Expanding your business to Colombia can be an exciting opportunity, but it comes with challenges—especially if you're unfamiliar with the country's legal, cultural, and bureaucratic landscape. Hiring in Colombia can potentially derail your operations. Here's a breakdown of the top 7 Legal Pitfalls of Hiring in Colombia without expert support.
Navigating Complex Labor Laws
Colombia’s labor laws are intricate and can be difficult to understand, especially for foreign businesses. For example, indefinite contracts are the norm in Colombia, which means employees are typically hired with no defined end date. If you terminate an employee without just cause, you may be faced with severance costs, which can amount to several months of salary, depending on the length of employment.
Additionally, misclassifying workers is a common mistake for foreign businesses. Service contracts are meant for temporary or freelance work, but if you treat someone on a service contract as a permanent employee, you could be liable for the same benefits as a full-time worker. This includes things like healthcare, pension contributions, and severance pay. Misclassifying employees can lead to legal disputes, fines, and penalties.
Complicated Payroll Management
Managing payroll in Colombia can be daunting due to the country's complex system of mandatory benefits. These include healthcare, pension contributions, and severance pay (cesantías), which must be accurately calculated and deposited on time. Without a trusted staffing company, managing payroll can become overwhelming, leading to mistakes and costly penalties.
Failure to Comply with Mandatory Benefits
In Colombia, employers are required by law to provide mandatory benefits such as the Prima de Servicios (Service Bonus), which equals 30 days of salary per year, paid in two installments. Additionally, severance pay must be deposited into a special fund for the employee’s protection. Non-compliance with these benefits can result in legal disputes or fines.
Limited Access to Background Checks
In Colombia, background checks require explicit consent from the candidate. This makes it harder to verify whether a potential employee meets your standards for safety and reliability. Navigating this can be challenging without the proper knowledge of local laws.
With SD Solutions, background checks are never an issue. We manage the entire process of screening candidates, ensuring you get the information you need while adhering to Colombian privacy regulations. We take the responsibility off your shoulders and handle it efficiently and legally.
Managing Public Holidays and Family Days
Colombia has one of the highest numbers of public holidays globally, and employees are accustomed to taking these days off. On top of that, Colombian law mandates Día de la Familia (Family Day), which gives employees two days off annually to spend time with their families. Managing these days off can be challenging, especially without proper knowledge of local law.
Difficulty in Employee Onboarding and Integration
Onboarding employees in Colombia is more than just signing a contract—it requires understanding local work expectations and cultural nuances. Misunderstandings can lead to poor integration and high employee turnover. Without a trusted staffing company, the onboarding process can become inefficient and costly.
Risk of HR Disputes and Legal Challenges
Colombian labor laws favor employees, and labor courts are known for their protective stance. If you improperly terminate an employee or fail to meet the requirements for contracts, you could face lawsuits, fines, and other legal challenges. Handling these matters incorrectly can result in costly financial and reputational consequences.
Conclusion
Hiring in Colombia without the support of a trusted staffing company exposes your business to numerous legal, financial, and operational risks. From navigating complex labor laws to managing payroll, benefits, and cultural differences, the challenges are significant. A staffing company provides the expertise, cultural understanding, and legal knowledge necessary to ensure smooth operations and compliance. Don’t face these challenges alone—let SD Solutions handle all the risks and guide your staffing strategy in Colombia, setting your business up for success.
You do you —
We take care of everything else. Imagine having a team that feels like they’re just in the next room, even though they’re halfway across the world. These are professionals who seamlessly align with your company’s culture and are fully dedicated to your goals. While you focus on driving your business forward, we handle all the infrastructure and logistics, making it effortless for you to build and manage a global team.
