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DECREE 770 OF 2020

The Colombian government through Decree 770 of 2020, within the framework of the Economic, Social and Ecological Emergency, adopted measures to protect the unemployed, alternative measures regarding the working day and brought an alternative for the first payment of the service premium, creating in turn the “Support Program for the Payment of the Service Premium – PAP” and the “Support Program for Workers under Contractual Suspension”.

As a first step, the unemployed person who during the last five (5) years has made contributions for at least one continuous or discontinuous year to the family compensation funds and is in categories A and B, that is to say that his/her remuneration does not exceed $3,551,212, may access a monetary quota of the family subsidy and if he/she has saved in the unemployment protection mechanism, he/she will receive as a monetary benefit a value proportional to the amount of savings reached with payment to the FOSFEC. These benefits will be paid for a maximum of three (3) months.
Regarding working hours, the decree allowed that by mutual agreement between the employee and the employer, allowing a greater number of rest days for the employee during the week, the organization of successive work shifts may be defined, allowing the company or sections thereof to operate during all days of the week, provided that the respective shift does not exceed eight (8) hours per day and thirty-six (36) hours per week, without the need to modify the internal work regulations.
This decree also allows the regular forty-eight (48) hour week to be distributed in four (4) days a week, with a maximum daily workday of twelve (12) hours, without the need to modify the internal work regulations.
An important point is that the decree brings to Colombian employers an economic relief for the first payment of the service bonus, which empowers employers to negotiate the payment of this social benefit, stipulating as maximum date for the payment the twentieth (20th) of December 2020, and, likewise, it may be paid in up to three (3) installments. In conjunction with this bargaining power, the Service Premium Payment Support Program (PAP) was created, in which the state will subsidize half of the first payment of the service premium for employees earning up to $1,000,000.
The companies that will benefit from this subsidy will have to meet the following requirements:

  1. Have been incorporated before January 1, 2020.
  2. They must be registered in the commercial registry. This registration should have been renewed at least in 2019.
  3. Demonstrate the need for the state contribution by certifying a twenty percent (20%) or more decrease in income.

Finally, the Program of Assistance to Workers under Contract Suspension is created, which seeks to benefit the dependent workers of the applicants of the Formal Employment Support Program (PAEF). This allowance will be aimed at people who earn up to four (4) legal monthly minimum wages in force and whose labor contract has been suspended or who are on unpaid leave and are not covered by the programs Families in Action, Social Protection for the Elderly – Older Colombia, Youth in Action, Sales Tax Compensation – VAT, or the Solidarity Income Program.
It is important to carefully read the wide variety of legislative decrees issued by the national government, although they bring benefits and relief for Colombians, it must be determined what are the requirements and conditions to apply for them, and, to a large extent, what these decrees provide are spaces for negotiation between the different parties to the contracts. For this reason, Cuadro Legal and its network of expert lawyers can provide support to Colombian companies and workers and thus manage the difficulties that have arisen due to the economic crisis generated by COVID-19.
Remember that if you need professional legal advice, Cuadro Legal is one of the most comprehensive and best qualified firms to accompany you in this process.

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