Most foreigners are surprised to learn that employees–even independent workers, like your maid–have rights to liquidation payments if they are fired or choose to leave. These payments range from 20-50% of the former employee’s salary, depending on a variety of factors.
Benefits for Employees
If you have a Colombian business owner’s visa, you should know that it is your responsibility as an employer to make sure your employees’ health insurance, pension, uniform, and transportation are all paid for, or you could face substantial fines. If you are an employee with a Colombian work visa, you should know you’re entitled to these benefits.
Protecting yourself as an employer starts with understanding the laws and having a solid Colombian labor contract. It also helps to have experienced, qualified accountants in Colombia who can take care of your Employee payroll in Colombia for you, to make sure you’re paying each benefit that is required by law.
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Protect Yourself as the Employer
Doing right by your employees according to the law starts with properly setting up a Colombian corporation. Anyone with a tourist visa is eligible to start a simplified stock corporation (SAS), which you can then use to help you get your residency visa. To set up a Colombian corporation you will need a Bank account in Colombia, a tax identification number, and more, but the process is relatively simple.
As mentioned above, you should also get professional help with drafting your labor contracts in Colombia and hire a qualified Colombian accountant take care of your tax planning and payroll in Colombia responsibilities.
Labor Laws Favor the Employee
The labor ministry and court system tend to favor the employee when there is a lack of written documentation, so it is critical to follow domestic labor laws and have a signed labor contract in Colombia with your employee. Watch out for employees who take advantage of foreign employers who are not familiar with the labor laws in Colombia. For example, an independent worker might agree to a higher hourly rate in exchange for not paying their benefits, but upon termination he will claim he’s also entitled to back pay for those benefits.
Types of Colombian Labor Contracts:
- Project specific (construction, professional services)
- Replacement of personnel (replacement of employee out on maternity sick leave)
- Seasonal job (high season employment)
- Traditional fixed term full-time employment
- Traditional part-time employment
- Independent contractor (a professional who can work independently)
How We Can Help:
Our team of Medellín lawyers and experienced Colombian accountants can help you understand your tax and accounting in Colombia obligations. Every company must have an accountant to manage its taxes, and it’s critical to have an accountant who fully understands the current Colombian labor laws. Remember, the labor ministry favors the employee if anything is unclear.
Whichever side of the Colombia work contract you find yourself on, Colombia Legal & Accounting SAS can assist you with understanding your rights and responsibilities. If you have a Colombia business visa and are getting ready to hire employees, we can help you draft a contract that provides the necessary legal protection, combined with professional payroll services in Colombia.