Colombia

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KEY DEVELOPMENTS FOR 2023

Mandatory increase of salaries in accordance with the consumer price inflation ("CPI")

Bill 025 of 2022 contemplates that a floor for salary increases is established. In this regard, it is specified that salaries paid in the national territory, in the private sector, are higher than the minimum legal monthly salary in force and must be adjusted annually in a proportion that may not be lower than the CPI of the immediately preceding year.

This increase has been long debated in Colombia. The Constitutional Court has ordered the increase through individual claims; however, the Supreme Court has stated that employers are not obliged to increase the salaries in accordance with the CPI. This Bill implies that employers must increase salaries every year and will definitely mean the increase of costs of operations.

Increase of vacation period

Currently, in Colombia, every employee who has rendered one year of service is entitled to fifteen (15) working days of vacation. However, Bill No. 046 of 2022 was filed in the House of Representatives on 25 July 2022, with the purpose to increase the vacation period to twenty (20) working days.

The law also contemplates a considerable increase of vacations for those employees who carry out high risk activities (mining, exposure to high temperatures, exposure to radiation and carcinogenic substances, among others). In this case, employees would be entitled to eighteen (18) working days of vacation for every six months of services rendered.

On the other hand, the number of mandatory days that an employee must rest per year is also modified, since it proposes an increase from six (6) to eight (8) days and additionally the regular employees will be allowed to accumulate vacations for a period of four (4) years when it used to be two (2) years.

The bill was created with the purpose of compensating employees for the continuous and uninterrupted rendering of services for a long period of time. However, the president of Fenalco (National Federation of Traders) said that the increase of vacations represents higher costs, and affects productivity and competitiveness because we cannot be compared with OECD countries.

On the other hand, companies and employers consider that this bill is unnecessary since Colombia is one of the countries that has more holidays, so if we consider the 18 holidays of the year plus the 15 days of vacations a worker in Colombia would have 33 days of rest which would mean that Colombia does have enough days of rest. This will be especially important in the year 2023 as we could be facing a labor reform, which could bring about these changes.

Surcharges and overtime

One of the most important changes in the labor field is related to the Bill 113 of 2022 regarding the period of day and night shift, which would have a direct effect on overtime work, surcharges and Sunday or holiday work. In Colombia a day shift is from 6:00 a.m. to 9:00 p.m., but with the shifts modifications it will start at the same hour but finish at 6:00 p.m.; after that it will be considered a night shift.

Given this, if an employee works after 6:00 p.m. and exceeds the maximum legal working hours the employee will have to be paid night overtime and if he has a night shift the employee will have to be paid the corresponding night surcharge which would not be beneficial to the employer and would be extremely costly. Likewise, another important change is that Sunday or holiday surcharge will be remunerated at 100% of the ordinary salary in proportion to the hours worked, and not as it is currently calculated at 75%.

Due to the importance of the change, the president of the National Association of Businessmen (“ANDI”) in Colombia commented on the change of the working day and reminded that in Colombia 50% of the workers are informal, which would cause this change to become an incentive for this indicator to increase.

Likewise, this means that companies would prefer not to hire more employees due to the implications it would have in terms of social security (overtime and surcharges). On the other hand, the most important guilds in the country, such as commerce, hotels, restaurants, tourism, surveillance, and entertainment companies, among others, would be highly affected considering that their workers provide services in the most expensive schedules which could possibly cause massive layoffs. It will be necessary to wait for the changes of the new government for the year 2023, which could lead to a pension and labor reform.

KEY DEVELOPMENTS FOR 2022

Potential new leave entitlement for employees with a child suffering from a terminal illness

Law 2174 of 2021 contemplates a new obligation for public and private employers to recognize paid leave for the care of minors suffering from a terminal illness.  Such leave would last for a period of up to ten (10) working days each year. This leave entitlement would be granted to one of the child’s working parents contributing to the general social security health system or to whoever has custody and personal care of the child. Employers may have the cost associated with such leave reimbursed to them via the mandatory health insurance entity (known as "EPS").

This leave entitlement may have an impact on the availability of employees, although such impact may not be material given that leave would only be granted for up to ten (10) working days per year.

Currently no regulations have been issued by the Ministry of Labor and the Ministry of Health and Social Protection regarding the implementation of this leave entitlement. However, at this stage, employers may want to identify any employees who may be impacted by this and establish a strategy for redistributing work to avoid any potential negative impact on business operations.

Reduction to maximum weekly working hours

Law 2101 of 2021 amends Article 161 of the Colombian Labor Code by gradually reducing the working week from 48 to 42 hours. Under Colombian Labor Law, the general rule is that ordinary working hours are those agreed by the parties, or in the absence thereof, the legal maximum (being eight hours per day and 48 hours per week). However, as per Law 2101 of 2021, the working week in Colombia will be reduced as follows:

The reduction in working hours may have an impact on the number of employees needed to meet the service demands of the employer, which may result in an increase in payroll costs. Additionally, it is worth noting that the reduction of working hours does not imply a corresponding salary reduction. Instead, employees will earn the same salary whilst working a reduced number of hours.

Employers may start implementing the reduction of the working day according to Law 2012 of 2021 at any time on a voluntary basis, however, it will be mandatory as of 2023.

Increase to paid paternity leave

Law 2114 of 2021 extends paid paternity leave by two (2) weeks. The law foresees a gradual extension of up to five (5) weeks, with such leave increasing by one (1) week for each percentage point decrease in the unemployment rate in Colombia.

Paternity leave in Colombia prior to the issuance of Law 2114 of 2021 was eight (8) working days. Although the value of such leave is assumed by the mandatory health insurance provider (“EPS”), employers may want to plan for potential changes in the distribution of available personnel to ensure continuity of service.

Human Resources departments should be trained and implement measures to strengthen personnel management strategies during paternity leave. One option that employers may want to consider is whether to enter into an agreement with a temporary services company for the provision of personnel.  Alternatively, employers may wish to employ additional employees directly to ensure that there is sufficient cover.

KEY DEVELOPMENTS FOR 2020

Special permits for Venezuelan workers

The Ministry of Labor recently issued Decree 117 of 2020, creating the Special Permit for Permanence for the Promotion of Formalization ("PEPFF"). The PEPFF is aimed at Venezuelan citizens who meet the following criteria:

• are over 18 years old,
• have a Venezuelan identity card and/or Venezuelan passport, regardless of whether they have expired,
• do not have judicial records in Colombia or abroad,
• are not the subject of an administrative expulsion or deportation measure in force, and
• have an offer of employment in Colombia or an offer to provide services in the national territory. Such an offer must be of a fixed-term nature for a period of at least two months, but not exceeding two years.

In order to obtain the PEPFF, a request must be made by the relevant employer or contractor to the Ministry of Labor who will validate the request and determine whether to accept or reject it. Once the application has been approved, the Venezuelan citizen must visit the immigration office to finalise the process.

The permit does not replace the individual's passport, does not entitle them to enter and leave the country, does not presuppose domicile, has no effect on the computation of time for the Residence Visa and does not grant them any powers to perform registration procedures. The holder of the PEPFF is only authorised to exercise the activity or trade set out in the offer of employment or offer to provide services. The PEPFF can be renewed for a maximum cumulative term of four years.

Presumption of fault in occupational disease cases

The Supreme Court of Justice has recently reiterated the principle that if companies exhaustively comply with occupational health regulations, the presumption of fault in occupational disease cases is rebutted. In judgment SL143-2020, the Court addressed the case of a citizen who sought a declaration that she suffered from a work-related illness as a result of her employer's actions. The Court concluded that the employer had fulfilled its legal obligations in respect of the protection and security of its employees by adopting necessary measures regarding occupational health. It is worth noting that judgments of the Supreme Court of Justice serve as a guiding criterion for judges in the judicial proceedings more generally.

Reduction to the limit on working hours and changes to social security contributions for part-time workers

A bill has been introduced which provides for the reduction to the limit on working hours, from 48 hours per week to 45. This would be achieved by reducing the weekly limit on working hours by one hour per year over the next three years.

In addition, in respect of part-time work, the current labour regulations provide that social security contributions should be calculated on the basis of a full-time salary, even if employees work on a part-time basis. The bill instead proposes that social security contributions should be proportional to salary earned for hours effectively worked. This change is aimed at making it easier for employers to employ younger and older workers who may want to work on a part-time basis to fit around their education or other commitments.

The Constitutional Court declares unenforceable Article 244 of the National Development Plan 2018–2022 that established the base contribution income for independent workers and service providers

The Constitutional Court has declared Article 244 of the National Development Plan 2018–2022 to be unenforceable. Article 244 had established that independent workers should pay the equivalent of 40% of their income by way of social security contributions, and that this payment should be made at the end of each month. In spite of the declaration, this legal norm will continue to apply for the next two years until the Congress of the Republic draws up new plans in respect of the payment of social security contributions by independent workers and it is subsequently reviewed (and approved) by the Constitutional Court.

KEY DEVELOPMENTS FOR 2019

New rules of reinforced stability for pregnant women

In 2018, the Constitutional Court found that if an employer has no knowledge of an employee’s pregnancy when the employment agreement is terminated, the employer will not be liable for the employee’s rights to reinforced labour stability as lack of knowledge implies that there is an absence of discrimination.

New social security system contribution rules for independent contractors (“Individuals”)

Pursuant to Decree 1273 of 2008, from 1 October 2018, individuals who render services as independent contractors, must pay contributions to the Social Security System in arrears. This will allow independent contractors to pay contributions to the Social Security System once they receive their monthly fees, rather than making payments in advance. From June 2019, hiring parties will be obliged to retain and pay Social Security Contributions of their hired individuals who render services as independent contractors.

New rules regarding reinforced stability for employees with health issues

The Labour Chamber of the Supreme Court of Justice set forth new guidelines regarding protection for employees with health issues, as follows:

• Notwithstanding the above, if an employee establishes his/her disability in a lawsuit, the dismissal is presumed to have been discriminatory and the employer must be able to demonstrate the alleged justification, otherwise the labour judge will declare the dismissal as unenforceable and will reinstate the employee with payment of salaries and labour allowances. The employer will also face a financial penalty of 180 days of salary; and
• The prior authorization from the Ministry of Labour is required to dismiss an employee with occupational health issues. The disability must be an insurmountable obstacle for labour, which means circumstances where the labour agreement loses its purpose given the impossibility of the service to be rendered. In such circumstances, the Ministry of Labour must verify that the employer went through all opportunities to reinstate, readapt, reinsert and relocate the disabled employee. If an employer does not consider all options to retain the employee, the dismissal will not be enforced and the employer will be liable for payment of salaries, allowances and sanctions set out above.

KEY DEVELOPMENTS FOR 2018

Prohibition on Employers Requesting Pregnancy Tests as a Labour-Hiring Requisite

Bill 094/16 stipulates that companies may not request pregnancy tests as a pre-requisite to hiring female candidates, except for jobs involving “high-risk activities”. A breach could result in a fine worth 50 times the minimum legal salary. The Bill that brings this into force was first introduced in 2017 but was archived and then re-issued this year.

Prohibition of Dismissal of Women Contractors under Pregnancy or Maternity Leave

Bill 095/16 states that any individual or corporation that hires a woman under an independent services agreement, must guarantee her the right to maternity leave, lactation period, and additional protection until the end of the maternity leave period.

KEY DEVELOPMENTS FOR 2017

Prohibition on employers requesting pregnancy tests as a labour-hiring requisite

Bill 030/15 C seeks to reform Law 1257 of 2008, so that companies may not request pregnancy tests as a pre-requisite to hiring female candidates, which has the effect of excluding women wanting to work in high-risk positions.

Requesting pregnancy tests as a hiring pre-requisite would result in fines worth 50 times the minimum legal salary (COP 34.472.750 as of 2016).

For privately-owned companies, carrying out this practice on three or more occasions shall result in suspension of activities.

By 31 January 2017, all employers must implement the new labour security and health system

By 31 January 2017, all employers must implement a labour health and safety management system pursuant to Decree 1443 of 2014.

Under Decree 1443 dated 14 July 2014, the Ministry of Labour introduced the Occupational Health and Safety Management System (“Sístema de Gestión de la Seguridad y Salud en el Trabajo” (“SG-SST”) ), which sets out the obligations that all employers must comply with and implement in their companies.

Some of the obligations that employers must review, update, implement or comply with, are the following:

• Define, sign and, promote an Occupational Health and Safety policy in favour of all employees;
• Assign, file, and communicate specific responsibilities in the SG-SST at all levels of the organisation, including top management level; and
• Define and assign financial, technical, and human resources to design, implement, review, evaluate, and upgrade prevention and control measures.

Labour Risk Administrators, as social security entities under the labour risks regime, must assist employers in implementing this system.

Proposal to increase overtime/night shift surcharges’

Under Bill 172/15 C, dated 1 August 2016, overtime will be compensated at a rate of 100% of salary calculated by reference to hours worked and night shifts (between 6:00 p.m. and 6:00 a.m.) will be compensated at a rate of 35% of salary by reference to hours worked.

KEY DEVELOPMENTS FOR 2016

Premium service bonus applies to domestic labour employees

On 7 July 2016, Law 1788 of 2016 came into effect, extending premium service bonuses (“Prima legal de servicios”) to domestic labour performing employees such as housemaids, butlers, chauffeurs, etc. Therefore, domestic-labour employees are eligible to one (1) month’s additional salary per year, payable half in June and half in December of each year of service, or proportionally a fraction thereof.

Labour Outsourcing Regulation

Under Decree 583 of 2016, the Ministry of Labour defined labour outsourcing as a process that a beneficiary develops to obtain goods or services from a provider, as long as labour laws are complied with

However, the Ministry shall view the outsourcing as illegal, whenever the following occurs:

• Whenever personnel are hired for the development of permanent activities; and
• Personnel are hired in such way that it affects constitutional and labour rights.

Given the above, outsourcing is permitted even in such cases where permanent activities are performed in favour of the customer as long as the provider complies with all labour laws in favour of its employees.

Labour Judges are competent to adjudicate labour lawsuits against foreign States

The Labour Chamber of the Supreme Court of Justice, under providence dated 20 April 2016, stated that the jurisdiction of Colombia is competent to adjudicate conflicts between individuals who provide services and foreign States officially represented by diplomatic missions, such as consul offices, delegations, etc. According to the Court, foreign States do not have jurisdictional immunity with regards to labour agreements executed under Colombian territory.