On February 18, 2020, Law No. 126 (the "Law") that establishes and regulates teleworking was sanctioned, laying the legal foundations of an employment relationship modality that has been used for a long time in the Republic of Panama.

The Law seeks to regulate that the services and functions performed by employees are carried out without the need for their physical presence, using telecommunications means, through which the employer exercises control and supervision of the work.

The way to implement telework is through the employment contract, either at the beginning of the relationship or through an addendum to the employment contract, which will include the conditions that will govern the distance employment relationship and it should be noted that its implementation is reversible at all times.


Said documentation must be countersigned by the Panamanian labor authorities. The employer may unilaterally request at any time the employee to physically return to work at the offices, by giving advance notice in accordance with the provisions of the employment contract (or addendum) that authorizes teleworking.

The 2 modalities of telework contemplated in the Law are:

  • Partial Teleworking: the employee will work at least one working day a week in the physical facilities or where indicated by the employer.
  • Complete teleworking: the employee works all the days outside the physical facilities of the the employer.

The Law also recognizes rights to workers, such as recognition of occupational accidents, payment of overtime, subsidies for expenses, training, social security, protection of health and professional safety, and all other rights and obligations established in the Labor Code of the Republic of Panama.

Finally, the Law seeks to create a National Telework Network, promoted by the Ministry of Labor and Labor Development, in conjunction with the private sector, universities, public sector and social organizations to promote telework in the national territory.