Colombia Employer of Record (EOR) Services

What is an employer-of-record (EOR) in Colombia?

An employer of record (EOR), sometimes known as an international PEO, enables businesses of all shapes and sizes to quickly hire and onboard workers in Colombia, sometimes in just 1-2 business days. Employer-of-record (EOR) providers like Via have experts in Colombia that streamline global expansion and hiring. 

EORs help: 

• Manage payroll, mandatory benefits like parental leave, and supplemental benefits like private health insurance

• Draft compliant employment contracts for full-time employees

• Navigate payroll in Colombia, employment laws, and other human resources processes 

• Support full-time workers throughout the duration of the employee lifecycle, including onboarding, ongoing compliance, and offboarding

• Sponsor work permits and offer support during the work visa process

• Save thousands of dollars in entity set-up, legal & accounting fees, as well as 1,000+ hours of valuable time

What to know before hiring in Colombia

What is work culture like in Colombia?

When hiring in Colombia, the work culture may be a little different than what you’re used to if your business is based in the US or Europe. Here are some key cultural considerations to remember when conducting business in Colombia: 

• Formality and respect for hierarchy: In Colombia, the workplace is generally more formal and hierarchical compared to some other cultures. There is a clear chain of command, and employers expect employees to be respectful and professional. 

• Personal relationships: Colombians place a strong emphasis on personal relationships, and these often play a significant role in the workplace. Building trust and establishing a good rapport with colleagues is important, and socializing outside of work is common.

• Time management: Punctuality is not always a top priority in Colombia, and meetings may not always start on time. However, it is still important to show respect for colleagues' time and to communicate effectively if you are running late.

• Communication style: Colombians tend to be direct in their communication style, and may use humor and small talk to establish rapport. However, it is important to be respectful and avoid being overly confrontational.

• Work-life balance: Colombians value their personal time and prioritize family and social relationships. This means that there is often a strong emphasis on work-life balance, and working long hours is not always seen as a positive attribute.

What time zone is Colombia in?

Colombia's time zone is GTM-5. Colombia does not observe daylight saving time, so its time zone remains the same throughout the year.

If it's 9am in New York, then it's 8am in Colombia, but during daylight savings time if it's in 9am in New York, then it's also 9am in Colombia.

When it's not daylight savings time in the US, then its 9am in Chicago as well as 9am in Colombia. But, during daylight savings, if it's 9am in Chicago, Colombia would actually be ahead, at 10am.

In the US, Daylight savings begins on March 12, 2023 and ends on November 5th, 2023 at 2am.

What is the typical work week in Colombia?

Most people working in Colombia have 9.6 hour work days from Monday-Friday, but some employ do require a six day on Saturday. If Saturdays are required, hours are spread out to eight hours per day.

Starting in August of 2021, the government reduced the full-time hours to 42. However, these new laws won’t start to go into effect until 2023.

For work conducted between 9pm and 6am, employees are paid at 135% their normal daytime rates.

Additionally, overtime can only be accumulated at 2 hours maximum per day (or 12 hours maximum per week). This equals to 125% during daytime hours and 175% during nighttime hours. Like in Canada, employees who are in management positions are exempt from the mandates on time limits.

Employer costs

Hiring employees in Colombia always comes with standard overhead costs. 

Expected costs to hire an employee in Colombia include: 

• Annual salary

• Social security contributions for social programs

• Employment Insurance

• Benefit package

• Vacation and sick days

• Onboarding and training

What public holidays are in Colombia?

• New Years Day (1/1/2023)

• Saint Peter and Saint Paul (6/29/2023)

• Epiphany (Three Kings Day) (6/6/2023)

• Independence Day (7/20/2023)

• Battle of Boyaca (8/7/2023)

• Saint Joseph’s Day (3/19/2023)

• Maundy Thursday (4/6/2023)

• Assumption of Mary (4/15/2023)

• Good Friday (4/7/2023)

• The Day of the Race (10/12/2023)

• Labor Day (5/1/2023)

• All Saint’s Day (11/1/2023)

• Ascension (5/23/2023)

• Independence of Cartagena (11/11/2023)

• Corpus Christi (6/8/2023)

• Immaculate Conception (12/8/2023)

• Sacred Heart (6/19/2023)

• Christmas Day (12/25/2023)

Do Colombians receive bonus payments? 

In Colombia, it’s common for employers to provide their employees with bonus payments, known in addition to their salary payment.  

These bonuses are usually paid twice a year and are calculated based on the employee's monthly salary. The two main types of bonuses are the "prima de servicios," which is a mandatory bonus paid to employees who have been working for at least one year and the "prima navideña" or Christmas bonus (aguinaldo), which is typically paid in December.

The "prima de servicios" amount is equivalent  to one-twelfth of the employee's total salary earned during the year, and is usually paid in June or July. The Christmas bonus is equivalent to one month's salary and is usually paid in two installments, with half paid in June or July and the other half paid in December.

How is internet connection in Colombia? 

Although not available everywhere in Colombia, over the past few years, internet connection and access to the internet has vastly improved.

• 70% of the population has internet access, with average download speeds around 10.94 Mbps. 

Remote work in Colombia

Many companies have adapted to remote work. Enterprises and startups alike are implementing policies and infrastructure to support their employees working from home.

However, remote work in Colombia is not without its challenges. One of the main challenges is ensuring that employees have access to reliable internet and technology, especially in more rural areas where infrastructure may be limited. This can make it difficult for some employees to work remotely effectively.

Employment legislation 

Colombian labor laws set the national minimum working hours per day, termination and notice, terms for fixed-term contractors and indefinite contractors, minimum wage, holidays in Colombia, and prohibits discrimination in the workplace. 

Hiring process with an EOR in Colombia

1. Start recruiting Colombian talent using your in-house recruiter or by partnering with a recruiting agency based in Colombia (Via can introduce you to one of our local recruiting partners)

2. Choose the EOR partner that fits your hiring needs (EORs will already have a legal entity set up in Colombia) 

3. Complete work permit and work visa application, if the employee does not already have Colombian residency

4. Begin onboarding full-time employees with mandatory and supplemental benefits such as private health insurance 

5. Manage new worker onboarding, as well as ongoing payroll, benefits, compliance, and other local HR processes for your growing hub

6. Scale your hub to 20-100+ workers without establishing an entity or building a local HR team

7. Offboard workers with compliant severance packages 

End of employment in Colombia

An employment contract can be terminated by any party with or without a just cause. In Colombia, it is better to have both parties mutually consent to sever the whole contract, than for the employer to terminate the contract without consent of the employee.

In Colombia, severance pay is mandatory and equivalent to 1 month of salary for every year of the employee’s employment. If the employee only worked for a fraction of the year, then the employer is required to pay a severance  equivalent to the fraction of the year that they worked. Employers must deposit severance funds into employees accounts no later than February 14th. Severance interest occurs once a year at 1% interest and liquidation of interest must be paid to employees no later than January 31st of the following year of their employment.

EOR’s are responsible for ensuring that there is compliant offboarding and helping employees during end of employment. An EOR will help you create the best severance package and ensure that employees are terminated with respect.  

As you decide upon expanding your business into Colombia, you’ll find that you have 3 options: partner with a partner with a PEO, open your own subsidiary, or use an EOR service like Via. 

Why companies partner with Via

Via makes hiring talent around the world and building your global team seamless by helping you onboard workers in as little as 2-3 business days. With our easy-to-use platform, Via helps you manage local HR processes for direct employment such as work visas & permits, employee data privacy compliance, benefits, global payroll, background checks, and more. Our team of local labor lawyers and on-the-ground experts provide 24-hour local support and ensure that your company remains compliant while expanding abroad. As your employer-of-record/entity abroad, Via assumes responsibility for employment liability, so that you can focus on what matters: recruiting and managing your team.