Employers and employees must make compulsory contributions to the Colombian Social Security System, which protects employees from certain social risks. The Colombian system is compounded by the subsystems of healthcare, pension, labour risks and family allowance.
Employer’s contributions for the social security system average thirty percent (30%) of the employee’s contributory base income. The contribution percentage to the labour risks subsystem varies according to the level of risk the employee faces (the level of risk, and the activities framed in each, is defined by the law).
Employers who declare income tax in Colombia are entitled to an exoneration of their obligation to contribute to the social security subsystem in healthcare, family allowance and some other specific contributions, for their employees who earn up to 10 times the minimum wage. Such savings may lead to an employer’s final contribution to the social security system as seventeen (17%) of the employee’s contributory base income.
As the social security system is managed by different companies, both private and public legal natures respectively, the employee has the right to choose the agency he wants to affiliate with for his healthcare and pension. The employer chooses the agencies in the subsystems of labour risks and family allowance, as the contribution is assumed entirely by the employer.
The employer is responsible for withholding and delivering his and the employee’s contributions. Any kind of special information that needs to be provided to the system involving the employee’s situation, such as sickness, paid or unpaid leave, maternity, retirement from the company, etc. must be provided by the employer, and it is the duty of the employee to provide information which may be of relevance to the system.
Healthcare and Insurances
Healthcare is, in general, guaranteed by the social security system contributions. The affiliates and contributors to this subsystem may access a bundle of services in money and in kind. The services in kind are defined in the Obligatory Plan of Healthcare. Despite the fact of the coverage of the healthcare subsystem, it is possible for employers to provide their employees (as a benefit) with private healthcare or to cover a proportion of its costs. This benefit does not exclude the obligation for the parties to contribute to the social security system. In addition to the social risks covered by the social security system through an insurance scheme, the system provides, as a special insurance, a burial allowance in case of death of the employee.
Holidays and Annual Leave
Vacation: Every employee in Colombia, regardless of the type of employment contract or its length, is entitled to fifteen (15) working days of paid holidays for every period of 12 months of services. The employees in private companies who provide services to fight tuberculosis and the application of X-rays are entitled to fifteen (15) working days of paid holidays for every six months of services. The employee may opt to enjoy his holidays in time or in money, without a paid leave, subject to limitations. For instance, the money option is limited to half of the annual mandatory period.
As a common practice, holidays are arranged by agreement between the employee and the employer. However, according to the legislation, the employer can unilaterally determine the period of holidays for his employees, with a notice of fifteen (15) days before the start of the paid leave. Holidays can be accumulated for up to two (2) periods or four (4) periods in the case of trust employees, or foreigners whose family resides in a different place.
Public holidays: Employees are entitled to be absent from work on the public holidays defined by the law (Article 177 of the Colombian Labour Code establishes 18 public holidays) and are entitled to their regular remuneration. While it is common for the municipalities to create other public holidays related to local festivities, private employers are not bound to such holidays. If, under any circumstance, the employer requires an employee to work on a public holiday, such work must be remunerated as if the employee worked on a Sunday or his weekly rest day.
Maternity and Paternity Leave
Female employees are entitled to at least eighteen (18) weeks of maternity leave, fully paid, including an adopted child (the paid leave can be higher in case of multiple or preterm birth); at least one week of the maternity leave (and a maximum of 2 weeks) must be taken before the child’s birth. This payment is entirely under the charge of the Healthcare subsystem, as a benefit in money for the mother. On the other hand, the father is entitled to eight (8) working days of paternity leave, fully paid, also entirely under the charge of the Healthcare subsystem. The father might subrogate the mother’s maternity leave in case of her demise, abandonment of the mother (single parent) or sickness that makes her unable to take care of the child.
Sickness and Disability Leave
In the event of the employee’s sickness and/or an accident that causes a work incapacity, it is necessary to have the incapacity certified by a licensed practitioner or the competent authority, normally chosen by the employee, that clearly establishes the days required for the employee to recover and return to work.
Sickness leave is considered a valid cause of absence and is therefore paid under Colombian law. The remuneration during sickness depends on the origin of the disease or accident and is assumed as follows:
Professional sickness and/or work accident: professional sickness and/or work accident remuneration is assumed by the social security subsystem in labour risks on a base of 100% of the employee’s salary during the entirety of his incapacity to work.
Regular sickness and/or regular accident: (i) during the first 2 days of sickness leave, the employer must assume and pay 100% of the employee’s salary. (ii) Between the 3rd day and the 90th day, the payments are assumed by the social security subsystem in healthcare under a base of 66% of the employee’s salary. (iii) Between the 91st and 180th day of work-incapacity the payments are assumed by the social security subsystem in healthcare under a base of 50% of the employee’s salary. (iv) After the 181st day and until day 360 of work incapacity, the payments are assumed by the social security subsystem in pensions under a base of 50% of the employee’s salary. (v) After day 360, the payments are assumed by the social security subsystem in healthcare under a base of 50% of the employee’s salary.
In any case, the benefit can be lower than the mandatory minimum wage. Even though after the third day of sickness leave all benefits in money are assumed by the social security system, the law requires that the work incapacities between day 3 and day 180 must be paid by the employer, granting the faculty to the employer for a reimbursement from the social security system.
These same rules also apply to disability leave.
Any Other Required or Typically Provided Leave(s)
Trade union leave: trade unions are normally entitled to special paid leaves assumed by the employer, for some of their members to perform activities related to the organisation and accomplishment of the trade union interests. This paid leave(s), its rules for recognition, length and other special requirements are normally defined in the collective bargaining agreement.
Voting leave: employees are entitled to paid leave for purposes of voting in public elections (1/2 a day of paid leave) and for mandatory jury duty obligations (1 day of paid leave).
Mourning leave: a period of 5 days of paid leave must be granted to employees in case of the death of certain relatives, as defined by law.
Burial leave: employers are obliged to grant the necessary leave for his employees to assist with the burial of their co-workers.
Compassionate leave: while Colombian labour law mandates the obligation for employers to grant his employees with a paid compassionate leave, it does not define its scope or length. Employers are recommended to analyse on a case-by-case basis, the conditions to grant, and the length of, a compassionate leave.
Employment contract suspension: the employment contract can be suspended for specific causes, as defined by law. One such cause offers a general possibility for the parties to suspend the employment contract on mutual consent. This specific situation is commonly used by employers to grant his employees non-paid leave for personal reasons.
Garden leave: as previously mentioned, the employer can prevent his employees from attending to their work, but the obligation to pay their salary, as if it was a unilateral paid leave, remains. However, this option is prohibited whenever the employee has to receive unilateral paid leave, per the employer’s request, which may lead to discriminatory measures against the employee, or could potentially subject the employee to harassment.
Pensions: Mandatory and Typically Provided
Pensions are recognised under three different circumstances: Old age, invalidity and survivorship. Its amount is normally recognised by the social security system prior to the achievement of some specific requirements by the affiliate. The labour risks subsystem only recognises pensions in circumstance wherein the origin of said benefit is related to a work-related accident or disease.
Old Age Pension: as Colombia shares a private/public scheme for pensions, the requirements for old age pensions differ from the elected scheme by the employee. In the public scheme, the requirements for an old age pension are related to age (62 for men and 57 for women) and a defined minimum amount of contributions (1300 weeks). For the private scheme, the requirement for the pension depends exclusively on the affiliate’s savings in his mandatory account. No special pension plans for the private sector are allowed, as they were eliminated and prohibited under the Legislative Act 001 of 2005.
Employees who perform activities that, by law, are considered high-risk activities, are entitled to benefit from more gracious conditions to access an old age pension, but that also means that the employer has an obligation to make additional contributions to the subsystem.
Invalidity Pension: this is reserved for employees that suffer a permanent disability of more than 50% percent of his work capacity, evaluated by the competent authority. The total amount of the pension is assumed by the social security system.
The recognition of the old age pension or the invalidity pension is considered as a fair cause to terminate the employment contract, without the right of recognition of any severance pay.
Any Other Required or Typically Provided Benefits
In addition to the monthly salary, the employer is mandated to recognise the following benefits in money for his employees:
- a 30 days’ allowance paid annually (or pro rata) divided into two payments as follows: 15 days in June and 15 days before the 20th of December.
- a 30 days’ allowance (or pro rata) as a saving for the employee in case he is unemployed. This payment is not recognised directly to the employee, but to a specialised company which saves this amount and will only disburse it to the employee under circumstances defined in the law.
- a 12% interest rate (or pro rata) over the allowance mentioned in the last paragraph. This interest is recognised directly to the employee.
- a transport allowance paid monthly for employees who earn up to two (2) times the minimum wage. The amount of the allowance is defined, annually, by law.
- a pair of shoes and a working dress must be provided every 4 months for employees who earn up to two (2) times the minimum wage. The right to this benefit is only available to employees, under contract, after 3 months.
- in addition, the law establishes special benefits for certain economic sectors (i.e. the oil and mining sector).