Colombia can offer great opportunities for companies to expand their operations into Central and South America but the process for hiring an employee in Colombia is complex. You must stay aware of all the steps and rules to remain fully compliant with local labour laws that cover the onboarding process.
The first step in the process is for an employment contract to be created by the employee. This is a written contract that will outline the position for the new employee. Colombia has a mandatory social security system and the next step, once an employee is hired, is enrolment in the social security system so that the employee is provided with benefits. The employee must choose from nine different options for their health insurance plan and pick from five different pension entities. The new employee must also be enrolled by the employer in a labour risk entity for professional risk and worker's insurance. Lastly, the employer will enrol the new employee in the welfare entity. Foreign employees require a valid work visa and there are other mandatory registrations for these types of employees.
The complexity of onboarding begins with these enrolments because all the registrations must be completed on the same day as the employee begins their employment with the company. The documents must also be signed in person and on paper with no digital signatures allowed for submitting the forms to the social security office.
Local legislation Resolution #2346 of 2007 states that three days prior to the start date of employment, every employee must also have a mandatory medical exam with a doctor that is provided by the company.
Payroll rules in Colombia
Employees in Colombia are paid either monthly or twice a month depending on the company. In Colombia, the legal minimum monthly wage for 2019 is set at $828.116 Colombian Pesos. There are 13 pay periods in Colombia, with the 13th salary paid as a bonus no later than the last day of June and the other half has to be paid no later than 20th of December. The legal bonus is paid proportionally to the time worked.
There is another type of salary call the integral salary. Integral monthly minimum wage for 2019 is $10.765.508 Colombian Pesos including fringe benefits. Employees who receives integral salary, do not receive 13th salary. This method of salary payment, in addition of rewarding regular...