All Colombian employees are obliged to be affiliated to one of the state benefit schemes or a private sector equivalent. The social security system aims to cover the whole population without any discrimination. The goal is that the beneficiaries now include not only those affiliated but also all their economic dependents in the nuclear family. There are two forms of affiliation; contributory by all employees and the self-employed, and subsidized membership for those who are unemployed, or who are amongst the many poor in rural or urban areas. The most common package of benefits that exist in the market are associated with life insurance, health programs, and transportation for those companies that have production operations or are located in remote places. Employee benefits in Colombia cost approximately 30%-50% of the annual salary.
Mandatory employee benefits in Colombia include pension, survivor benefits, short-term disability, long-term disability, healthcare, and paid time off. Supplementary employee benefits include health insurance, life insurance, company car, and small bonuses. Perks range from food vouchers, medical checkups, and birthday holidays.
The information below elaborates on all of these and more. Read Colombia’s market guide to get a broader sense of the employee benefits landscape in the country as well as common benefit costs and designs.
Mandatory Employee Benefits in Colombia
Employers pay 12%and employees 4% of their monthly wage. Contractors pay 16%. The maximum contribution per month is equal to 25 minimum monthly salaries (SMMLV). Employees who accumulate four+ minimum salaries contribute 1% to 2% more of their base income to the solidarity fund. Switching between the public and private system every five years is an option for employees. However, they must choose one plan ten years prior to retirement.
Survivors receive 45% of the employee’s monthly wage and the benefit increases 2%for every 50 additional weeks over the first 500 weeks. This is up to a maximum of 75% of the employee’s basic monthly wage. For pensioners, the survivor receives 100% of what the pensioner was receiving.
Employees collect 66.67% (2/3) of their salary for 90 days plus 50% of salary for an additional 90 days. A 180- day extension is possible. A subsidy is provided equal to 66.67% of the insured’s earnings in the month prior to the onset of the disability if the disability is caused by disease. Employers are responsible for paying the sickness benefit for the first three days. Social security’s subsidy begins on the fourth day, except in the cases of hospitalization, ambulatory surgery, or postponement. This subsidy will be provided for a continuous 180 days. For maternity, the benefit is 100% of the insured’s earnings for 14 weeks. Multiple births receive 16 weeks’ pay.
A disability pension depends on the insured’s age at the time of the disability. For insured less than 20 years of age, they must have lost 50% of their labor capacity by a non-work-related cause and must have contributed 26 weeks of premium payments the year before the disability occurred.
- Degree of Disability: 50% – 60%: 45% of the basic monthly wage, plus 1.5% of the basic monthly wage for every 50 weeks of contributions beyond 500 weeks (75% of monthly wage maximum.
- Degree of Disability: Greater than 65%: The benefit is 54%of the basic monthly wage, plus 2% of the basic monthly wage for every 50 weeks of contributions beyond 800 weeks (75% of monthly wage maximum.
- The average earnings of the individual in the ten years before receiving the benefits is how the basic monthly wage is calculated.
Healthcare insurance in Colombia is compulsory and provided by either the public sector or private medical plans. The public healthcare system consists of the Contributive System (CS), which is financed by taxes paid by both employers and employees, and the Subsidized System (SS) for those who are unable to pay for their healthcare.
The insurance component of the healthcare system is provided by Empresa Promotora de Salud (EPS), which are health “promoting ” organizations that offer a mandatory basic healthcare plan known as Plan Obligatorio de Salud (POS).
The EPS administers the POS and must either establish its own network of medical providers and facilities or contract for these services with Instituciones Prestadores de Salud (IPS), which are institutions that provide medical care directly to patients (e.g., hospitals, clinics, and laboratories).
Paid Time Off
- Vacation Days – Employers must offer 15 paid working days of annual leave for each year of service.
- Holiday Pay – There are 18 paid public holidays in Colombia.
- Maternity / Paternity Leave – The Substantive Labor Code in its article 236 indicates that every worker, in a pregnant state, is entitled to weeks of maternity leave. The weeks will be divided into, 2 prenatal and postnatal. During this time the employer is obliged to pay the full salary and will continue with social security contributions. The law gives working days for the men to accompany the birth of their child.
- Sick Pay – Employees are entitled to 100% of their salary for the first two days they miss due to illness. From the third day and up to days they get 2/3 of their salary from the social security system (EPS). and from day 91 to 180 they get 50% of the salary from the social security system (EPS). If an employee is injured on the job, they are eligible for 100% of salary for the duration of the absence up to 180 days from the social security system (ARL).
- License for serious domestic calamity – When the worker crosses a family or personal event that affects the proper performance of his duties, the employer is obliged to allow him to be absent for up to 5 paid working days when his emotional stability is affected. If the employer considers it, he may agree to the compensation of the time not worked, it will not count as overtime.
- Mourning leave – In case of death of the spouse, permanent companion, or any family member up to the second degree of consanguinity, the employer will grant leave up to five working days.
- License for companion burial – The worker who wished to attend the funeral of one of his work colleagues, may request permission, which must be granted as long as the operation of the company is not affected.
- License to perform official positions – When the worker is requested by the State to perform functions as a voting jury, the employer must allow him to attend and, within 45 days, grant him a day of paid rest.
- Voting Day – The employer must allow the worker to attend the elections days. As a reward for assistance, the worker will receive half a day of rest in the month following the voting day.
- Trade union license – The State obliges the employer to allow unionized workers to attend union meetings or activities within the working days.
Supplementary Employee Benefits in Colombia
Supplemental Health Insurance
These plans complement those of the POS, improving the service and quality of the institutions. They are financed in full by the insured with resources different from those of the obligatory contributions. Within the modalities of supplemental plans are the following:
- Health insurance policies issued by insurance companies.
- Prepaid medical plans issued by prepaid medical entities.
- Complementary care plans issued by the health-promoting entities.
In order to acquire a supplemental health plan, it is mandatory to be affiliated with the compulsory health plan in the contributing regime.
Life insurance is an appreciated benefit because it protects the economic instability that families face in the case of sudden death, disability, or serious illness of a member of the family, usually the head of the home. Through this, the insurance company agrees to pay an agreed amount (called compensation) to the beneficiaries upon death, disability, or serious illness of the insured.
Companies that have production operations, are located in remote places or are in the restaurant industry commonly offer cars or other modes of transportation for select employees.
Employers commonly offer employees small bonuses in the form of a debit card which employees can use for gas and groceries for example.
- Additional Pension Plan – Employees want to have a higher pension when they retire and are willing to exchange salary for an additional payment into their pension plan. This has tax benefits for the employee and the employer.
- Life Insurance – This is more of a benefit, but has variations such as a gap product that covers the gap between the maximum pension a person can obtain and the salary the person is receiving.
- Complimentary Health Insurance – Colombia’s social security system covers health insurance under a government plan. The perk is to offer a complimentary health plan that basically covers better hotel services in the hospital and the possibility of choosing a specific doctor.
- Medical Check-Up – Employers may offer employees a yearly general check-up including blood tests, heart exams, and body scanning among other things.
- Food – Some employers provide food that includes drinks, fresh fruit, and snacks.
- Personal Loans – For employees who require loans employers may offer up to one month’s salary as a loan without a review of credit.
- Birthday Holiday – Employees do not have to work on their birthdays.
- Educational Support – Employers pay 50% of postgraduate costs for employees. The employees must agree to stay with the company for a set period of time or they must repay these educational expenses.
Related Government Websites