We have previously discussed tax obligations applicable to companies doing business in Colombia. This article aims to broaden the discussion by focusing on certain legal and regulatory obligations facing Colombian companies in an ever-changing changing business landscape. Note that this is a select list of obligations; actual legal and regulatory obligations will vary depending on the industry involved.
PAYROLL TAXES (“PARAFISCALES”)
As discussed previously, under Colombian law, businesses are generally obligated to pay certain payroll taxes when hiring employees. These businesses typically contribute approximately 9% of total payroll amount. These payments are distributed as follows:
- • SENA (“National Learning Service”): 2%
- • ICBF (“Colombian Family Welfare Institute”): 3% as mandated by Law 89 of 1988.
- • Family Compensation Fund: 4% as mandaded by Law 21 of 1982.
Please check with your local accountant as these obligations may not apply to your business following the promulgation of Ley 1607 of 2012.
INTERNAL LABOR REGULATIONS
Pursuant to Articles 104 and 105 of the Substantive Labor Code companies are required to establish workplace policies and certain management guidelines that are intended to regulate labor relations within your business (“Workplace Policies”). Workplace Policies essentially serve as an internal regulatory framework that codifies specific rules, rights and obligations for both employer and employee. The documentation that is developed to comply with these regulations may specify certain sanctions in cases where employees do not comply with Workplace Policies. Note that employers can only apply sanctions mentioned in the Code of Labor and/or in the Workplace Policies documentation so long as these are consistent with local law.
Below is a select list of issues that your company Workplace Polices should address:
- •Work hours, overtime and nightshift policies;
- •Training policies;
- •Payment processing;
- •Vacation policies;
- •Medical examinations;
- •Work safety rules; and
- •Sanctions for failure to comply with Workplace Policies.
In general, companies will be required to develop Workplace Policies where the total number of employees exceed:
- • five (5) employees in commercial businesses;
- • ten (10) employees in industrial companies;
- • twenty (20) employees in agriculture livestock and forestry business; and
- • Ten (10) employees for companies operated in a variety of industries.
Failure to Comply
It should be noted that a failure to establish Workplace Policies could lead to substantial penalties levied by Colombian government agencies. However, in practice, this only becomes an issue when a company faces legal action by former employees bringing unrelated claims.
OCCUPATIONAL HEALTH PROGRAM
Pursuant to resolution 1016 of 1989, Colombian companies are required to implement a general “occupational health program” in order to ensure that they are meeting certain expectations within the much more general categories of Preventive Medicine, Labor Medicine, Industrial Hygiene and Safety. These programs are designed to preserve, maintain and improve the individual and collective health of employees utilizing a comprehensive and interdisciplinary approach. Employers will be required to invest both financial and human resources to ensure the safety of their employees based on (i) the specific industry involved and (ii) applicable laws and regulations.
MEDICINE, HYGIENE, AND INDUSTRIAL SAFETY COMMITTEE
Pursuant to resolution 2013 of 1986, Colombian companies employing ten (10) or more employees are required to organize and manage a Medicine, Hygiene, and Industrial Safety Committee. As its name suggests, the principal focus of this committee is to promote measures that facilitate and encourage the health and safety of employees. The work of this Committee tends to go hand in hand with the “occupational health program” discussed above. Note that for companies that have less than ten (10) employees, the company must coordinate with such employees to implement policies that would have been managed by a formal Committee under different circumstances.
COMMITTEE OF LABOR COEXISTENCE
Pursuant to resolution 652 of 2012, Colombian companies are required to create and operate a so-called, “Committee of Labor Coexistence” which has as its main focus the prevention of workplace harassment. This obligation applies to all companies, regardless their number of employees.
We hope this information is helpful to you. If you have additional questions regarding the subject matter in this post please access our Contact Form.
The information and materials on this blog are provided for general informational purposes only and are not intended to be legal advice. The law changes frequently and varies from jurisdiction to jurisdiction. Being general in nature, the information and materials provided may not apply to any specific factual and/or legal set of circumstances. We cannot guarantee that commentary posted by third parties is accurate. No attorney-client relationship is formed nor should any such relationship be implied. Nothing on this blog is intended to substitute for the advice of an attorney, especially an attorney licensed in your jurisdiction. If you require legal advice, please consult with a competent attorney licensed to practice in your jurisdiction.