Postcard Series: Hiring a worker in Colombia
We created this series to help businesses who are considering expanding and hiring staff internationally.
In this postcard series, members of our sales team provide helpful tips on international employment. So far, we have discussed employment regulations in Chile, Denmark, Brazil, Switzerland and Czech Republic. In this post, Luciana discusses key considerations when employing staff in Colombia.
Colombia is ranked as the 3rd most business-friendly environment in Latin America (2019 Doing Business report, World Bank). This is unsurprising given Colombia’s abundance of natural resources (coffee, oil, gold), their stable economy and highly skilled workforce. Furthermore, government-sponsored incentive programmes make Colombia an attractive destination for foreign investors.
A potential complication when planning an expansion into Colombia is the complex local payroll laws. Therefore, it’s critical to secure local knowledge and expertise to ensure compliance. In this post, Luciana will discuss the most common questions ask by clients about employment in Colombia.
Can I employ a worker using a fixed-term contract if I’m unsure whether they will be a good fit in the long term?
This topic comes up regularly. Fixed-term contracts must always be justified, by the nature of the job to be performed and can only be up to a maximum of three years. Furthermore, fixed-term contracts can only be renewed up to a maximum of 3 times. We recommend using probation periods as a safer, more compliant means for trial periods.
2. Termination Costs
What are the rules and costs involved with dismissing an employee in Colombia?
Fixed-term contracts require a notice period of at least 30 days, to avoid an automatic renewal/extension of the contract.
Open-ended contracts may be terminated with immediate notice. However, if an open-ended contract is terminated without valid cause, the employer must pay dismissal indemnities based on the employee’s salary and length of service.
Severance pay is paid to all employees and is equivalent to one month’s wages per year worked.
3. Statutory Employee Benefits
What are the statutory employee benefits in Colombia?
Statutory paid holiday
Holiday entitlement is 15 continuous business days per year after a one year of employment and does not include public holidays.
Employees are entitled to 18 weeks of maternity leave, during which they receive an allowance equal to 100% of the average salary, paid by the Colombian state.
Fathers are granted 8 days paternity leave. This is fully paid by the employer.
The maximum duration of the probationary period is 2 months, during which the contract may be terminated unilaterally without prior notice at any point. Probation periods must be agreed in writing.
During the probation period the employer is not liable for any termination indemnities.
Using an international PEO/EOR solution to expand into Colombia and hire staff compliantly
If your business is considering expanding into Colombia or another country in Latin America, Capital GES can help you without the need to immediately establish a corporate entity. By choosing to use our International PEO/EOR services you can expand your business in a fully compliant and cost-effective way. Our in-country experts will be able to help you navigate the different regulations and labour laws and assist you with employing staff legally and compliantly in Colombia.
For further information you can contact our LATAM office on +55 31 3194 8150 or email us at firstname.lastname@example.org to see how you can expand your business and hire staff in Colombia.