international employment law firm alliance L&E Global
Colombia

Colombia: Extending special programs to support formal employment

On the 22 October 2020, the Colombian Congress issued Law 2060 to extend the two main economic programs created during the second state of economic, social, and ecological emergency declared by the President during the first semester of 2020. The first one has been called PAEF (by its Spanish Acronym) and seeks to support the formal sector in Colombia, while the second one is the PAP (by its Spanish Acronym as well), which aims at helping the employers with the payment of the second legal service bonus of 2020.

The current regulation, with the relevant modifications introduced by Law 2060, are the following:

  PAEF (Formal Employment Support Program) PAP (Payment of the Legal Service Bonus Program)
Periods of recognition From May until December 2020 and from January until March 2021. Frist and second payment of the Legal Service Bonus of 2020
Beneficiaries and conditions Legal Entities, natural legal persons, consortiums, temporary unions, trust properties and workers cooperatives, which should meet the following conditions:

·    Have been constituted before January 1st, 2020 (not natural persons).

·    Natural and legal persons must be registered at the mercantile registry done or renewed at least in 2019 (not trust properties).

·    Trust properties must be obliged to declare income tax and have a taxpayer identification number.

·    Applicants must certify an income decrease of 20% or more.

·    They have not received the monetary support for eleven times.

·    They have not been obliged to refund the monetary support.

·    Natural person should prove having at least 3 employees in the Social Security Payments of February, 2020

Legal Entities, natural legal persons, consortiums, temporary unions, and trust properties, which should meet the following conditions:

·    Have been constituted before January 1st, 2020 (not natural persons).

·    Natural and legal persons must be registered at the mercantile registry done or renewed at least in 2019 (not trust properties.

·    Trust properties must be obliged to declare income tax and have a taxpayer identification number.

·    Applicants must certify an income decrease of 20% or more.

Amount of the support Up to 50% MMW for female workers and 40% MMW for male workers (US $ 231 approx.)

Employers in the tourism, entertainment and recreational sectors could obtain up to 50% MMW for every worker, regardless their gender.

COP $220.000 for every eligible worker (US $ 58 approx.), but the employer must pay the legal service bonus and the support will be considered as a reimbursement
Eligible employees Active Workers (not suspended) in the Social Security Payment of the previous month to the application, from which 50% should be in the Social Security Payment of February 2020 Active Workers (not suspended) in the Social Security Payment of October, November and December 2020, which income base is between 1 MMW and COP $1.000.000 (COP S231 – 263)
Application process ·    Application form signed by the legal representative

·    Certificate of the income decrease and the payment of the payroll obligations of the previous month

·    Application form signed by the legal representative

·    Certificate of the income decrease and the payment of the legal service bonus of the second semester 2020

 

 


For more information on these articles or any other issues involving labour and employment matters in Colombia, please contact Alejandro Castellanos (Partner) of López & Asociados at alejandro.castellanos@lopezasociados.net or visit www.lopezasociados.net