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March 17, 2023
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How much would costs rise for a company with the labor reform

How much would costs rise for a company with the labor reform

This Thursday, March 16, the labor reform project of President Gustavo Petro was officially filed, which, although it had several spaces for discussion at the salary and labor agreement table, between unions, workers and the government, it still generates concerns especially among businessmen and industrialists in the country.

(Labor reform would increase unemployment, according to Fenalco).

For companies, the higher night and Sunday surcharges for workers, as well as indefinite-term contracts, among other aspects defined in the document, which will be analyzed by the Congress of the Republic, they will carry additional costs that could be as much as 20 percent.

The National Federation of Merchants and Entrepreneurs (Fenalco) calculates that if the labor reform is approved as proposedcompanies in the country could assume costs of between 12 and 17 percent, and in some cases they could rise up to 20 percent.

“This project does not go in the direction of solving the problem of the millions of unemployed and informal workers that the country has, but rather it is directed towards better conditions for the minority of Colombians who today enjoy being in the labor force and those who are unionized”, said the union’s president, Jaime Alberto Cabal.

(Labor reform: this is how permanent and indefinite contracts would work).

For employers, this reform would not only increase payroll expenses, but would not solve two of the major problems facing the labor market: unemployment and informality.

On the contrary, according to a survey carried out by merchants, 55 percent of businessmen would make adjustments related to the reduction of payrolls and the reduction of personnel, while 27 percent would avoid hiring new employees as much as possible and 71 percent it would discard, reduce or decrease its investments, due to the increase in expenses.

“We recognize the coordination work carried out by the Ministry of Labor. Even so, these changes will affect the cost structure of the companies”, warned, for her part, Rosmery Quintero, president of the Colombian Association of Micro, Small and Medium Enterprises (Acopi).

(Rappi’s position regarding the new labor reform).

The bill, which will now have to go through Congress, proposes that Colombians work 42 hours a week (today there are 48 and in July it would go to 47) that can be distributed, by mutual agreement, between employer and worker, in 5 or 6 days a week.

Besides, the night shift would not start at 9 pm, but at 6 pm, and work on Sundays or holidays would now be paid with a surcharge of 100 percent (today it is 75 percent).

Likewise, it talks about paternity leave going from 2 to 12 weeks by 2025 and agreeing on flexible working hours to harmonize family life for people with minor children, people with disabilities, illnesses or older adults.

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