How Will an Employment Regulation 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 steadily cut back the (official) work week from 48 to 42 hours and common employment legislation in Colombia.

Ms. Jaimes is a lawyer specialising in industrial Regulation, with ten years of expertise within the fields of company, industrial and employment legislation 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 steadily be decreased. 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 day by 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 should 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 various components to control employment legislation in Colombia

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

DJ: Many members of Congress imagine that lowering the working day in Colombia shouldn’t be viable, contemplating that the financial system goes by way of a crucial second. It is usually unsure what antagonistic results this invoice might have on the nation’s enterprise group. Moreover, they argue that it does nothing to scale back casual working within the nation and will even exacerbate the state of affairs.

It’s legitimate to presume that lowering the working day might result in decrease manufacturing on account 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 may already be thought of extra time will begin to come up.

Many analysts level out that such a change shouldn’t be 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 way 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 staff, growing manufacturing prices.

Alternatively, Colombia was in default of complying with the suggestions of the ILO since 1962 and the decision of the worldwide group 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, despite the fact that Regulation 2101 of 2021 reduces the utmost working day from 48 to 42 hours per week, the employment legislation inColombia will proceed to be above the typical working day of the OECD member international locations, which is 37 hours per week, nor will it attain the standard 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 prone to be most impacted by this work hours-reduction employment legislation in Colombia?

DJ: The sector that has had probably the most detrimental opinions concerning the new legislation is the commercial 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 probably the most affected by having to rent extra personnel or pay extra extra time.

Infographic of growth in Bogotá by Biz Latin Hub
Bogotá can even be affected by the employment legislation in Colombia, nonetheless, it’s a metropolis filled 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 staff’ psychological well being and productiveness by lowering the obligatory hours of Colombian staff, growing high quality time with household and buddies, and many others. Moreover, the legislation is created in order that staff have extra free time that they’ll use to get extra coaching and purchase new expertise. The expectation is that it’s going to cut back the absenteeism of staff, 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, equivalent to working Fridays till midday, and producing extra versatile work schedules. I imagine the spirit of this laws is to create a greater work/life steadiness for staff.

BLH: As you talked about, the ANDI thinks the employment legislation in Colombia might have antagonistic 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 staff being employed to keep up present manufacturing ranges. Is that this a good evaluation of the brand new workday legislation?

DJ: Since this new working schedule has not but been put into apply, there’s solely hypothesis about this new legislation’s attainable positives and negatives. However the evaluation of the ANDI from an goal standpoint makes plenty of sense. The discount of the working day would have penalties, particularly for the commercial sector; fewer working hours means much less manufacturing of merchandise which might elevate their value, and it could turn out to be 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 staff. This could not obtain the legislation’s purpose 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 mirror the labour realities of staff and corporations in Colombia might be applied alongside the way in which.

Biz Latin Hub might help you with employment legislation in Colombia

At Biz Latin Hub, we offer built-in market entry and back-office providers all through Latin America and the Caribbean, with workplaces 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 providers consists of hiring & PEO accounting & taxation, firm formation, checking account opening, and company authorized providers.

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

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