By January 31 at the latest, employers in Colombia have a term to consign to their workers the interest of the layoffs corresponding to the year 2022.
(Severance interest: when and how is it paid?).
This is provided by numeral 2 of article 1 of law 52 of 1975, which establishes that this interest will be 12% per year of the total value of the layoffs or proportional to the time worked for those who do not complete a full year of work.
Keep in mind that layoffs are a social benefit to which every worker with a labor relationship is entitled, and corresponds to one month’s salary for each year of service provided.
To understand how the payment of these resources works, the Porvenir Pension and Severance Fund clarifies the most frequent doubts:
Severance pay interest must be paid by the employer directly or deposited into the worker’s account and becomes savings to cover the expenses that the month of January brings.
From when can they be paid and what is the maximum term?
By legal mandate, interest on layoffs must be paid no later than January 31 of the year following the claim of layoffs, however, for events in which the employment contract is terminated prior to the end of the year, interest on layoffs must be paid proportionally to the time worked at the time of termination of the employment contract.
How much is this payment?
To find out how much you should be paid in severance interest, the first thing you need to know is the total base or accumulated balance of the severance payments you have.
(Find out how much you will receive in interest on your severance pay).
For example, if the severance pay of a worker who worked throughout the year corresponds to $3,000,000, the value of the severance interest will be $360,000, the result of applying the following formula:
Severance interest = _days worked X 0.12 X Monthly Salary____
360 days
Severance interest = __360 x 0.12 x 3’0000.000____
360
Are Severance Interests consigned to the Severance Fund?
No, these resources are delivered directly to the worker before January 31 of each year, if the entire year was worked or at the time of termination of the employment contract. Unlike severance pay, which must be deposited between January 1 and February 14, to the Severance Fund chosen by the worker, which constitutes savings at times when the worker is unemployed.
Who benefits from severance interest in Colombia?
These interests benefit all people in Colombia who have a labor relationship with fixed-term or indefinite-term contracts, in addition, also domestic employees. According to the most recent labor market indicators provided by DANE (July-September quarter), in Colombia there are 10.7 million workers who have a formal job.
BRIEFCASE
