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The key points of the labor reform proposed by Fedesarrollo

The key points of the labor reform proposed by Fedesarrollo

The economic studies center Fedesarrollo presented a new chapter of its series of documents ‘What to do in public policies?’, a set of recommendations around 16 economic issues that the entity launched last week. On this occasion, the document focuses on a diagnosis and proposals to improve the functioning of the labor market in Colombia.

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The bases of the proposal are in reform contributions to social security in health, pension, and also in reforming the contributions to compensation funds to introduce progressive contribution rates.

Despite the good figures for economic growth in 2021 and the first quarter of this 2022, the unemployment rate continues at 12% and the informality rate at 63%, which highlights the enormous problems that afflict millions of Colombians who, unfortunately, cannot find a quality job”, affirmed the executive director of Fedesarrollo, Luis Fernando Mejía.

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In the case of health contributions, which are currently at 4% of the salary in the case of employees and 12.5% ​​in the self-employed, the entity proposes be progressive, starting at 0% for monthly income equal to or less than $1,000,000, and gradually increasing up to 9% for employed persons with income of $25,000,000 or more. A proposal that, according to Fedesarrollo, would have no fiscal impact.

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Regarding contributions to pensions, Fedesarrollo proposes to eliminate “the restriction of a contribution base income equivalent to a monthly minimum wage to allow contributions for part-time work in which the employed have incomes below a minimum wage”.

(See: Is trade unionism revitalized in the world?).


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