

Maternity and Paternity Leave in Colombia

Female employees in Colombia are entitled to 14 weeks of paid maternity leave, divided into 2 weeks before and 12 weeks after childbirth.

Male employees in Colombia are entitled to eight days of paid paternity leave.

Colombian Tax Laws

Employers and employees in Colombia are required to pay a certain percentage of wages into various social programs:

• Health insurance = 8.5% from employer, 4% from employee
• Workplace risk insurance = between 0.348% and 8.7% provided by the employer, depending on the nature of the job
• Family Benefit Fund = 9% from employer
• Pension = 12% from employer, 4% from employee

Income tax rates in Colombia range from 0% to 39%, depending on income level.

Colombia's corporate tax rate is 32%, but is expected to decrease slightly in 2022.

Health Insurance in Colombia

Colombia does have a social healthcare system, so private insurance is not required. However, many employers do choose to offer private insurance as a benefit, and private insurance may be preferable to public insurance.

Employee Severance Pay and Termination in Colombia

Firing an employee can be difficult in Colombia, and legal action is often taken if employees feel they have been treated unfairly. To avoid this, it is best to reach an agreement with the employee, which may involve offering a bonus.

Employees are also usually entitled to severance pay on termination, equivalent to one month's salary for each year of service.

Salary and Benefits

Colombia’s Compensation Law

The minimum wage in Colombia (2020) for a full-time employee is 377 pesos 803 pesos per month.

Benefits Administration in Colombia

Setting up a benefits system for Colombian employees can be difficult if you are unfamiliar with the country and its unique labor laws. If you want to set up a benefits system independently, it could take weeks or even months, which could seriously delay your expansion in Colombia.

Outsourcing your benefits administration processes ensures you fully understand and follow the rules, ensuring your compliance and significantly speeding up the process. Our Colombian employment experts will help you find and arrange your benefits, advise you on your strategies, and ensure compliance with the law.