How to hire in Colombia through an EOR

Colombia's labor code is strict about contract formalities, and getting them wrong can cost you real money. The biggest surprise for most hiring managers: fixed-term contracts must be in writing, or they automatically become indefinite. Skip the paperwork and you've just hired someone permanently.

Here's what you need to know before you hire.

Contract types and when to use them

Colombia recognizes three main employment contract types. Indefinite contracts are the default and most common. They have no end date, can be verbal or written, and continue until either party terminates. Most companies use these because they're flexible and don't require written documentation to be legally valid.

Fixed-term contracts have a defined end date and must be in writing. You can set them for any duration up to three years, and they can be renewed indefinitely. The catch: if the initial term is less than one year, you can only extend it three times before the law requires you to either end it or convert it to a one-year term. These work well for project-based roles or temporary needs.

Duration-of-work contracts tie employment to the completion of a specific project or task. Once the work is done, the contract ends automatically. These are useful for discrete projects with clear endpoints, but you need to define the scope precisely in writing.

Part-time employment isn't a separate contract type in Colombia. It's just an indefinite or fixed-term contract with reduced hours, and the same rules apply.

What must be in the contract

Colombian law requires three core elements for any employment relationship to exist: the person provides services directly, they're subordinate to the employer, and they receive compensation. Beyond that, contracts must specify the nature of work, compensation amount and form, and contract length.

Fixed-term contracts must be in writing. If you don't put it in writing, the law presumes it's indefinite. Indefinite contracts can be verbal, but written is always safer. Contracts must be in Spanish, though English can be included alongside if needed.

Probation periods are allowed. For indefinite contracts, probation can't exceed two months. For fixed-term contracts, it's capped at one-fifth of the total contract duration or two months, whichever is shorter. During probation, either party can terminate without liability.

If a fixed-term contract expires and neither party submits written termination notice 30 days before the end date, it automatically renews on the same terms. You have to actively end it or it rolls over. That catches a lot of companies off guard.

Employee vs. contractor: where companies get burned

Colombia's legal test is straightforward: if someone provides services under your authority, receives compensation, and works on your terms, they're an employee. It doesn't matter what you call the relationship or what the contract says. The substance controls.

Misclassification is expensive. If you treat an employee as a contractor, you're liable for all unpaid social security contributions (pension at 12%, health at 8.5%, labor risk at 0.522% to 6.96% of salary), back wages, severance, and potential fines. The labor ministry can audit you, and employees can sue for damages. Intent doesn't matter and there's no safe harbor.

Non-compete and intellectual property clauses are enforceable in Colombia if they're reasonable in scope and duration. Non-competes must be narrowly tailored to protect legitimate business interests and can't be indefinite. IP assignment clauses work if they're explicit and cover work created during employment. Don't assume either applies automatically. Write them into the contract.

Colombia requires 18 paid public holidays a year, on top of 15 days of annual leave. That's more time off than most countries offer, but if you're hiring locally, the legal minimum usually isn't enough to attract strong candidates.

Time off

Employees get 15 business days of paid annual leave after 12 months of service. It accrues at 1.25 days per month from day one, but they can't take it until the year is up. So someone who starts on March 2 can take vacation from March 2 the following year.

They're required to take at least 6 consecutive business days each year. You can split the remainder by mutual agreement, and unused days carry forward up to 2 years (or 4 years for managers and specialists). If the contract ends early, pay out any accrued leave proportionally at their current salary rate.

Public holidays are paid and sit completely separate from annual leave. If someone works on a public holiday, you owe them double pay plus a compensatory rest day. Here's the full list:

All leave types

Here's what the law requires. Job protection applies across all leave types unless noted below. Pay details are in the table.

Employees with tuberculosis or X-ray exposure are entitled to 30 days of annual leave instead of the standard 15. You can't dismiss an employee during maternity leave or while they're nursing.

Mandatory benefits

You need to enroll employees in social security from day one. It covers health, pension, and occupational risks. The total contribution is 28.5% of salary for family health plans, or 12.5% for individual plans.

As the employer, you contribute 8.5% for health, 12% for pension, and 0.522% for ARL (work risks). Employees contribute 4% for health and 4% for pension. Everyone gets health coverage through the public EPS system.

There are no unusual mandatory perks like meal vouchers. That said, overtime kicks in over 48 hours per week at a 25-75% premium, and employees are entitled to one rest day per week.

What people actually expect

If you're hiring skilled workers in Bogotá or Medellín, the legal minimum won't get you far. Most local professionals consider 20-25 days of annual leave standard, often with some flexibility on carryover.

Private health insurance is usually at the top of the list. The public EPS works, but it's slow and basic. Employees, particularly expats and tech workers, expect a supplemental plan that covers faster access and English-speaking doctors.

Remote work stipends have become common: COP 300,000-500,000 per month for internet and home office setup. Meal allowances (COP 20,000-30,000 per day) and transport subsidies also go a long way. Education support or gym memberships can help you stand out further.

If you stick to the bare minimum, you'll likely see higher turnover and a smaller applicant pool. Bumping annual leave to 20 days, adding private health coverage, and offering a remote stipend will make a real difference in who you can hire and how long they stay.

Firing someone in Colombia without cause means you'll owe severance. Get it wrong with a protected employee, and a court can order reinstatement plus back pay. Document everything carefully, or use an EOR to keep things on track.

Firing someone

You can terminate at any time. Without just cause, you'll pay severance. With just cause, severance isn't required, but the process has strict rules you need to follow.

Valid grounds for just cause include falsifying qualifications, violence or insults at work, damaging company property, leaking confidential information, poor performance, repeated legal breaches, criminal conviction, addiction, health and safety violations, inability to do the job, or chronic illness. Give the employee a chance to respond in writing before terminating. Send written notice that cites the specific facts and the rules that were breached.

Unfair dismissal applies if you let go of a protected worker without just cause. Protected categories include union reps, pregnant women, those on maternity or parental leave (including partners of economically dependent employees under Law 2141 of 2021), workers within 3 years of pension eligibility, and anyone who filed a verified harassment claim in the prior 6 months. During collective bargaining, potential beneficiaries also require just cause. If a court finds the dismissal unfair, reinstatement is on the table, not just a payout.

Probation gives you more flexibility early on. You can end employment for poor performance, misconduct, role misfit, or absences with less procedural burden. Colombia's labor law generally favors employees. The recent Law 2466 of 2025 adds formal defense periods for disciplinary actions, so the process is getting tighter.

Notice periods

Indefinite contracts don't require notice, even without cause. Fixed-term contracts need 30 days' notice before expiry if you're not renewing. For just cause terminations involving things like poor performance or addiction, give 15 days.

Severance

Severance only applies when you terminate without just cause. It's not required for just cause terminations, contract expiry, death, or mutual agreement. There's no statutory cap.

The calculation is 30 days' salary for the first year worked, then prorated at 30 days per 360 days for partial years after that. On the final day, you'll also need to pay out any unused vacation, bonuses, or other outstanding entitlements.

Example: 2 years 6 months at $2,000 monthly salary = 90 days (2.5 x 30) = $5,000.

Work permits and visas

You can hire foreign nationals in Colombia through an EOR, which acts as the legal employer and handles sponsorship.

The main visa types are the TP-4 work visa for employees (tied to a job offer) and the TP-7 for remote workers, also known as the digital nomad visa. You'll typically need a job offer letter, proof of qualifications, a clean criminal record, and health insurance. Your EOR can manage the sponsorship documentation.

Processing usually takes 1 to 3 months. The TP-7 digital nomad visa lasts up to 2 years and is renewable. Remote workers employed by a foreign company don't need a work permit, but if you're setting up local compliance through an EOR, there may be additional requirements to consider.

A few other things worth knowing

Data protection is governed by Law 1581 of 2012. You'll need employee consent to process personal data, and if you're handling sensitive information, you may need to appoint a data officer. Fines for breaches can reach up to 2,000 minimum wages.

Trade unions carry real weight in Colombia. If you have 25 or more workers, they can organize easily. Collective agreements are binding, and dismissing union members without just cause puts you at risk of unfair dismissal claims.

Law 2466 of June 2025 strengthens worker protections further, with stricter disciplinary procedures, limits on outsourcing, and higher minimums in some sectors. Fuller enforcement is expected by 2026. It's worth checking in with your EOR regularly, since non-compliance can trigger labor inspections and penalties.