Colombia: Observations and Precisions regarding the Formal Employment Support Program
On 24 February 2021, the Pension and Parafiscal Management Unit (UGPP is the acronym in Spanish), as the entity responsible for carrying out the Formal Employment Support Program (PAEF is the acronym in Spanish), made certain observations regarding the companies potentially benefiting from the PAEF versus those that are effectively covered by it.
The PAEF was created as a program to subsidise the payroll of active companies that adequately make contributions to social security for their workers; therefore, government support is recognised for active employers that had a decrease in their income of at least 20% and contribute through the Integrated Settlement Payroll Contributions (PILA is the acronym in Spanish) for their workers.
The Constitutional Court, through Sentence C-460 of 2020, analysed the constitutionality of the norms associated with the PAEF and indicated it is not appropriate to request the commercial register of those contributors who are not obliged to have it, but do properly carry out their contributions to the social security of his employees.
In response to the decision of the Constitutional Court, the UGPP indicates that from the fifth (5th) cycle of applications to the PAEF (applications made as of September 2020), the validations carried out within the framework of the program do not exclude those contributors that do not have a commercial register.
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
