Hire in Colombia
Country Overview
Employment Contracts
Working Hours
Employee Leave
Employee Benefits
Colombia PEO & Employer of Record Services
Global PEO Services (GPS) helps companies hire employees in Colombia without establishing a legal entity. All human resources, benefits, payroll, and tax needs for the employees are managed by the Global PEO, while the new hires and headquarter teams focus on your business goals.
When hiring employees in Colombia, establishing a subsidiary or branch office is not always the best route, as it’s often a lengthy and expensive process. Hiring via a Professional Employer Organization (PEO), or Employer of Record (EOR), is a faster and often more effective option – especially when starting up in a new country.
Global PEO Services hires the employees on your behalf, legally contracting them through our subsidiary in accordance with Colombia labor laws. As a result, the burden of compliance is on us and the employees can begin work for your company in a matter of days. PEOs/EORs provide you with a streamlined option for hiring employees, testing markets, and responding to growing business needs in Colombia. With Global PEO Services, you get control without taking on legal entity liabilities, contractor risks, or sacrificing on talent or speed to market.
Colombia - Country Overview
Located in South America, Colombia is the fourth largest economy on the continent. Petroleum export, manufacturing, information technology, and shipbuilding are some of the major industries of the country. Colombia has been on a steady growth path with an impressive growth rate of more than 10%. Foreign trade is important to the country as the combined value of exports and imports equal 34.9% of its GDP. Foreign and local companies are treated equally in most sectors. Colombia’s strong economic fundamentals and sound policy framework offer lucrative opportunities for foreign investors.
Capital City
Bogotá
Currency
Colombian Peso
Principal Language
Spanish
Government
Parliamentary Democratic Federal Republic
Major Cities
Cali, Barranquilla
Employment Contracts in Colombia
Individuals who are 18 years or older may sign an employment contract. Indefinite term contracts of employment may be verbal or written, but a fixed-term employment contract needs to be in writing. The duration of a fixed-term contract may not be longer than 3 years, but the contract can be renewed indefinitely.
In a verbal contract, the agreement between an employer and employee needs to be for the duties to perform and the work location, remuneration, and the duration of the contract. If there is a provision of a probationary period, it must be in writing. Similarly, a contract for apprenticeship needs to be in writing.
Working Hours in Colombia
Regular work schedule in Colombia is 8 hours per day and a maximum of 48 hours a week. Maximum limit of overtime a day is 2 hours and 12 hours per week. The 8-hour daily limit does not apply to employees in supervisory and managerial position.
Employers and employees may agree to a flexible work schedule, with 48 work hours spread over a maximum of 6 days with a mandatory rest day on Sunday.
Work hours may be stretched temporarily, without taking the government’s permission, when there is an emergency such as an accident. If the job duties are hazardous or unsafe, the government may approve of a work day shorter than 8 hours. Pay for night work, which is work performed between 10 p.m. and 6 a.m., is at a rate of 35% above regular pay.
Overtime
Overtime is paid at a 25% premium in addition to the regular monthly wage. When the overtime work is done during the day, 6 a.m. to 10 p.m., or at a 75% premium if the overtime work is performed at night, which means between 10 p.m. to 6 a.m.
If a workday is stretched by mutual agreement to 10 hours a day, workers are not allowed to work overtime on such days. Work done on Sundays or holidays is paid at a rate of 200% premium over the regular salary.
Employee Leave in Colombia
Holidays
Employers must give paid leave to employees on the following public holidays:
- Jan. 1: New Year’s Day
- Jan. 6: Epiphany*
- March 19: St. Joseph’s Day*
- Holy Thursday
- Good Friday
- May 1: Labor Day
- The Ascension of Christ*
- Corpus Christi*
- The Sacred Heart of Jesus*
- June 29: Saint Peter and Saint Paul*
- July 20: Independence Day
- Aug. 7: Battle of Boyaca
- Aug. 15: The Assumption of Mary*
- Oct. 12: Day of the Race/ Columbus Day*
- Nov. 1: All Saint’s Day*
- Nov. 11: Cartagena Independence Day*
- Dec. 8: The Immaculate Conception
- Dec. 25: Christmas Day
The holidays marked with an asterisk will be celebrated on the specified date only when it happens to be Monday, otherwise the holiday shifts to the following Monday.
Annual Leave
Employers must allow paid annual leave of 15 days after one year of service. It is mandatory for employees to take a minimum 6 days of annual leave in a year. Up to 4 years of annual leave can be accrued.
Maternity Leave
Social security of Colombia pays for 18 weeks (based on 48-hour work week) of leave or total at 100% of the remuneration if a female employee has made contributions to the social security system. The Substantive Labor Code mandates maternity leave for all women employees in the private sector. Other statutes cover public sector employees.
Two of the 14 weeks’ maternity leave may be taken before the due date, and it is mandatory to take 1 week’s leave before the due date. In case of complications, an employee is entitled to a leave for resting for 2 to 4 weeks. In case of death of a mother, before the maternity leave gets over, the child’s father is granted leave until the end of the departed mother’s postnatal leave.
Paternity Leave
Employers need to provide fathers of newborn children 8 days of leave that includes full pay after childbirth. The social security bears this cost. To qualify for paternity leave, employees need to have contributed to the social security system for a minimum of 100 weeks before taking the leave. A single person who wants to adopt a child gets the full 18 weeks of paid leave and other benefits.
Sick Leave
Employees who have made contributions of at least 4 weeks to the social security system are eligible to receive 180 days of sick leave at two-thirds pay. The employer needs to pay for the absence of first 2 days; the social security system pays for the remainder. If the cause of injury or illness is related to work, an employee receives 100% of salary from the social security system.
Bereavement Leave
Employers need to give employees 5 days of leave after the death of a spouse or permanent partner, a child, a parent, and other near and dear ones.
Personal Leave
Employers need to give employees 5 days of leave to take care of important personal matters.
Employee Benefits in Colombia
The social security system provides benefits for sickness, disability not related to work, maternity, old age pensions and workers’ compensation. Both employers and employees need to make contributions to the unified social security system in Colombia.
For medical benefits, an employee may choose either the public or the private health care system. Health registration is mandatory for all dependent workers and those hired under an employment contract. The employer’s contribution needs to be 8.5% of employees’ remuneration, and employee contribution is 4%.
For old age and survivors’ benefits as well as benefits for disability not related to work, employees are allowed to choose between the public social insurance system and a private system based on individual accounts and may switch between the systems every 5 years until the last 10 years before retirement. The employer contribution to the pension system is 12.5% of payroll. The minimum earnings for contribution purposes are equal to the minimum monthly wage.
Old-age Pension
Old-age and survivors’ insurance, unemployment insurance, and disability insurance are funded partially through employer and employee contributions (each makes a contribution of 5.15% of remuneration). Men who have reached the age of 65 and women who have reached the age of 64 may retire and be eligible for an old-age pension if they have made at least one year of contributions into the system. The amount of the pension is dependent on a person’s period of contributions and their income.
Occupational Pension Plan
This type of plan is financed by employers and regulated as an entity different from the old-age pension. Employers need to register its employees under an occupational retirement plan, and both the employer and the employee contribute, the amount of which is based on the plan as well as the salaries to be insured.
Work Injury Insurance
Employers need to take work injury insurance (as part of workers’ compensation) that covers all employees working in Colombia including apprentices and volunteers. Employees do not contribute to the workers’ compensation fund. Employers’ share of contribution is between 0.348% and 8.7% of covered payroll, according to the assessed degree of risk. The minimum monthly wage required for contribution is 535,600 pesos. The maximum covered earnings are 25 times the monthly minimum wage.