Colombia is a country located in South America and bordered by Venezuela, Brazil, Ecuador, Peru, the Andes mountain range, and the Caribbean Sea. It is a megadiverse country with rainforest, highlands, desert, and grasslands. Since the 2010s, Colombia has tried to diversify its economy by exporting modern pop culture to the world.
The minimum wage in Colombia is COP 1,000,000 pesos per month, as of 2022. Employees also receive a transportation subsidy of COP 117,172, making the total minimum wage due COP 1,117,172. The maximum number of working hours is 8 per day and 48 hours per week, and any work done past the standard working hours is paid as overtime (unless the employee earns more than 10x the minimum wage). Overtime is paid at 125% of the regular salary and 175% if worked at night.
Pregnant employees in Colombia receive 18 weeks of paid maternity leave, usually starting 1 week before the due date. Fathers receive 2 weeks of paid paternity leave. This leave also applies to adoption. Employers pay for the leave upfront at 100% of the salary, and later receive a refund from the government.
Employees in Colombia are entitled to sick leave at 2/3 of their regular pay. The employer pays for the first 2 days and the rest is reimbursed by social security.
There are 18 public holidays in Colombia, and employees who have worked at their company for 1 year are also entitled to 15 days of paid time off each year (accrued at 1.25 days per month). Employees can also qualify for bereavement leave and marriage leave.
Either party unilaterally terminating the employment contract must state in writing at the time of termination the cause or motive that led to the termination, except in some special cases.
The termination process must follow rules and regulations set by employment contract law, salary law, and social security regulations. Employers must offer a “fair” reason for terminating the employee in the eyes of the law or risk penalties and fines.
The notice period for termination in Colombia depends on the terms of the termination. No notice is required for dismissals due to misconduct. If an employee is being dismissed for poor performance, 15 days notice is required and employees can challenge the decision within 25 hours. Notice of 30 days is required for fixed-term contracts.
The severance amount depends on the cause of the termination, the salary, and the agreement.
For fixed-term contracts, the severance must be the remaining amount of salary due to the employee up to the last date of the contract.
For indefinite contracts, severance depends on the years of service and current salary:
Employees in Colombia are entitled by law to receive a bonus of an extra month’s pay every year, split into 2 payments in June and December. Exceptions to the 13th month salary might apply if the employee earns more than COP 13,000,000 per month.
★ 12% - Pension Fund
★ 8.5% - Healthcare Fund
★ 0.5%-8.7% - General Labor Risk Pool
★ 4% - Family Allowance Fund
★ 3% - Institute for Family Welfare
★ 2% - National Learning Service
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Unlike full-time employees, contractors work on projects with multiple companies at a given time and are technically self-employed. Full-time employees are solely focused on their employer and usually receive benefits (such as health insurance, equity or stock options, and time off) as an additional form of compensation. While it can be cheaper to work with international contractors instead of paying benefits to a full-time employee, you run the risk of misclassification. It's recommended to work with an EOR for contractor onboarding and payments, so you can know that your international contractors are paid compliantly and on time.