We hereby inform you that on April 30th of this year, the National Congress approved the Law of the Capitalisation Labour Reserve Fund, administered by the Private Contributions Regime (RAP). This fund will be made up of the contributions made by the employer to guarantee the payment of severance pay or seniority bonuses to workers, once the individual work relationship has ended.

Benefits of the Labour Reserve Fund Law

  • Employees are guaranteed compensation for length of service in cases of resignations, dismissal or mutual agreement.
  • Employees will be allowed to receive 100% of the balance of their labour reserve account upon termination of their employment.
  • The Law obliges the employer to supplement the payment to the employee if the balance of the labour reserve account is less than certain percentages of the severance payment.
  • An expeditious procedure is established for the RAP to deliver the value in the labour reserve within a maximum period of one month.

Ensure your company complies with these new regulations and benefits fully from the new Labour Reserve Fund Law. Contact Auxadi today for expert guidance and support in managing your corporate finance and employee benefits. Let us help you navigate these changes smoothly and efficiently. Reach out to us now to get started.

Can Auxadi help?

Auxadi can become your ideal partner. We offer a one stop shop value added outsourcing services in the areas of accounting and reporting, tax compliance, payroll management and representation services, among others.

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