Q&A: Labour & Employment Law in Colombia

Legislation and Agencies

What are the main statutes and regulations relating to employment?

The main statutes and regulations relating to employment in Colombia are article 53 of the Constitution, and the Labour Code amended by Law No. 50 of 1990 and Law No. 789 of 2002, among others. Decree 1072 of 2015 must also be considered, taking into account that it compiles and unifies the rules of administrative order for the labour sector, such as health and safety in the workplace, labour intermediation, outsourcing and independent employees, among others.

Is there any law prohibiting discrimination or harassment in employment? If so, what categories are regulated under the law?

Colombian law prohibits discrimination based on sex, race, national or family background, language, religion, political or philosophical opinion, pregnancy or maternity, sexual orientation, age, disability or health condition, categories that are applicable to labour relations. Harassment in the workplace is specifically regulated by Law No. 1010 of 2006, and is defined as persistent and demonstrable conduct against an employee by a co-worker or superior, with the purpose of generating fear, intimidation, terror and anguish to induce employee resignation.

What are the primary government agencies or other entities responsible for the enforcement of employment statutes and regulations?

The primary government entities responsible for the enforcement of employment statutes and regulations are the Ministry of Labour, the Ministry of Health and the pension and payroll tax authority.

Worker representation

Is there any legislation mandating or allowing the establishment of employees’ representatives in the workplace?

There are two mandatory committees that require an equal number of representatives from employees and the employer: the Work Cohabitation Committee, which is in charge of preventing harassment in the workplace, and the Health and Safety at Work Committee. In addition, Colombian legislation allows creation of unions, which is considered a constitutional right.

What are their powers?

The Work Cohabitation Committee and the Health and Safety at Work Committee have been created to recommend preventative or corrective measures to management in matters of its competence. Unions can negotiate collective bargaining agreements and represent affiliated employees during disciplinary procedures, among others.

Background information on applicants

Are there any restrictions or prohibitions against background checks on applicants? Does it make a difference if an employer conducts its own checks or hires a third party?

There are no restrictions on or prohibitions against background checks on applicants. However, a previous authorisation by the applicant must be granted. Also, it cannot be used as a mechanism to discriminate. There is no difference whether the employer conducts the background check itself or with a third party. There are specialised agencies in background checking.

Are there any restrictions or prohibitions against requiring a medical examination as a condition of employment?

No. In fact, it is mandatory to require a medical examination before starting a labour contract. An employer can refuse to hire an applicant that does not take the examination. Notwithstanding the foregoing, it is prohibited to practise HIV tests and pregnancy tests, unless the condition may constitute a risk to the health of the applicant given the functions to perform.

Are there any restrictions or prohibitions against drug and alcohol testing of applicants?

There are no restrictions on or prohibitions against drug and alcohol testing of applicants. Nevertheless, the consumption of drugs or alcohol cannot be the sole reason for refusing to hire an applicant. The rejection of an applicant based on his or her consumption of such substances must affect his or her employment performance or represent a risk of accidents.

Hiring of employees

Are there any legal requirements to give preference in hiring to, or not to discriminate against, particular people or groups of people?

There are no legal requirements to give preference in hiring to or not to discriminate against particular people or groups of people. However, there are tax benefits or incentives for hiring people from vulnerable groups; that is, people in a situation of displacement, in the process of reintegration, in a condition of disability, employees under 28 years of age and women over 40 years with more than one year of unemployment (article 31 of Law No. 361 of 1997, and Law No. 1429 of 2010).

Must there be a written employment contract? If yes, what essential terms are required to be evidenced in writing?

No. Written employment contracts are not mandatory, according to the de facto rule that when the elements of an employment relationship are gathered, the existence of an employment contract is understood. However, the following terms require written evidence: probationary period, fixed-term contract and ‘integral salary’, as well as non-salary payments.

To what extent are fixed-term employment contracts permissible?

Fixed-term employment contracts are permissible and can be extended indefinitely. Notwithstanding the foregoing, after the third extension of fixed-term contracts of less than one year, it is understood that the contract has been renewed for one year.

What is the maximum probationary period permitted by law?

The maximum probationary period permitted by law is two months for indefinite term contracts and one-fifth of the duration of the contract for fixed-term contracts. Parties can agree a shorter probationary period, in which case it can be extended by mutual agreement up to the legal limits. The probationary period cannot be extended at the discretion of the employer.

What are the primary factors that distinguish an independent contractor from an employee?

From an execution point of view, the primary factors that distinguish an independent contractor from an employee are the purpose of the contract and subordination. When a company hires an employee, it hires a person and can give him or her orders and instructions; the employer also has disciplinary powers over the employee. On the other hand, when a company hires an independent contractor, it hires a service; therefore, the hiring party cannot give orders to or sanction an independent contractor.

The employer is obliged to pay the social security contributions and other payroll-related taxes of its employees. On the contrary, an independent contractor must pay for social security contributions in health, pension and labour risks, unless classified under risks IV and V, in which case the contracting party will assume 100 per cent of the contribution to the labour risk system.

Although independent contractors have the obligation to assume responsibility for contributions to the social security system, excepting in the above-mentioned cases, as of June 2019, the hiring party must withhold and pay such amounts to the social security entities.

Likewise, an independent contractor is not entitled to receive social benefits or indemnification at the termination of the contract, while an employee has the right to receive social benefits as well as indemnification unless the contract is terminated with cause.

Is there any legislation governing temporary staffing through recruitment agencies?

Temporary staffing is regulated by Law No. 50 of 1990 and Decree 4369 of 2006. Only temporary staffing agencies authorised by the Ministry of Labour are allowed to provide such services. Employees hired by a temporary staffing agency are called ‘employees in mission’, and can be hired for specific circumstances provided by law as follows:

• in the case of occasional, accidental or transitory tasks;
• when necessary to replace personnel on vacation, on leave, sick leave or maternity; and
• to attend to increases in production, transportation, sales of products or merchandise, seasonal periods of harvests and in the provision of services, for a term of six months, extendable for up to six months.

Foreign workers

Are there any numerical limitations on short-term visas? Are visas available for employees transferring from one corporate entity in one jurisdiction to a related entity in another jurisdiction?

There are no numerical limitations on short-term visas. Employees transferring from a corporate entity in one jurisdiction to a related entity in another jurisdiction can apply for a visitor visa for intercorporate personnel transfer or for a work visa, depending on the activity they would perform in Colombia. If the employee has a permanent relation with a company domiciled in Colombia and will remain in Colombia for more than 180 days in a calendar year, a work visa will be required.

Are spouses of authorised workers entitled to work?

Once foreign workers’ visas have been approved by the Ministry of Foreign Affairs, the visa application process begins for their spouses and children, who can obtain a beneficiary visa. This beneficiary visa is issued for the same period as the worker’s visa and allows its holders to study. However, this visa does not include a work permit. In order for workers’ spouses to be able to work in Colombia, they must apply for their own work visa.

What are the rules for employing foreign workers and what are the sanctions for employing a foreign worker that does not have a right to work in the jurisdiction?

In order to hire foreign workers in Colombia, the law provides the following obligations:

• the foreign worker must have a work visa and foreign identification card;
• if the foreigner is linked to positions that involve the exercise of regulated professions in Colombia, such as engineering, accounting or medicine, they must request permission from the entity in charge to authorise them to practise;
• within 15 calendar days, the employer must electronically inform the immigration authorities of the hiring of the foreigner. At the same time, within 15 calendar days of the termination date of the employment relation or services, the sponsoring company must inform the immigration authorities about the termination;
• within 120 calendar days of the hiring date, the employer must inform the Ministry of Labour of the initiation of the contract; as well as the termination within 30 days of the termination date; and
• upon termination of the employment or service contract with a foreigner, the company is responsible for the repatriation expenses of the foreigner and his or her family within 30 days of the termination of the contract. If the foreign employee does not use the amount available as return expenses, the company must notify the immigration authorities within five working days of the foreigner having completed one month of work. Thus, the employer will have proved that this obligation has been fulfilled.

In the event that a company hires a foreigner without a visa that authorises the foreigner to work, or fails to comply with any of the aforementioned obligations, it may be subject to fines of up to 15 minimum legal monthly salaries in force (approximately US$5,000 in 2018).

Is a labour market test required as a precursor to a short or long-term visa?

No test of the labour market is required prior to hiring foreigners. The only documents requested by the Ministry of Foreign Affairs are those that demonstrate a link between the company and the employee; for example, the existence of an employment or service contract executed between the company and the foreigner, and a letter in which the company explains the suitability of the foreigner for the position.

Terms of employment

Are there any restrictions or limitations on working hours and may an employee opt out of such restrictions or limitations?

Yes. The Labour Code establishes a maximum working schedule of eight hours a day, or 48 hours a week distributed over six working days. The parties to the labour contract may agree to distribute the 48 hours over five days a week with the purpose of taking Saturday as a day of rest, without this extension being considered overtime.

Similarly, the parties may agree to work under special working schedules provided by law as follows:

• shift work schedule, which allows an employee to work more than eight hours a day or 48 hours a week, as long as this does not exceed an average of 48 hours per week in a three-week period;
• special work schedule of 36 hours a week, which allows an employee to work at night without paying a surcharge for night work, as long as there is no overtime work; and
• the employer and the employee may also agree that the weekly 48 hours shall be carried out through flexible daily work days, distributed over a maximum of six days a week with a mandatory rest day, which may coincide with Sunday (minimum of four continuous hours and up to 10 hours a day) without any additional work surcharge, when the number of hours of work does not exceed the average of 48 hours per week within the ordinary schedule of 6am to 9pm.

In addition, Colombia’s Labour Code allows overtime work of up to two hours per day or 12 hours per week. To have the possibility of working overtime, employers require a permit from the Ministry of Labour, making an exception for force majeure situations. An employee cannot opt out of these restrictions or limitations.

What categories of workers are entitled to overtime pay and how is it calculated?

All workers are entitled to overtime pay, with an exception for employees in positions of trust and management, which are excluded from the working schedule limitations. However, these categories of employees are entitled to receive surcharges for night work and for working on Sundays or holidays. The possible surcharges are as follows.

The surcharge for Sundays and holidays can apply in addition to the other surcharges.

Can employees contractually waive the right to overtime pay?

No.

Is there any legislation establishing the right to annual vacation and holidays?

Yes, employees have the right to 15 working days of paid vacation for each year of service, or proportionally to the time worked in the case of termination. Colombia also has 18 observed holidays per year.

Is there any legislation establishing the right to sick leave or sick pay?

Yes, employees have the right to paid sick leave for the number of days prescribed by the treating doctor, with no limit. However, employers are entitled to request from the social security system the reimbursement of paid sick leave of over two days, as long as their social security contributions are current.

In what circumstances may an employee take a leave of absence? What is the maximum duration of such leave and does an employee receive pay during the leave?

Colombian labour legislation establishes the following mandatory paid leaves of absence.

Mourning leave and leave for an emergency personal event are not refundable by the social security system, but maternity and paternity leave are. In addition to the aforementioned, the employer must also allow employees to attend medical appointments and funerals of colleagues, and must grant permission to vote or participate in union commissions.

The parties may also agree non-paid leaves of absence.

What employee benefits are prescribed by law?

Employees with an ordinary salary are entitled to receive the following benefits, which represent 2.12 extra salaries per year.

In addition to the aforementioned, employees earning up to two minimum monthly salaries are entitled to receive dress and footwear allowance three times a year and a monthly transportation allowance.

Additional benefits may be agreed through individual or collective agreements or otherwise granted by the employers voluntarily.

Are there any special rules relating to part-time or fixed-term employees?

No, part-time employees have the same rights and benefits as full-time employees, in proportion to the working schedule agreed.

Must employers publish information on pay or other details about employees or the general workforce?

No, except for public employers.

Post-employment restrictive covenants

To what extent are post-termination covenants not to compete, solicit or deal valid and enforceable?

In Colombia, post-termination covenants not to compete, solicit or deal are not enforceable from a labour standpoint. However, such agreements are usually subject to monetary compensation for the employee outside the labour relation, as a matter of the jurisdiction in charge of competition issues.

Must an employer continue to pay the former employee while they are subject to post-employment restrictive covenants?

An employer may continue to pay a former employee while they are subject to post-employment restrictive covenants as a non-labour agreement.

Liability for acts of employees

In which circumstances may an employer be held liable for the acts or conduct of its employees?

An employer is liable for the acts or conduct of its employees during the execution of their services, or in activities where employees represent the employer, unless the employer is able to demonstrate that it is in compliance with its obligations of due diligence or had no means to prevent such conduct.

Taxation of employees

What employment-related taxes are prescribed by law?

Employers are obliged to pay social security contributions for employees, which are calculated based on the monthly salary of each employee and correspond to pensions (12 per cent), health (8.5 per cent*) and occupational risks (from 0.53 per cent to 6.96 per cent, depending on the level of risk).

Also, employers are obliged to fulfil three employment-related taxes prescribed by law in addition to the social security contributions calculated in reference to the monthly payroll payment, as follows.

*Exemptions apply for the payrolls of employees earning under 10 minimum monthly salaries.

Employee-created IP

Is there any legislation addressing the parties’ rights with respect to employee inventions?

Yes, according to article 539 of the Code of Commerce, unless stipulated otherwise, the invention made by an employee hired for research purposes belongs to the employer. The same rule applies if the employee has not been hired for research purposes if the invention is made by data or means known or used because of the work performed. In this case, the employee will be entitled to compensation that will be set according to the amount of the salary, the importance of the invention, the benefit reported to the employer or other similar factors.

In the absence of an agreement between the parties, a judge will set the amount of compensation.

Is there any legislation protecting trade secrets and other confidential business information?

Within the employment relationship, the Labour Code establishes obligations regarding the protection of trade secrets and other confidential business information, and the violation of these obligations is considered a just cause of termination. It is usual to include special confidentiality clauses in the employment contract or to sign confidentiality agreements including damages compensation in the case of violation.

Data protection

Is there any legislation protecting employee privacy or personnel data? If so, what are an employer’s obligations under the legislation?

Law No. 1581 of 2012 and Decree 1377 of 2013 regulate data privacy. Employers are responsible for the processing of their employees’ data and must comply with the obligations provided by law, as follows:

• register personal databases in the National Registry of Databases;
• guarantee people the exercise of habeas data;
• request and keep a copy of the respective authorisation granted by the owner (the employee);
• inform the employee about the purpose of the collection and the rights that assist him or her by virtue of the authorisation granted;
• keep the information under the necessary security conditions to prevent its adulteration, loss, consultation, use or unauthorised or fraudulent access;
• ensure that the information provided to third parties is true, complete, accurate, updated, verifiable and understandable;
• update the information and adopt other necessary measures so that the information is kept updated;
• rectify the information when it is incorrect;
• process inquiries and claims formulated in the terms indicated in this law;
• adopt an internal manual of policies and procedures to ensure adequate compliance with this law;
• attend to inquiries and complaints;
• inform the data processor when certain information is under discussion by the employee, once the claim has been filed and the respective procedure has not been completed;
• inform at the request of the employee about the use of his or her data;
• inform the data protection authority when there are violations of the security codes and there are risks in the administration of the information of the owners; and
• comply with the instructions and requirements issued by the Superintendence of Industry and Commerce.

Business transfers

Is there any legislation to protect employees in the event of a business transfer?

Yes, the Labour Code contemplates the matter of employer substitution by virtue of which the new employer acquires all labour obligations undertaken by the former employer. Article 68 of the Labour Code states that the sole substitution of employers does not extinguish, suspend or modify existing employment contracts.

Nevertheless, the new employer and the employee may modify the existing conditions by mutual agreement.

Termination of employment

May an employer dismiss an employee for any reason or must there be ‘cause’? How is cause defined under the applicable statute or regulation?

An employer may dismiss an employee without cause by paying an indemnification. However, if the contract is terminated with cause, the employer is not obliged to pay indemnification. Article 62 of the Labour Code establishes an exhaustive list of serious misconduct or situations that may be considered causes for termination. These causes are related to:

• serious indiscipline or negligence;
• acts of violence or bad treatment;
• the employee discloses technical or commercial secrets or discloses matters of a reserved nature;
• systematic poor performance;
• any serious violation of special obligations or prohibitions in accordance with the law or any fault agreed as such by the parties; and
• the employee acquiring the right to a pension.

Must notice of termination be given prior to dismissal? May an employer provide pay in lieu of notice?

Notice of termination prior to a dismissal is not required except in two cases, as follows:

• notice of termination must be given 30 days prior to dismissal when a fixed-term contract is not to be extended; and
• a 15-day notice of termination is required when the contract is to be terminated because the employee acquires the right to a pension.

In both cases it is possible to pay the equivalent days of salary in lieu.

In which circumstances may an employer dismiss an employee without notice or payment in lieu of notice?

In general terms, employers may dismiss an employee without notice or payment in lieu of notice except for the situations explained in question 37.

Is there any legislation establishing the right to severance pay upon termination of employment? How is severance pay calculated?

Yes; unless there is a cause, employees have the right to indemnification pay upon termination, which is calculated according to the years of service, term of the contract and the employee’s salary.

Indefinite-term contracts

For employees with a salary below 10 minimum monthly wages, the indemnification amount is 30 days of salary for the first year of service plus 20 additional days for each of the following years of service or proportionally by fraction.

For employees with a salary above 10 minimum monthly wages, the indemnification amount is 20 days of salary for the first year of service plus 15 additional days for each of the following years of service or proportionally by fraction.

Fixed-term contracts

The indemnification amount corresponds to salaries for the time remaining until the completion of the term, or of the term determined by the duration of the duty or the contracted work, in which case the indemnification will not be less than 15 days.

Are there any procedural requirements for dismissing an employee?

It depends on the termination cause. To dismiss an employee with cause, employers must conduct a previous disciplinary process in which the employee can defend him or herself in compliance with due process. There are no procedural requirements for dismissing an employee without cause.

However, previous approval from the Ministry of Labour is required for dismissing an employee with special protection from dismissal, and to terminate the employment contract of an employee with union forum protection, prior authorisation is required from a labour judge.

In what circumstances are employees protected from dismissal?

Employees are protected from dismissal when they have union forum protection and in any of the following situations:

• the employee has a health condition that prevents or substantially hinders the performance of his or her work under regular conditions, without necessarily presenting a loss of qualified work capacity, such as when he or she is on sick leave or receiving medical treatment or current medical recommendations, among others;
• mothers during pregnancy, maternity leave or lactation up to six months after giving birth or to fathers if the mother is not working;
• pre-pensioned status, when the employee has three years or less to achieve retirement;
• a mother that is head of the family, who, being single or married, is the female head of the household and has permanently under her charge, emotionally, economically or socially, her own minor children or other people who are disabled or unable to work; and
• an employee that has filed a complaint of labour harassment, in which case the reinforced labour stability will be in force for six months following the filing of this complaint.

Are there special rules for mass terminations or collective dismissals?

Yes, for collective dismissals, employers require a previous authorisation from the Ministry of Labour. Colombian labour legislation considers that there is a collective dismissal when, in a period of six months, an employer unilaterally dismisses an established percentage of its employees, according to the number of employees in the company.

In the event of a collective dismissal, employers must pay the legal indemnification for termination. However, terminations by mutual agreement do not count as dismissals for these purposes.

Are class or collective actions allowed or may employees only assert labour and employment claims on an individual basis?

Outside union-related claims, employment-related claims are filed on an individual basis.

Does the law in your jurisdiction allow employers to impose a mandatory retirement age? If so, at what age and under what limitations?

No, with an exception made for public servants, who have a mandatory retirement age of 65.

Dispute resolution

May the parties agree to private arbitration of employment disputes?

Not for an individual labour-related matter, but it is possible to agree arbitration for collective employment disputes.

May an employee agree to waive statutory and contractual rights to potential employment claims?

It depends on whether they are statutory or extra-legal rights. Employees cannot waive statutory rights, but they can waive extra-legal rights.

What are the limitation periods for bringing employment claims?

Employment claims can be filed during the three years following the termination date, a period that can be suspended once if the employee submits a petition to the employer, in which case the term will start again.

Update and trends

Are there any emerging trends or hot topics in labour and employment regulation in your jurisdiction? Are there current proposals to change the legislation?

As of June 2019, a hiring party must withhold and pay its independent contractors’ mandatory social security contributions.

The Ministry of Labour is working on regulation for the payment of hourly social contributions, as part of its policy of formalising labour relations.