Compensation and benefits in Colombia can be confusing. Employers are required to give employees several standard benefits. Other supplementary benefits are not mandated by law but are expected by employees and can...
Read MoreCompensation and benefits in Colombia can be confusing. Employers are required to give employees several standard benefits. Other supplementary benefits are not mandated by law but are expected by employees and can attract top candidates to your open positions. You can choose to learn the regulations related to Colombia benefit management on your own, or you can work with a Colombia benefit outsourcing company to stay compliant and save time.
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Compensation and benefits in Colombia can be confusing. Employers are required to give employees several standard benefits. Other supplementary benefits are not mandated by law but are expected by employees and can attract top candidates to your open positions. You can choose to learn the regulations related to Colombia benefit management on your own, or you can work with a Colombia benefit outsourcing company to stay compliant and save time.
Colombia compensation laws state employees should be paid monthly. However, more casual employees can get paid weekly. While the minimum wage in Colombia is currently 908,526 Pesos per month (2021), the country changes its legal minimum wage every year. Pay close attention to any changes that could impact your employees.
The law also outlines overtime stipulations. For example, most employees in Colombia work eight hours per day and 48 hours per week. You can agree on flexible working days to adapt to your workers’ particular needs. Employees that work over the maximum workday are entitled to overtime pay of 25% extra during the day and an additional 75% at night.
Colombia recognizes 18 public holidays during which employees get time off. Employers are also required to give 15 paid days of annual leave for each year an employee works. In addition to paid time off, employees get a Semestral Bonus known as a prima de servicios. The bonus equals 15 days of salary paid to employees twice a year — once on the last day of June, then again within the first 20 days of December.
Mothers and fathers are also entitled to certain maternity leave benefits. Mothers get 14 weeks of paid maternity leave, which includes two weeks before they give birth and twelve after. Fathers receive eight working days of paid paternity leave.
A successful Colombia benefit management plan requires more than guaranteed benefits. Employers and employees can also agree on additional benefits such as food, clothing, or other bonuses. Any employee that makes up to twice the minimum wage gets transportation assistance and a supply of clothing and footwear based on the type of work they do.
Although the country has a universal health insurance plan, it’s not uncommon for employers to provide additional health insurance benefits. Employees can choose between the Contributory Regime (CR) or the Subsidized Regime (SR). Any extra benefits come from the employer.
Certain restrictions on benefits and compensation are essential to keep in mind. For example, employees cannot work over the maximum amount of hours per week unless they receive overtime pay per Colombia compensation laws. If you plan to provide statutory or extra benefits as part of a Colombia benefit management plan, you need to meet the monthly minimums. As of 2015, employees must receive a minimum monthly statutory transportation allowance – currently set at an amount of 106,454 pesos (2021).
When you’re establishing a business overseas, having the right resources to meet your employees’ needs is critical. You need to ensure your company offers a benefits plan that’s competitive and personally valuable for each of your employees. Your company must navigate several essential factors of your benefits strategy, from managing local employees’ expectations and meeting legal requirements to addressing your own budget constraints.
Your benefits plan should engage with local candidates competitively. Consider market standards and regulations in your region.
As an employer, you’re responsible for meeting the legally required minimums for benefits. You can also go beyond them to offer practical perks. Some of the more common supplemental benefits for workers in Colombia include:
National labor laws stipulate that you provide several fundamental benefits for your employees. The following provisions are legally mandatory:
Employees who earn less than two times the minimum wage are also entitled to additional benefits, including monthly transportation allowances and working dress and a pair of shoes every four months.
As you build your benefits program, you’ll want to develop a strategy that helps you balance your employee’s needs and your budget. The following steps can be helpful in the planning stages.
As you begin the development process, you must consider your available resources and how you want to use them. Identify your company’s goals for your benefits program. For example, if one of your objectives is to build a strong core team that will stay with you as your company grows, you might opt to provide more benefits. Take time to consult key stakeholders and evaluate your priorities.
Gain a holistic picture of regional market standards, employee needs, and industry expectations with a comprehensive needs assessment. You may consider conducting research through local employee interviews, questionnaires, and legal compliance investigations.
Next, complete a comparative benefits analysis to determine how your business can make the most of its available resources. With in-depth market data, you’ll be able to more effectively address fundamental employee requirements and position your company competitively in the market.
Once you have an accurate needs assessment and comprehensive gap analysis, you can use the data you’ve gathered to inform your benefits program development. As you prioritize benefits and allocate funding, ensure you consider employee contributions, administration costs, outsourcing needs, and any cost containment features.
Your expenses for administering employee benefits will depend on several key factors, including your industry, your employees’ unique requirements, and local economic conditions. Since there is so much variation from one company to the next, the average cost of benefits in the country may not be a useful metric.
Colombian labor laws require these percentages of income to cover mandatory benefits:
You are responsible for withholding taxes from supplemental benefits on a Pay As You Earn (PAYE) basis. Most supplementary benefits, such as bonuses, monetary offerings, and other perks, are considered taxable.
Colombia offers state-sponsored health care that all of your employees should be able to access. However, it’s common for employers to provide additional private insurance options that cover more services and offer better opportunities for fast, quality care.
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