Employment Contracts in Colombia

A Comprehensive Guide to Employment Contracts in Colombia
Colombian labor laws emphasize protecting employee rights, requiring employers to adhere to stringent legal frameworks. Whether hiring directly or through an Employer of Record in Colombia, understanding the essentials of employment contracts is crucial.

1. When Does the Employment Contract Start?
Employment contracts in Colombia are established once there is mutual consent between the employer and employee. While verbal agreements are valid for temporary roles, written contracts are required for long-term and specific arrangements.
💡 Pro Tip: Always opt for a written contract to ensure clarity and avoid disputes.

2. Key Components of a Colombian Employment Contract
A compliant employment contract in Colombia should include:
Job Title and Responsibilities: Define the role, duties, and expectations clearly.
Workplace Location: Specify whether the work is on-site, remote, or hybrid.
Contract Type: Choose from fixed-term, indefinite-term, or temporary contracts.
Working Hours: Standard work hours are 48 hours per week, typically spread across six days.
Compensation and Benefits: Include salary, allowances, and mandatory benefits such as health insurance, pensions, and social security.
Leave Policies:
Annual Leave: Employees are entitled to 15 paid days per year after completing a year of service.
Sick Leave: Covered by the employer for the first two days; subsequent days are handled by the Colombian Social Security System.
Maternity/Paternity Leave: 18 weeks of maternity leave and 2 weeks of paternity leave, fully paid.
Termination Terms: Outline notice periods, severance pay, and grounds for dismissal.
💡 Why This Matters: A comprehensive contract safeguards your business and aligns with Colombian labor laws.

3. Salary Structure in Colombia
Compensation in Colombia typically consists of:
Base Salary: The primary taxable income.
Bonuses: The “13th salary” or annual bonus is common.
Allowances: Transportation subsidies and meal allowances for eligible employees.
Overtime Pay: Strictly regulated and payable at premium rates for work beyond standard hours.
💡 Key Takeaway: A transparent and well-defined salary package improves employee satisfaction and ensures compliance.

4. Legal Considerations: Protecting Your Business
a. Non-Compete and Confidentiality Clauses
Non-compete agreements are enforceable if reasonable in duration and geographic scope. Confidentiality clauses protect your business from the misuse of proprietary information.
b. Statutory Contributions
Employers in Colombia must contribute to:
Social Security System: Covers pensions, health insurance, and labor risks.
Severance Funds (Cesantías): A mandatory annual deposit to support employees in case of termination.
Family Compensation Funds: Support employee welfare.
💡 Tip: Ensure timely contributions to avoid penalties and maintain compliance.

5. Background Checks and Employee Protections
Background checks are common in Colombia but must comply with local privacy laws. Written consent is required, and checks may include criminal records, education verification, and employment history.

6. The Importance of Written Contracts
Written contracts in Colombia ensure clarity and legal protection for both parties. They formalize the employment relationship and help prevent potential disputes.

7. Why Partner with GlobainePEO?
Expanding into Colombia requires expertise in navigating complex labor laws. By partnering with GlobainePEO, you can:
Streamline the hiring process.
Ensure compliance with payroll, taxes, and statutory contributions.
Focus on growing your business while we handle administrative challenges.

💡 GlobainePEO Advantage: As your trusted Employer of Record in Colombia, we provide end-to-end employment solutions tailored to your business needs.

Drafting compliant employment contracts is the foundation of successful business expansion into Colombia. Partnering with a Colombia EOR, like GlobainePEO, allows you to focus on your core operations while ensuring legal and administrative requirements are met efficiently.