Colombia Employer of Record
If a lack of speed or local expertise are among your top concerns when expanding to or employing workers in Colombia, an employer of record may be the best option for achieving your global growth objectives.
An employer of record, sometimes known as an international PEO, enables you to quickly hire and onboard workers in Colombia―often in as little as two weeks―without having to take on the cost and risk of establishing a local entity.
Learn about the hiring, employment, payroll and benefits requirements for workers in Colombia and how our employer of record service, Global Employment Outsourcing (GEO), and local HR experts can help you manage your international employment needs.
Hiring in Colombia
The primary source of labor law in Colombia is the Código Sustantivo del Trabajo, or Substantive Labor Code.
Companies with more than 10 employees must try to ensure that 90% of the workforce is Colombian, with a minimum of 80%. Employers can request an exception from the Ministry of Labor, but only to hire for specific technical skills and only for as long as is needed to train Colombian workers to do the work. Foreign employees are entitled to the same pay and employment conditions as Colombian employees.
Since employment in Colombia is highly regulated, compliant employment contracts are an essential business need. As your employer of record and PEO in Colombia, we can ensure that every contract, for every worker, meets all requirements. We can also provide you with guidance about cultural norms and hiring best practices and keep you up-to-date with employment regulations as they change.
Employment contracts in Colombia
As you look to hire employees in Colombia, here are some common regulations you’ll need to know to create a compliant contract, as well as how an employer of record and PEO can provide support for your unique HR needs.
The regular workday is eight hours, and the workweek is 48. Employers and employees can negotiate a schedule of between four and 10 work hours per day with no overtime, as long as total hours don’t exceed 48 and workdays don’t exceed six. A rest break in each workday is mandatory, and Sunday is the typical day off.
An employee who works three or more Sundays in a calendar month or regularly works on legal holidays is entitled to another paid day off during the week. An employee who works on a Sunday or legal holiday less often than that may choose either another paid day off or compensatory pay only.
As you consider the appropriate salary to offer new employees, keep in mind:
- Minimum wage is 877,803 pesos per month.
- Collective agreements may regulate the legal salary range, though it cannot be less than 877,803 pesos per month.
- The government sets the minimum wage every year on or before December 30.
- Overtime is paid at 25% above regular wages for daytime work and 75% more for nighttime work between 9 p.m. and 6 a.m.
All employers are required to pay a “prima,” or bonus, to employees twice a year. The amount of the bonus depends on how much income the employer makes annually.
Employers with an income of over 200,000 pesos a year must pay a bonus equal to one month’s salary. One half of the bonus should be paid within the last 15 days of June and the other half within the first 20 days of December.
Employers with less than 200,000 pesos in income are required to pay a bonus equal to two weeks of pay. One week must be paid in June and one week in December.
A probationary period of no more than two months may be agreed to in an employment contract. During this time, either employer or employee can terminate the contract without notice.
Termination and severance
Unless gross misconduct is involved, an employer must give 15 days’ written notice in case of termination.
Employers must request authorization from the Labor Ministry to terminate the contract of an employee who is protected due to a health condition, even with just cause.
Employees are entitled to severance pay of one month’s wages for each year of service and a prorated amount for periods of less than one year unless the termination results from one of several circumstances, such as committing a criminal act against the employer.
Trade union officers cannot be terminated unless a labor magistrate rules that the employer has valid cause.
If an employee is terminated without just cause, the employee is entitled to an indemnity payment. The amount depends on the employee’s length of service.
- Employment of one year or less: 45 days’ wages
- One to five years of employment: 45 days’ wages plus 15 days’ wages for each year of employment after the first year
- Five to 10 years of employment: 45 days’ wages plus 20 days’ wages for each year of service after the first year
- More than 10 years of employment: 45 days’ wages plus 40 days’ wages for each year of service after the first year
An employee may terminate a contract for several reasons, all of which require 30 days’ written notice that must include their reason for termination.
As your employer of record in Colombia, we can work with you to quickly handle the unforeseen event of an employee termination, providing legal guidance and a personalized process that ensures you stay out of labor court.
Employee benefits and paid leave in Colombia
When negotiating terms of an employment contract with a candidate in Colombia, here are some of the statutory benefits and paid leave requirements to keep in mind, as well as how an employer of record can support your company’s benefits strategy.
Maternity leave lasts for 18 weeks at full pay and extends to workers who give birth to a baby, including a stillborn birth, or adopt a child.
At least one week of leave must be taken before delivery, which is extendable to two weeks when medically necessary.
When the employee returns to work, she can take two 30-minute breaks per day for nursing (or as rest breaks) with no reduction in pay until the child is 6 months old, or longer with a doctor’s note, and there must be a place adjacent to the workplace where she can do so.
Employees are entitled to 15 consecutive days of paid annual leave after one year of service, and they are required to take at least six days of leave each year. An employee may choose to accept payment in lieu of as many as half the annual vacation days. A maximum of four years’ worth of leave can be accrued.
Employees are entitled to 18 holidays:
- New Year’s Day
- St. Joseph’s Day
- Holy Thursday
- Good Friday
- Labor Day
- Ascension of Jesus
- Corpus Christi
- Sacred Heart
- St. Peter and St. PauI
- Independence Day
- Battle of Boyacá
- Assumption of Mary
- Columbus Day
- All Saints’ Day
- Independence of Cartagena
- Feast of the Immaculate Conception
When these dates fall on any day other than Monday, the holiday is observed on the following Monday. Employees who work on a holiday are entitled to an additional 75% above their regular pay.
Employees with at least four weeks’ worth of contributions to the social security system are eligible for 180 days of sick leave at two-thirds of their regular pay. The employer pays for the first two days of leave, and the social security system pays for the rest, unless the absence stems from a work-related illness or injury, in which case the social security system covers 100% of wages.
Every resident of Colombia is required to have public health insurance called Entidades Prestadoras de Salud (EPS). EPS includes medical, dental and vision care. Employers must provide this coverage for all permanent employees, and employer contributions equal 8.5% of an employee’s income.
In addition, many people elect additional private insurance. It is common for employers to cover that as well.
As your employer of record in Colombia, we may be able to provide optional supplementary medical insurance coverage for professionals and their dependents at a more cost-effective rate.
The pension plan covers an employee in the case of retirement, as well as disability or death (survivor’s benefits).
An employee may choose either the public social insurance system or a private system and can switch between the systems every five years until the last 10 years before retirement. The employer’s pension plan contribution is equal to 12.5% of an employee’s wages.
Employers contribute between 0.348% and 8.7% of covered payroll to fund workers’ compensation. The exact percentage is based on an assessed degree of risk.
Employer social costs will cover a large portion of employee benefits in Colombia, but we can consult with you about supplemental coverage options, such as additional pension contributions or life insurance, if needed.
Employee onboarding with an employer of record in Colombia
We write and validate all local employment contracts, streamlining the onboarding process for you and your Colombia employees—all you have to do is provide relevant information and review and approve the employment agreement.
As your employer of record in Colombia, we will:
- Schedule a welcome call to discuss HR and employment information for Colombia, as well as answer any questions
- Prepare a customized employment contract in English and in Spanish (or other local language)
- Share the employment contract and benefits information with the new employee for signature and review
- Gather tax and banking information from the employee to set up payroll
- Provide a local point of contact to the employee to answer any questions regarding their employment, local HR or payroll
The entire onboarding process for the employee is often completed in as little as two weeks.
Partner with Safeguard Global as your Colombia employer of record and PEO
With over a decade of service, we are the longest-serving employer of record and PEO provider in the international market. Organizations around the world rely on Global Employment Outsourcing (GEO) to expand and hire in over 179 countries around the world, quickly and compliantly.
We’ve seen just about every global employment circumstance imaginable—and with our extensive knowledge of local law and culture, we know what it takes to get employment right in Colombia. We provide written contracts in the local language, salaries in the local currency and HR support in your employees’ time zone.
Additionally, as a global payroll provider we support payroll administration—including payments, filings and other calculations—in more than 150 countries and can accommodate the payroll outsourcing needs of any size organization.
Whether you’re looking to hire as part of a strategic expansion or to meet specific talent needs, our global solutions advisors can walk you through your international hiring options so you can make the right choice for your organization. Contact us today.
Learn more about Global Employment Outsourcing
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