Government of Gustavo Petro Urrego
On 7 August 2022, Gustavo Petro Urrego became the new President of the Republic of Colombia for the period 2022-2026, along with the Vice-President, Francia Márquez. Both are members of the political party Pacto Histórico, which is known for promoting center-left social, political and economic initiatives.
The governance plan of the President evidences that employment, compensation and social security matters will be part of the focal points of his office. Based on this governance plan, and the different public speeches and publications made by both the President and the Vice-President, we anticipate:
- An increase on some labor costs, which were diminished by Law 50, 1990, related to the percentages applicable to surcharges for overtime work and work performed at night, on Sundays and Holidays. Also, an increase in the amount payable as statutory severance for termination of employment without cause
- A structural reform to the pension social security subsystem
- The implementation of public policies aimed to reduce employment informality and to advance employment for young citizens
- Limitations to staffing and outsourcing schemes and a focus on the correct implementation of supply chains
- Audit compliance of health and safety regulations by employers
- Advocate for unionization in different economic sectors, and establish collective negotiations per industry
- Limitations to implement collective agreements with no unionized employees
The President appointed Gloria Inés Ramírez as Minister of Labor, who is a union leader who has held different important positions in our country, such as: President of the Colombian Educators Federation (FECODE – for its acronym in Spanish) and a member of the Executive Committee of the Colombian United Workers Head Office (CUT – for its acronym in Spanish). The new Minister is also a leader in defending women’s rights and gender equality.
We anticipate that this Ministry will strengthen its powers of inspection, surveillance and control over employers and will focus on the management of supply chain; implementation of outsourcing and staffing schemes; and unionization. We believe it is very likely that this Minister will include a new focus on the audits related to equity, diversity and inclusion in the workplace. Likewise, we anticipate an adjustment to the amounts of the fines imposed to employers upon verification of non-compliance situations.
We also predict that other authorities such as the Payroll and Social Security Tax Authority (UGPP) will also strengthen their surveillance and control powers and, thus, we expect a greater number of audits to companies during the coming years. It is clear that the government needs to improve its finance and we envisage it will do so through audits.
It is crucial that companies take prompt action to implement a legal revision plan on employment matters, through the implementation of internal audits focused on outsourcing and staffing schemes; payroll settlement; structure of compensation packages; existence and implementation of policies and corporate documents that serve as evidence in an eventual audit; implementation of corporate measures on equity, inclusion and diversity in the workplace; and the maturity of the labor relationships with unions and other representatives of employees. In general, it is essential for employers to be prepared for an eventual visit from the Ministry of Labor or any other authority, making sure that they meet compliance requirements and, most importantly, that they have all the documentation needed to demonstrate it.
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