Labor
JANUARY 2010 | LEGAL REPORT #14
COLOMBIA- LABOR AND SOCIAL SECURITY MATTERS FOR THE FIRST TRIMESTER OF 2010
a. Wages
According to Decree 5053 of 2009, the minimum monthly legal wage ("mmlw") for 2010 was set on the amount of Col $515.000 (approximately US$260).The increase in the mmlw compared to Col $496.900 set for 2009 reflects a 3.64% raise.
For those employees who earn the mmlw and those who earn the minimum integral wage, the corresponding adjustments must be made in accordance with the provisions set for this year.
In this connection, social security payments accrued in January should be done in February based on the new salary.
The minimum integral wage cannot be less than 10 mmlw, plus social benefits, which must always be at least 30% of said amount. Therefore, the minimum integral wage for 2010 is of Col $6.695.000 (approximately US$ 3.400).
In addition, Decree 5054 of 2009 established Col Pesos $61.500 (approximately US$30) as the transport aid for 2009, which means an increase of 3.7% over last year's value.
According to the judicial rulings issued by the Constitutional Court, employers must make the corresponding adjustments on wages in January to all employees irrespective if they earn a salary above the mmlw. In any case, these increases must be at least equal to the country's inflation rate.
Said position derives from the theory that Colombia has an inflationary economy in which the progressive decrease in the purchase capacity of the Colombian Peso necessarily produces a decrease in the employees' income if the wages are not adjusted year by year.
Omitting the adjustment in accordance with economy's inflation may give rise to claims against the employer based upon the precedent set by the Constitutional Court.
However, according to the Supreme Court rulings there is no special provision that orders the automatic adjustment of the employees' wages who do not earn the mmlw or the minimum integral wage.
b. Severance aids and interests on severance aids
Severance aids (cesantías) liquidated as of December 31, 2009, must be deposited in the severance fund in which the employees are registered, no later than February 14 of the present year.Also, interests calculated as of December 31, 2009, must be directly paid to the employees no later than January 31 of the present year.
c. Contributions to the Integral Social Security System
For 2010, contributions to the Integral Social Security System must comply with the following values:| Amount of the Contributions | In charge of the employer | In charge of the employee |
| Pensions subsystem (16% ) | 12% | 4% |
| Health subsystem (8.5%) | 8.5% | 4% |
| Professional risks subsystem (Between 0.348% y 8.7%) | Depending on the categorization made by the Professional Risks Manager, the corresponding percentage will be in charge of the employer | n/a |
Those employees that earn more than 4 mmlw (Col $2.060.000 for 2010: approximately USD$1030) must contribute an additional percentage for the pension solidarity fund.
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