How Will an Employment Legislation in Colombia Have an effect on Productiveness?

Daniela James, Nation Supervisor in Colombia

In our newest Q&A, Daniela Jaimes Bautista, Colombia’s Nation Supervisor for Biz Latin Hub, discusses the Colombian authorities’s plans to progressively scale back the (official) work week from 48 to 42 hours and normal employment regulation in Colombia.

Ms. Jaimes is a lawyer specialising in business Legislation, with ten years of expertise within the fields of company, business and employment regulation in Colombia within the service sector.

See additionally: Beginning a enterprise in Colombia

Biz Latin Hub: What would be the most important adjustments to Colombia’s workday in 2023?

Daniela Jaimes: Beginning mid-2023, the 48-hour work week will progressively be lowered. Colombians will work one hour much less every year, and this discount is not going to negatively have an effect on wage, advantages, or the worth of the each day working hour. The preliminary goal of the measure is to scale back the workday to 42 working hours per week by the 12 months 2026. It would begin with one hour much less within the first two years (2023 and 2024) and two hours much less within the following years (2025 and 2026).

Infographic of the employment law in Colombia by Biz Latin Hub
There are numerous components to control employment regulation in Colombia

BLH: Colombia’s so-called “21/01 of 2021 Legislation” will progressively scale back official work time from 48 hours per week to a most of 42 hours by 2026. What implications will this regulation have on Colombia’s financial system and productiveness?

DJ: Many members of Congress imagine that lowering the working day in Colombia just isn’t viable, contemplating that the financial system goes by means of a important second. Additionally it is unsure what opposed results this invoice might have on the nation’s enterprise neighborhood. Moreover, they argue that it does nothing to scale back casual working within the nation and will even exacerbate the scenario.

It’s legitimate to presume that lowering the working day might result in decrease manufacturing as a result of fewer working hours. Moreover, it could indicate financial repercussions for the employer within the case of needing a employee for extra hours and the necessity to pay for extra hours that will already be thought-about extra time will begin to come up.

Many analysts level out that the sort of change just isn’t advisable for the productive sector and that that is an inconvenient time as a result of we all know the difficulties that firms are going by means of. Most try to reactivate and resume the tempo of manufacturing pre-pandemic. They argue that this measure might have an effect on the potential of restoration by having fewer working hours, which might end in much less productive working time, or the necessity to rent extra employees, growing manufacturing prices.

However, Colombia was in default of complying with the suggestions of the ILO since 1962 and the decision of the worldwide neighborhood on the discount of the utmost working day as a mechanism to free the employee from work burdens, which permits the enjoyment of household, social, leisure, and cultural areas that may enhance social indicators.

Nevertheless, regardless that Legislation 2101 of 2021 reduces the utmost working day from 48 to 42 hours per week, the employment regulation inColombia will proceed to be above the common working day of the OECD member international locations, which is 37 hours per week, nor will it attain the everyday working day really useful by the ILO of 40 hours per week, a piece week discovered in additional productive international locations.

BLH: What sectors/industries are more likely to be most impacted by this work hours-reduction employment regulation in Colombia?

DJ: The sector that has had essentially the most unfavorable opinions in regards to the new regulation is the economic sector. The Nationwide Affiliation of Entrepreneurs (ANDI) has expressed its opinion on this matter, stating that lowering working hours doesn’t indicate a discount within the time of the productive processes in an organization, which signifies that extra personnel must be employed. The sectors that subsist on manufacturing by lowering working hours could be essentially the most affected by having to rent extra personnel or pay extra extra time.

Infographic of growth in Bogotá by Biz Latin Hub
Bogotá may also be affected by the employment regulation in Colombia, nonetheless, it’s a metropolis stuffed with progress alternatives

BLH: What does the Colombian authorities say is the motivation for lowering work hours from 48 to 42? What’s the reasoning behind it?

DJ: The motivation that originally led to taking this measure was employees’ psychological well being and productiveness by lowering the necessary hours of Colombian employees, growing high quality time with household and buddies, and many others. Moreover, the regulation is created in order that employees have extra free time that they’ll use to get extra coaching and purchase new abilities. The expectation is that it’ll scale back the absenteeism of employees, profit the reactivation of employment, and create a greater consciousness of the connection between employers.

It’s changing into more and more frequent to see extra organizations adopting versatile measures, resembling working Fridays till midday, and producing extra versatile work schedules. I imagine the spirit of this laws is to create a greater work/life stability for employees.

BLH: As you talked about, the ANDI thinks the employment regulation in Colombia might have opposed results on Colombia’s financial system for the reason that manufacturing processes should modify to the brand new adjustments, leading to paying extra extra time or extra employees being employed to take care of present manufacturing ranges. Is that this a good evaluation of the brand new workday regulation?

DJ: Since this new working schedule has not but been put into observe, there’s solely hypothesis about this new regulation’s potential positives and negatives. However the evaluation of the ANDI from an goal perspective makes a variety of sense. The discount of the working day would have penalties, particularly for the economic sector; fewer working hours means much less manufacturing of merchandise which might increase their value, and it could turn into important to rent extra workers to maintain manufacturing ranges. If the employer is unwilling or unable to rent extra workers, the employer will face larger prices in paying extra time to employees. This might not obtain the regulation’s objective of producing extra free time for household, coaching, and many others.

It’s essential to see how this measure will evolve and the way enhancements that genuinely replicate the labour realities of employees and firms in Colombia could be carried out alongside the way in which.

Biz Latin Hub may help you with employment regulation in Colombia

At Biz Latin Hub, we offer built-in market entry and back-office companies all through Latin America and the Caribbean, with places of work in Bogota and Cartagena, in addition to over a dozen different main cities within the area. We even have trusted companions in lots of different markets.

Our unrivalled attain means we’re ideally positioned to assist multi-jurisdiction market entries and cross-border operations.

In addition to data about hiring in Colombia, our portfolio of companies contains hiring & PEO accounting & taxation, firm formation, checking account opening, and company authorized companies.

Contact us at the moment to be taught extra about how we will help you to find prime expertise or doing enterprise in Latin America and the Caribbean.

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