A new Law for Registration and Enlisting for the Integral Defense of the Nation (the “Law”) was enacted on June 25, 2014, forcing individuals and companies to register in the Integral Defense Registry (Military registry).

Among the obligations set by the Law the most relevant to employers are the following:

  • Compulsory registration of the individuals and legal entities;
  • Maintenance of the labor relationship while the employee is on military service;
  • Requirement for employees to obtain a certificate of registration in order to be employed;
  • A new requisite to obtain employers’ Good-Standing Certificates; and
  • Sanctions for non-compliance of the Law.

The Law sets a one-year period for the Executive (Ministry of Defense) to publish its Regulations.

A. Compulsory Registration

Individuals and private entities must register with the Integral Defense Registry. Taking aside the discussion regarding the reasons for making it mandatory to register for military service, the Law states that the procedure and requisites for registration of individuals and legal entities will be established by the Law’s Regulations. However, it gives new entities a 60-days period after incorporation to be registered, for which is currently impossible to comply with the Law.

B. Employment Relationship during Training or Military Instruction

Contradicting the provisions set by the Labor Law, the Law establishes that during re-training, training or military instruction, the employer must continue to pay the employee’s salary. However, according to the Labor Law, despite such time being included in calculating the employee’s seniority in the labor relationship, the obligation to pay salary is suspended due to the fact that during that period of time, the employee will not be rendering services for such employer.

C. Requirements of Registration by the Employer

An essential requirement for the employer when hiring or including an employee on the payroll is to request the certificate of registration with the Integral Defense Registry or a certificate that the candidate has complied with her/his military service duty.

D. Good-Standing Certificate

The Law places a new requirement for employers in order to obtain a Good-Standing Certificate, which is the certificate of registration. The a Good-Standing Certificate is a clearance required to enter into contracts, conventions and agreements with the State.

However, until the Regulations to the Law are published, the labor agencies, such as the Labor Inspectorate and the Social Security Institute, will not be able to request the Certificate.

E. Sanctions

The Law establishes sanctions applicable to individuals and legal entities failing to comply with the obligation of registering before June 25, 2015, as well as to those employers who fail to obtain the certificate from their new employees.

Additionally, regarding the sanctions set by the Law it is also uncertain which agency will be entitled to impose them. The Law creates different agencies in the framework of the Ministry of Defense, whose scope will be defined by the Regulations, making it also impossible for individuals and entities to be legally sanctioned until the Regulations are published.

Taking into account that the Law specifically states that the agency entitled to impose sanctions and the requisites for legal entities to be registered, will be published in the Regulations to the Law; The Law will not be fully in force until then, specially obligations related to employers.