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Employer of Record EOR in Colombia
With 10 million people living in its metropolitan area alone and coastal mountains that reach over 18,000 feet above sea level, beautiful Colombia in South America is the highest (in terms of altitude) city with that many people in the world. Traffic can be heavy, and businesses are run from the top, even more than usual.
Colombia is a region of the world where being invited to a bullfight by a fellow industry leader is a great honor, not a suggestion. To navigate this place, an EOR at your side can help you manage the employment process, HR logistics, and more to ensure that your business makes a good impression and runs a successful enterprise in these mountainous cities by the sea. Hiring SERVIAP as the Employer of Record for Colombia means bringing experts on board to handle all these issues for you.
SERVIAP can help with your global expansion needs. Contact us today to learn how you can expand your business with an Employer of Record in Colombia.
What is an Employer of Record?
An EOR or Employment of Record will become an employer in the place of a company so they can take on the responsibilities and liabilities that would otherwise fall onto your business. This works well for expanding businesses, as they often won’t know the ins and outs of owning a business in every country. Hiring an EOR gives them space to expand in more advantageous ways, so they can take on more employees, and begin the circle again.
An EOR will take on payroll, compliance with the laws of the country, timekeeping, any unemployment claims, the benefits to be paid and given, workers’ compensation in the case of accidents and otherwise, and more. You can also partner with a PEO, which is similar – they help with taxes, benefits, and HR.
SERVIAP functions as both a PEO and EOR, helping you in the most efficient way possible, so you can hand off the responsibilities for much of the employee operations. When you hire a company like us, we take on the responsibility and liability for any of the services mentioned above and handle the subsidiaries of the country, who could otherwise fine you or slow down operations. All you have to do is hand over the responsibilities and lease back your employees (whilst retaining all the control over your workforce).
SERVIAP serves as the client’s Employer of Record (EOR) handling all things human resources whilst freeing the client to focus on growth and expanding the business into new markets.
The tasks SERVIAP specializes in can include:
- Tax filing
- Workers’ compensation (if applicable)
- Unemployment claims
- Global hiring
- Talent acquisition (recruiting)
- Global HR management
How to Begin Hiring in Colombia
The most important document you need to be familiar with is the Colombian Labor Code. It details what your business needs to know about how to hire employees, the benefits they are entitled to, and what their duties are.
Another integral source of information is the documentation put out by the Colombian Ministry of Labor, which includes rulings by the local Labor Courts. Since 1990, the labor law known as Law 50 has changed how employment works in Colombia, including removing government responsibility for unemployment benefits. This means that if your employees can prove they were terminated wrongfully, your company could be responsible for the cost of their lost benefits.
This is just one important reason why an EOR is critical to your company’s success in Colombia. You need someone in your corner who knows the ropes of the local laws and can make sure that your business maintains good standing with local labor authorities.
Employment contracts are not required by any labor ministry in Colombia. However, the transparency they provide between your company and employees will help your company maintain the relationship on your terms. Probationary periods and contract durations for fixed-term workers should be enumerated in these contracts, as well as benefits and other logistics. Contracts should be in Spanish and English with pay denoted in Pesos.
Note that the government and labor ministry of Colombia do not recognize many types of employment that would be contractual options for your business in other countries. Limited or unlimited duration contracts can be presented under the same local laws. Navigating the limited options to find the best terms for your company’s objectives is one of the many benefits of hiring an EOR to deal with employment contracts.
Employee onboarding can take place in-person or online. Keep in mind that Colombia contains many large trade unions that have real power in changing the terms of an employee’s contract during the hiring process.
These unions will be particularly present for manufacturing firms or other businesses that are looking to hire a lot of workers in Colombia all at once. Aggressive representation for large groups of workers is very common in this country.
For individual employees, negotiations tend to be less pressurized, especially for junior employment roles. The more seniority an employee has, however, the more demands candidates will have. Negotiating these terms requires a working knowledge of Colombia’s negotiation tactics and trade union policies, which an EOR can offer your company.
Employee Benefits and Paid Leave
Employees work 48 hours per week in Colombia, usually Monday through Friday, at an average of 9.6 hours per day. Some contracts specify 8-hour days for 6 days per week. However, a new law from 2021 is phasing in regulations that limit the workweek to 42 hours, so you should be prepared for that change in the coming years.
Overtime is paid at 1.25x the usual wage while overtime on holidays is 1.75x. There are 18 holidays that companies need to be aware of in Colombia, including many religious observances and workdays. Employees also receive 15 vacation days with full pay and two sick days at 2/3 of their normal wages. After that, sick days up to 180 are paid through social security.
Expectant mothers receive 14 weeks of maternity leave with full pay while father receive 2 weeks of paternity leave. Colombia’s universal healthcare system entitles all employees to a health benefits package as part of either the Contributory Regime or Subsidized Regime.
Partner with SERVIAP Group as Your Employer of Record in Colombia
SERVIAP is a leading Employer of Record (EOR) ready to help your business expand operations throughout the world. EOR is a model of co-employment, where we assume total responsibility for your talent, allowing you to focus on the strategic activities of your organization.
Contact us today to learn more about how you can expand your business with an employer of record in Colombia.