Permanent Employment Contracts in Colombia 2024

Colombia, a nation with cultural diversity and economic energy, provides the backdrop for a thorough investigation of Permanent Employment Contracts in 2024. These contracts serve as the milestone of handling employer-employee relations and are essential in determining the makeup of the Colombian labor market. This blog will walk you through the complexities of permanent employment contracts, explaining what's expected of you as an employer and employee, weighing the ups and downs, and pointing out the kinds of businesses that stand to gain the most from this kind of arrangement.

What is a Permanent Employment Contract?

This type of contract represents a permanent contract on a verbal or written basis without fixed terms. The employer pays benefits, vacation, social security contributions, and is liable for possible severance payments. The relationship ends when the contract is dissolved by either party.

An employer may terminate the relationship without liability if just cause is established and documented with a disciplinary process (conduct, performance, etc). If the termination is without cause, the employee is entitled to indemnification.

• For employees earning less than 10 minimum wage salaries per month (13.000.000 COP in 2024) which is equal for 3325,44 US $, compensation is 30 days of salary for the first year and 20 days of salary for each additional year.
  
  The minimum wage over the last 10 years:
  Source: Tradingeconomics
  
  
• For employees earning more than 10 minimum wage salaries per month, the compensation is 20 days of salary for the first year and 15 days of salary for each additional year.

More about Employment Contracts in Colombia

Employer's Payments

Salary and Compensation

• Adding bonuses and benefits to the payment.

Social Security

• Paying a portion of the employee's salary—between 12% and 16%—to social security, health, and pension funds.

Labor Taxes

• Overseeing employee's salary taxes (such as the 35% corporate income tax).

Leave and Vacation

• Establish explicit leave regulations (such as a minimum 15 days of paid yearly vacation).

Employee's Payments

Income Taxes

• Income tax requirements (such as progressive rates, which range from 0% to 37%).

Social Security

• Social security, health, and pension contribution (e.g., 4-12% of the employee's salary).

Development

• Training Programs, Certifications.

Pros of Permanent Employment Contracts

Security of Employment and Stability:

• Long-term commitment and decreased turnover.

• Important social security benefits are received by employees, which improves general wellbeing.

Possibilities for Career Advancement:

• Opportunities for skill development and career advancement are frequently presented by permanent employment.

Cons of Permanent Employment Contracts

Employers' Limited Flexibility:

• The ability to change the workforce's size in response to business needs may be restricted by permanent contracts.

Possible Difficulties with Workforce Management:

• Allocating resources and planning effectively are essential to managing a permanent workforce.

Strictness in Job Duties:

• Employee flexibility is often restricted by permanent contracts, which frequently have predefined job roles.

Which Companies in 2024 should Choose Permanent Employment Contracts?

• Permanent contracts are one way that a business can encourage commitment and loyalty.
• Sustainable development over the long run is facilitated by a stable workforce.

Sectors Having Extended Projects:

• Employers who take on long-term projects gain from having a steady staff.
• Project execution continuity is guaranteed, reducing interruptions.

Positions Needing Specific Knowledge:

• Top talent is drawn to and kept in positions requiring specialized skills by permanent contracts.
• Long-term career prospects increase workers' dedication.
  
  

In Colombia, permanent employment contracts represent more than just a contractual arrangement; they represent a commitment for growth and stability. This is evident as we examine the landscape of these agreements for 2024. Knowing the nuances of permanent employment contracts is a smart move for investors and employers alike in the ever-changing economic landscape of Colombia.

How can Ongresso help?

Navigating the complexities of permanent employment contracts in Colombia can be a daunting task for businesses aiming to thrive in this vibrant market. That's where Ongresso comes in. Our expert team offers tailored assistance in drafting and managing permanent employment contracts, ensuring they are fully compliant with Colombian labor laws. We provide peace of mind by handling legal nuances and regulatory requirements, allowing you to focus on the growth and development of your business. With Ongresso, you gain a partner dedicated to supporting your long-term success in Colombia, offering solutions that are not only compliant but also strategically aligned with your business objectives. Let Ongresso be your guide to harnessing the full potential of your workforce with confidence and legal precision.