Hire in Colombia

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Last updated at June 14, 2022

Currency

Colombian Peso (COP)

Capital

Bogotá

Time Zone

GMT-5

Key Country Facts

Introduction

Colombia, officially Republic of Colombia, is a country in the north west of the South American continent. With a population of just over 50 million it is a democratic republic with an elected president serving as both head of state and head of government. Colombia currently is experiencing a fast-growing economy which is the third largest in South America.

Area

Colombia is bordered by Panama in the northwest, Venezuela and Brazil to the east, and Peru and Ecuador to the south. A coastline to the north with the Caribbean Sea and to the west with the Pacific Ocean. Colombia has a total land mass of over 1.1 m square kilometers.

Climate

Due to the country’s close proximity to the Equator, the climate is generally tropical and isothermal without any significant change of seasons.

Culture

Geography has been an important factor as Colombia sits at the crossroads of Central and South America which brings Native American, Latin America and Spanish influences and more recently other European influences. Colombians are proud of their diverse culture, both traditionally and modern.

Religion

Religious freedom is guaranteed by the constitution. The vast majority of Colombians are adherent to Christianity with over 70% identifying as Catholic. Evangelic protestants account for the next largest group and less than 10% claim no religious affiliation.

Official Language

Over 100 indigenous languages or dialects are spoken in Colombia, but Castilian Spanish is the official language and is spoken by over 99% of the population.

Colombia HR at a Glance

Employment Law

Employment in Colombia is governed primarily by the Colombian Labour Code (CST) of 1950 and its subsequent modifications. It governs terms and conditions of employment such as the form and duration of employment contracts, probationary periods, wages, working hours, holidays, termination of employment and collective bargaining.

Colombian labour rules and principles have a constitutional hierarchy, the consequence of this being that employers cannot (even with the employee’s approval) provide conditions worse than those recognized by the law, the constitution or an international treaty or convention.

Employment Contract

Employment contracts are deemed as such if they observe the following three conditions:

  • services are provided by the person directly;
  • subordination from the employee towards the alleged employer;
  • a payment as a retribution of the service provided.

Employment contracts can be both verbal and in writing. There are no statutory requirements, however Spanish is recommended as Colombian authorities will require any employment document to be in Spanish or translated into Spanish.

In Colombia, you have two ways of paying employees’ monthly wage. Each has its advantages and disadvantages, and you can determine which of the options is most suitable for each employee.

Ordinary salary

With an Ordinary salary, the ordinary wage is calculated and paid separately from statutory benefits contributions. On top of that, the employer must provide the employee with certain legally defined fringe benefits:

  • Severance Fund (Cesantias)
  • Severance Fund Interest (Interesses Cesantias)
  • Transportation expenses
  • Holiday/Vacation pay
  • 13th-month salary (prima de servicios)

Integral salary

The integral salary is where all statutory benefits and contributions are packaged into a fixed salary payment. This means that the integral salary includes fringe benefits and potential surcharges, such as overtime for evening hours, Sunday hours, public holiday hours, and extra-legal bonuses. In order for an employee to be eligible for an Integral salary, the employee must be paid at least the Integral monthly minimum wage or more, which in 2022 is COP 13,000,000 (10 monthly legal minimum salary + 30% surcharge). The minimum wage in Colombia in 2022 equals COP 1,000,000 (approx. USD 260).

70% of the integral salary represents the basis to calculate employee’s and employer’s contributions to the Colombian Social Security system. In some cases, the integral salary is a very attractive option, since it can help reduce an employee’s overall cost.

Fixed Term Contracts

Fixed-term contracts are obliged to be in writing to be considered as such. The labour code establishes that the fixed-term contract length is free for the parties to determine, but it cannot exceed three years. Additionally, there is no limitation for the possibility of successive fixed-term contracts or renewals.

However, in the case of fixed-term contracts agreed for an initial period of less than one year, the law establishes a limitation of three successive renewals of the initial contract, after which the period of the contract will be considered indefinite.

Under a fixed-term contract, the employer should notify the employee of termination 30 days before the end of the contract, to avoid its automatic renewal on the same terms.

Probation Period / Trial Period

Employees hired under an indefinite employment agreement can be subject to a probationary period of up to 2 months.

Employees hired under a fixed-term employment agreement can be subject to a probationary period of up to 1/5 of the fixed term agreed upon (not exceeding 2 months). When considering the existence of successive fixed term contracts, the parties cannot agree to trial periods, other than for the first contract.

Working Hours

Both the employer and the employee are free to agree the working hours without exceeding the legal limit of hours per week. The ordinary working time cannot exceed 8 hours per day and 48 hours per week, with the employee being entitled to a mandatory rest day, normally on Sunday. However, the law allows for the parties to agree that the daily working time can be distributed between 4 and 10 hours per day ensuring the maximum working week.

The daily working time must be distributed in at least two parts, with a rest period between both of them. This rest period is not considered part of the daily working time.

Overtime

An employee may not be required to work more than 2 hours per day as overtime, or more than 12 hours in a given week. Overtime during the day (considered as between 6am and 9pm) is paid at a rate of 25% on top of the ordinary hourly rate. Overtime for night work (9:00 pm to 6:00 am) is paid at a rate of 75% on top of the ordinary hourly rate.

If employees work on a Sunday or during a public holiday, they are entitled to extra pay of 75% above normal rates as compensation.

Employees who perform functions of direction, trust or management are excluded from the above rules regarding the maximum workday and overtime.

Health and Safety in the Workplace

The employer is obliged to provide employees with a safe workplace and the necessary and adequate elements and tools to prevent work accidents and professional diseases. Every employer or contracting party must implement the “Safety and Health at Work Management System” to ensure the enforcement of all health and safety at work legislation.

A health check is required before commencement of an employment contract, and annual health checks are mandatory.

Bonus

All employers are required to pay a “prima,” or bonus. The total of this payment is equivalent to a month’s salary and the bonus is paid in two instalments, in June and December.

Termination

In Colombia, employment contracts may be terminated by any of the parties at any moment with immediate effect. Grounds for termination in Colombian legislation can be divided into three categories:

  • Legal grounds – termination grounds which are unrelated to the behavior of the employee, but rather the operation of the law that mandates the termination of the contract. For example: the death of the employee; the expiration date of the term initially agreed in a fixed-term contract; the meeting of the condition in employment contracts by a definite task. In this case, as the employment contract ends because of the operation of the law, the employee is not entitled to a severance payment.
  • Termination with a fair cause – normally refers to situations related to gross misconduct by the employee. These fair cause grounds are defined explicitly by law and the parties cannot add supplementary grounds as a basis for the contract to be terminated. However, the parties do have the possibility, through the contract or the Company manual, to define situations that by their nature can be considered as serious misconduct. Employers should complete prior diligence with the worker before notifying a decision. In this case the employee is not entitled to any severance payment.
  • Termination without a fair cause – The termination without a cause includes all situations that are not considered as a legal cause or a fair cause. In these circumstances is the employee entitled to a severance payment in accordance with the law. The termination without a cause may find limitations for its use in situations that might be considered arbitrary. Such termination may be deemed unfair and can be considered void; typically, the consequence being the reinstatement of the employee rather than recognition of a severance payment.

Restricted or prohibited terminations

There are special cases where it is not possible to terminate an employment agreement without the authorization of the Ministry of Labour or a Labour Judge, even with just cause:

  • Employees who are pregnant or on maternity leave (protection extends to a father/partner who is an employee when the mother is unemployed and included as her beneficiary with the social security authorities)
  • Employees who are on sick leave or have restrictions that substantially inhibit their ability to comply with their duties.
  • Employees who are less than 3 years away from retirement

Collective Dismissals

For an Employer to proceed with a collective dismissal, it needs, beforehand, to receive authorization from the Ministry of Labour.

Notice Period

No specific notification procedure is required in case of dismissal with justified cause or without justified cause, but the reasons for dismissal must be communicated to the employee the by the termination date ((Articles 62, 64 & 66 of the Labour Code). However, a prior 15-day notice is required in certain specific situations of dismissal with justified cause related to employee’s misconduct or low performance.

Severance Pay

Unilateral termination without cause is lawful but will trigger severance obligations.

1. If the termination is unilateral and without cause, the employee will be entitled to receive an indemnification, in addition to the final wages.

2. For employees with an indefinite term agreement, such indemnification would be calculated as follows:

  • For employees earning less than 10 x minimum legal monthly wages, the compensation is 30 days of salary for the first year of service and 20 days of salary for each additional year of service (proportional to the fraction of a year)
  • For employees earning 10 x minimum legal wages or more, the compensation is 20 days of salary for the first year of service and 15 days of salary for each additional year of service (proportional to the fraction of a year)

3. For employees with a fixed-term agreement, the severance would be equal to the salary owed to the employee until the term of the agreement expires.

4. For employees who entered into agreements for the duration of a project, the severance would be the estimated salary owed to the employee until the project concludes, however in no case can severance be less than 15 days of salary.

Post-Termination Restraints / Restrictive Covenants

Post termination Non-competes, Customer non-solicits and Employee non-solicits are not enforceable. However, such provisions are typically included in employment agreements because they can have a deterrent effect or create a sense of moral obligation on the part of an employee.

Trade Unions / Collective Agreements

The option for employers and employees to associate through trade unions and employers’ associations is guaranteed as a constitutional right, Trade unions are prevalent in certain sectors, particularly industrial and public sectors. A minimum of 25 workers is required to maintain or establish a trade union in Colombia, so that where the company employs at least 25 employees, the employees can establish a company level union. Only the employees can form a union.

There are no work councils or other employee representatives.

Tax and Social Security

Personal Income Tax

Taxable income (TVU*)

Over Not over Marginal rate (%) Tax liability
0 1,090 0 0
1,090 1,700 19 (Taxable income or taxable occasional gain translated into TVU less TVU 1,090) x 19%
1,700 4,100 28 (Taxable income or taxable occasional gain translated into TVU less TVU 1,700) x 28% + TVU 116
4,100 8,670 33 (Taxable income or taxable occasional gain translated into TVU less TVU 4,100) x 33% + TVU 788
8,670 18,970 35 (Taxable income translated into TVU less TVU 8,670) x 35% + TVU 2,296
18,970 31,000 37 (Taxable income translated into TVU less TVU 18,970) x 37% + TVU 5,901
31,000 And up 39 (Taxable income translated into TVU less TVU 31,000) x 39% + TVU 10,352

Tax reform incorporated the tax unit (Unidad de Valor Tributario or TVU) to measure the different limits and thresholds originally set in absolute numbers, adjusted every year by decree. The value of each tax unit is equivalent to COP 35,607 for 2020 fiscal year and COP 36,308 for 2021 fiscal year.

Social Security

Employees in Colombia must be enrolled in the social security system (for pension, health and labour risks) and employers have the obligation to make the corresponding monthly contributions on time.

The basis to calculate contributions to the social security system (pensions, solidarity pension fund, health and professional risks) is the ordinary monthly salary earned by the employee. However, if the monthly salary exceeds 25 times the minimum wage, contributions to the social security system will be calculated on the maximum basis of 25 times the minimum wage.

Type of insurance Paid by employer Paid by employee Total
Pension Plan 12.0% 4.0% 16.0%
Medical Plan 8.5% 4.0% 12.5%
Family Compensation Fund (Parafiscales) 4.0% 0.0% 4.0%
Welfare Institute (ICBF) 3.0% 0.0% 3.0%
National Training Service (Sena) 2.0% 0.0% 2.0%
Labor Risk (ARL) 0.522%** 0.0% 0.522%
  30.022% 8.0% 38.022%

*The above table serves as a broad guideline. Actual rates charged will differ.

**The percentages are established according to risk classification of jobs, and is subject to change.

Employees

Salary Payment

Employers are required to pay their employees monthly by bank transfer. Salary should be paid on the last working day of the month and must be paid in local currency.

Payslip

Payslips should be delivered either via protected email or through an ESS (employee self-services). It is a mandatory requirement for the payslip to be in the local language.

Annual Leave

The minimum holiday entitlement per year is 15 days and accrues on a basis of 1.25 days per month for the commencement of employment. Employees are required to take at least 6 annual leave days a year.

Carry over rules

Upon agreement holiday days may be accumulated for a period of 2 years. Employer and the employee can agree a monetary compensation of the vacation period provided it does not exceed the 50% of the holiday

Sick Leave

In the event of the employee’s sickness and/or an accident that causes a work incapacity, it is necessary to have the incapacity certified by a licensed practitioner or the competent authority, normally chosen by the employee, that clearly establishes the days required for the employee to recover and return to work. The employer pays sick leave during the employee’s absence (for an indefinite period) but, as from the third day of sick leave, the employer can claim the payment back from the social security system.

In the case of illness or accident unrelated to work the employee is entitled to receive 66.67% of their regular salary.

In the case of any work-related accident or illnesses the remuneration is assumed by the social security system on a base of 100% of the employee’s salary during the entirety of his incapacity to work.

Other Paid Leave

Employees can take paid leave for the following circumstances:

  • Marriage Leave – Employees are entitled to five days paid leave.
  • Trade Union leave – Employees are entitled to paid leave to serve on a trade union committee. Employees also are entitled to leave for other trade union purposes if they give adequate notice to the employer and the absence does not adversely affect the business.
  • Voting leave – Employees are entitled to paid leave for purposes of voting in public elections (1/2 a day of paid leave).
  • Personal Leave – Employees are entitled to take up to five days’ paid leave to attend to “serious” personal matters.

Employees have the right to take unpaid leave for the following circumstances:

  • Military Service – The employment contract is deemed suspended if an employee is called to military service. The employee must allow the employee to resume the same position within 30 days of the completion of service.
  • Personal Reasons – The employment contract can be suspended for specific causes, as defined by law. One such cause offers a general possibility for the parties to suspend the employment contract on mutual consent. This specific situation is commonly used by employers to grant his employees non-paid leave for personal reasons.

Compassionate & Bereavement Leave

Mourning leave: An employee is entitled to five days’ paid leave for the death of a spouse or permanent partner, a parent, a child, a sibling, a grandparent, a grandchild, a mother or father-in-law, son or daughter-in-law, a stepchild or a stepparent.

Burial leave: employers are obliged to grant the necessary leave for his employees to assist with the burial of their co-workers.

Compassionate leave: while Colombian labour law mandates the obligation for employers to grant his employees with a paid compassionate leave, it does not define its scope or length. Employers are recommended to analyze on a case-by-case basis, the conditions to grant, and the length of, a compassionate leave.

Maternity & Parental Leave

  • Maternity Leave
    Paid maternity leave for every employed pregnant or adoptive mother in Colombia is granted for 18 weeks. At least one week of leave must be taken before delivery, which is extendable to two weeks when medically necessary. Adoptive mothers, (and fathers in charge of the newborn in case of sickness or death of the mother) are also entitled to this maternity leave. An additional two weeks are added for multiple births. The payment of this leave is entirely under the charge of the Healthcare system, as a benefit in money for the mother. When the mother 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.
  • Paternity leave
    A father is entitled to eight working days of paid paternity leave when his spouse or significant other gives birth or he adopts a child.
  • Adoption rights
    The same rights regarding paternity and maternity leave are applicable in cases of adoption. However, in the case where the father is the only adopting parent, he will have the same rights as a mother.

Public Holidays

Employees are entitled to be absent from work on the public holidays defined by the law and are entitled to their regular remuneration. While it is common for the municipalities to create other public holidays related to local festivities, private employers are not bound to such holidays. If, under any circumstance, the employer requires an employee to work on a public holiday, such work must be remunerated as if the employee worked on a Sunday or his weekly rest day.

Benefits to the Employee in Colombia

Statutory Benefits

Employers and employees make compulsory contributions to the Colombian Social Security System, which protects employees from certain social risks. The Colombian system is composed by the subsystems of healthcare, pension, labour risks and family allowance. As the social security system is managed by different companies, both private and public agencies, the employee has the right to choose the agency they want to affiliate with for healthcare and pension.

The main provisions include:

  • Medical care
  • Monetary sickness benefit
  • Unemployment benefits
  • Old-age benefits
  • Occupational risk and injury benefits
  • Family benefits
  • Maternity benefits
  • Disability benefits
  • Survivor benefits.

Other Benefits

Typical supplementary benefits offered by employers in Colombia include:

  • Private Healthcare (despite the fact of the coverage of the healthcare subsystem, it is very common for employers to provide their employees with private healthcare as a benefit)
  • Transportation subsidy
  • Meal vouchers
  • Life insurance
  • Birthday holiday
  • Educational Support

Visas and Foreign Workers

General Information

  • Minimum requirements for a company in Colombia for sponsoring expatriate personnel:
  • The company must be incorporated in Colombia with an address in Colombia.
  • The employer must present proof in the form of bank statements showing average monthly revenue of at least 100 times the legal monthly minimum wage in Columbia for six recent months prior to the visa application;
  • The sponsor must present Income Statements of the business from the previous year.
  • The company must demonstrate that the activity carried out by the applicant is fundamental and of National interest and they could not find a Columbian worker adequately skilled to carry out the work.
  • The employer is responsible for ensuring social security payments during the expatriate’s stay in the country.

Initially a foreigner can remain in Colombia as a tourist for a period not exceeding 180 days, as long as the corresponding procedures for the work visa are carried out. Foreigners are not allowed to engage in any paid activities with a Colombia Tourist Visa.

The visa is a legal requirement for the foreign individual to perform remunerated activities in the National Territory of Colombia.

The employer must act in accordance with Resolution 6045 issued in 2017 by the Ministry of Foreign Affairs of Colombia, for determining the correct type of visa or permit required for their foreign workers.

  • Visa Type – M (Migrant visa)

    The “M” visa authorises foreign workers to take up permanent employment. This visa is issued for a duration of up to 3 years at a time and can be renewed.

 

  • Visa Type – V (Visitor visa)

    Visa Type – V Technical Visitor Visa or Temporary Service Provider Valid usually for one to six months, For companies with specific projects which require the support of foreign personnel, to carry out technical tasks for a short period of time.

 

  • Visa Type – V Inter-corporate Transfer

    Valid usually for six months to one year, For Expats that move from their company (headquarters) to a branch in Colombia (salary paid abroad). The Colombia Visitor Visa is usually issued for a maximum of 90 days but can also be issued for up to two years in certain cases. The decision is up to the Consular or Immigration authorities handling your visa application.

 

  • Visa Type – R (Residency visa)

    After having had a Migrant Visa (type M) continuously for at least four years, the Colombia Resident (R) Visa is issued for five years at a time and can be renewed.

Documents required when applying for a Colombia work visa include:

  • Photocopy of a valid passport (copy of the first page showing biographical data as well as copy of the page showing latest stamp of entrance into Colombia as proof of legal entry and stay);
  • Photocopy of previously issued visa if applicable;
  • Passport photo (digital visa photo with white background, no older than three months);
  • Original work contract;
  • The company’s registration documents;
  • Certificates of Experience (at least 3 certificates of experience in the corresponding profession or occupation, all must be legalized, apostilled, and translated);
  • A Letter of Motivation from the employer stating why the employer was offered to a foreigner over a Columbian;
  • Degree Title (must validated by the Ministry of Education);
  • Permission or license granted by the competent authority when it is a regulated profession;
  • Certificate proving the suitability of the foreigner and relevance of the contract, issued by the employer;
  • Letter of Academic Support (showing that the visa applicant has the necessary academic training which agrees with the position to be performed);
  • Bank statements from the last six months (as proof of financial resources);
  • Proof of accommodation/address in Colombia.
  • All documents must be in Spanish, translated by a translator certified by the Colombian government. Visas in Colombia are issued at the Ministry of Foreign Affairs (Ministerio de Relaciones Exteriores) office in Bogotá, or they can be applied for at the Colombian consulate in the employee’s home country. The most important prerequisite for starting the application process is for the work contract to be in place signed by both the employee and employer.

Fees

The visa application process in Colombia involves the payment of two separate fees; the visa processing fee and then another fee if the visa application is successful.

If the employee enters Columbia with dependents and has been granted a Work Visa, they also have the right to apply for Work Visas in Beneficiary Quality to all members of their family nucleus (parents, spouse, children). It is worth noting that this type of visa does not allow family members to work, only the visa holder who has the employment contract can perform a professional job.

After arrival in Colombia

Within 15 days of receiving their visa, the employee must visit the local immigration authorities (Migración Colombia) to register their stay. For stays longer than three months, a Foreigners ID Card (Cedula de Extranjeria) will be issued upon registration.

Public Holidays in 2022

S.No Occasion Date
1. New Year’s Day January 1st
2. Epiphany Holiday January 10th
3. St Joseph’s Day March 21st
4. Maundy Thursday April 14th
5. Good Friday April 15th
6. Labour Day May 1st
7. Ascension Day Holiday May 30th
8. Corpus Christi Holiday June 20th
9. Sacred Heart Day June 27th
10. Feast of St Peter and St Paul July 4th
11. Independence Day July 20th
12. Battle of Boyacá Day August 7th
13. Assumption Day Holiday August 15th
14. Columbus Day Holiday October 17th
15. All Saints’ Day Holiday November 7th
16. Independence of Cartagena Holiday November 14th
17. Immaculate Conception December 8th
18. Christmas Day December 25th

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