Colombia: labor reform and its impact on corporate cost structure
On June 25, 2025, Law 2466 was passed and enacted, adopting the new Labor Reform in Colombia. This legislation, which is already fully in effect, aims to modernize and balance labor relations, strengthening workers' rights and promoting fairer, more dignified, and sustainable conditions for all actors in the labor market.
Employment contract
The general rule is an indefinite contract, limiting the use of temporary contracts to a maximum of 4 years. It will be applied as a rule to essential business tasks, to avoid precarious contracts. Additionally, new conditions are needed for specific or labor contracts.
The apprenticeship contract is formalized as an officially recognized labor bond, with full access to Social Security. For private corporations, there is the obligation to pay 75% of the minimum wage during the training phase and 100% during the production phase. This contract will last for a maximum of 3 years.
If you choose to monetize and not hire an apprentice, this will cost 1.5 minimum wages ($537.34) for each unassigned apprentice.
Hours of work and overtime
The night shift will begin at 7:00 PM (previously at 9:00 PM). It will take effect six months after the date of presidential approval, i.e., in January 2026. Additionally, there will be a gradual increase to 100% surcharge for overtime on Sundays and holidays, applicable in full starting in 2027. It will be applied by stages:
- 80% starting July 1, 2025.
- 90% starting July 1, 2026.
- 100% from July 1, 2027.
Due process disciplinary
The due process guarantee in labor disciplinary procedures is strengthened, with minimum formalities that every employer must respect.
Protection of special populations
This labor reform introduces additional mandatory obligations for employers aimed at safeguarding the rights of various social minorities and special populations. These groups include:
- Individuals with functional diversity (i.e., people with disabilities);
- Women who are victims of violence;
- Rural workers;
- Apprentices; and,
- Digital workers affiliated with technological platforms.
This improvement in working conditions also includes a connectivity subsidy (or allowance) for employees earning less than two minimum wages who work from home. This new benefit is financially equivalent to the existing transportation subsidy (auxilio de transporte).
Furthermore, the reform mandates the formalization of 'community mothers' (caregivers in community programs) and specifically addresses contractual restructuring through the elimination of hourly contracts (by removing articles 37 and 38 from the current law).
Digitalization and the digital economy
Rules are established for the formal association of digital delivery platform workers, with shared Social Security contributions between companies and independent workers.
New employer obligations
Among other mandates, the reform highlights the need for companies to immediately update their internal labor regulations and adopt specific measures against harassment and discrimination. Furthermore, the process for notifying the Ministry of Labor regarding the hiring of individuals with disabilities has been revised and reinforced.
Employment stimulus programs
The 'CREA EMPLEO' benefit is created, which provides incentives to employers who create new jobs for young people, women, and people over 50 years of age.
Additionally, the four-day workweek and the economic growth premium for businesses are eliminated.
Conclusions
The comprehensive labor reform in Colombia necessitates a mandatory update to all corresponding hiring and payroll processes for multinational corporations and investment funds operating in the country. Therefore, to ensure effective and secure payroll management and full compliance during this transition, do not hesitate to contact Auxadi to safeguard your operations in Colombia.
We invite you to contact us via our form for a personalized consultation.
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All information contained in this publication is up to date on 2024. This content has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this chart without obtaining specific professional advice.No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this content, and, to the extent permitted by law, AUXADI does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this chart or for any decision based on it.
