How Will an Employment Law in Colombia Affect Productivity?

In our latest Q&A, Daniela Jaimes Bautista, Colombia’s Nation Manager for Biz Latin Hub, discusses the Colombian government’s strategies to step by step reduce the (official) operate week from 48 to 42 hrs and standard work regulation in Colombia.

Ms. Jaimes is a law firm specialising in professional Law, with ten yrs of working experience in the fields of corporate, commercial and work regulation in Colombia in the services sector.

See also: Starting a business in Colombia.

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

Daniela Jaimes: Starting mid-2023, the 48-hour perform week will steadily be diminished. Colombians will get the job done a person hour significantly less every yr, which will not negatively influence their income, gains, or the price of the each day doing the job hour. The original goal of the measure is to minimize the workday to 42 working hrs for each week by the 12 months 2026. It will commence with a person hour fewer in the initial two several years (2023 and 2024) and two several hours a lot less in the following yrs (2025 and 2026).

BLH: Colombia’s so-named “21/01 of 2021 Law” will little by little lessen official do the job time from 48 hours for each week to a maximum of 42 hours by 2026. What implications will this regulation have on Colombia’s economic climate and efficiency?

DJ: Numerous customers of Congress believe that that minimizing the working day in Colombia is not practical, thinking about that the financial system is going by way of a essential minute. It is also unsure what adverse results this monthly bill could have on the country’s organization community. On top of that, they argue that it does almost nothing to reduce casual functioning in the region and could even exacerbate the condition.

It is legitimate to presume that reducing the doing work working day could lead to decrease output thanks to less doing the job hrs. Also, it would suggest financial repercussions for the employer in the case of needing a worker for extra several hours, and the will need to pay out for much more hrs that would already be considered time beyond regulation will get started to occur.

Quite a few analysts point out that this change is not a good idea for the productive sector and that this is an inconvenient time due to the fact we know the troubles that providers are likely by way of. Most are hoping to reactivate and resume the speed of production pre-pandemic. They argue that this measure might impact the probability of restoration by having much less operating hrs, which could consequence in a lot less productive doing the job time, or the want to retain the services of much more employees, escalating production expenses.

On the other hand, Colombia was in default of complying with the recommendations of the ILO given that 1962 and the phone of the worldwide group on the reduction of the utmost working day as a mechanism to cost-free the employee from operate burdens, which allows the pleasure of family, social, leisure, and cultural areas that will increase social indicators.

Nonetheless, even however Law 2101 of 2021 lowers the optimum functioning working day from 48 to 42 hrs for every week, the work regulation inColombia will carry on to be above the regular performing working day of the OECD member nations around the world, which is 37 hours for every week, nor will it arrive at the usual operating day advised by the ILO of 40 hrs for each 7 days, a get the job done week located in far more successful nations around the world.

BLH: What sectors/industries are likely to be most impacted by this get the job done hrs-reduction work regulation in Colombia?

DJ: The sector that has experienced the most adverse thoughts about the new regulation is the industrial sector. The National Affiliation of Business people (ANDI) has expressed its belief on this matter, stating that lowering doing work several hours does not suggest a reduction in the time of the productive procedures in a corporation, which indicates that much more personnel would have to be hired. The sectors that subsist on production by cutting down working hrs would be the most influenced by having to hire much more personnel or fork out far more overtime.

BLH: What does the Colombian govt say is the determination for minimizing get the job done hrs from 48 to 42? What’s the reasoning behind it?

DJ: The enthusiasm that originally led to taking this evaluate was workers’ psychological health and efficiency by reducing the obligatory hours of Colombian personnel, growing high-quality time with family members and friends, etcetera. On top of that, the regulation is created so that employees have far more free time that they can use to get extra teaching and acquire new competencies. The expectation is that it will decrease the absenteeism of staff, reward the reactivation of employment, and produce a improved awareness of the connection amongst employers.

It is getting to be progressively widespread to see additional businesses adopting versatile actions, these types of as functioning Fridays right until noon and making a lot more flexible get the job done schedules. I consider the spirit of this legislation is to generate a superior function/lifestyle equilibrium for personnel.

BLH: As you stated, the ANDI thinks the employment regulation in Colombia could have adverse outcomes on Colombia’s economic climate because the output processes will have to change to the new modifications, resulting in having to pay extra time beyond regulation or extra personnel getting hired to retain current creation stages. Is this a honest assessment of the new workday regulation?

DJ: Given that this new doing the job schedule has not nevertheless been put into follow, there is only speculation about this new law’s attainable positives and negatives. But the assessment of the ANDI from an goal level of view helps make a large amount of sense. The reduction of the doing the job working day would have penalties, primarily for the industrial sector much less working hours usually means considerably less creation of items which would elevate their price tag, and it would become essential to use much more employees to maintain production stages. If the employer is unwilling or not able to employ the service of additional staff, the employer will face increased costs in paying extra time to workers. This would not realize the law’s target of making extra free of charge time for household, schooling, and many others.

It is crucial to see how this measure will evolve and how advancements that truly replicate the labour realities of personnel and providers in Colombia can be applied alongside the way.

Biz Latin Hub can assist you with employment regulation in Colombia

At Biz Latin Hub, we deliver built-in sector entry and back-office environment solutions all over Latin The usa and the Caribbean, with workplaces in Bogota and Cartagena, as effectively as more than a dozen other key metropolitan areas in the area. We also have trusted companions in several other markets.

Our unrivalled access suggests we are ideally put to assistance multi-jurisdiction market entries and cross-border operations.

As very well as awareness about employing in Colombia, our portfolio of services involves using the services of & PEO accounting & taxation, organization development, financial institution account opening, and company lawful expert services.

Make contact with us these days to understand much more about how we can assist you in finding prime expertise or doing small business in Latin America and the Caribbean.

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