The Government established the Minimum Legal Wage for 2021* in COP 908.526 per month (Approx. USD 259,92)** This implies a 3.5% increase over the Minimum Legal Wage for 2020.
Implications
-The Minimum Integral Salary as of January 1st, 2021 is COP $11.810.838 (USD $ Approx. 3.379) per month.
The employees earning up to two (2) Minimum Legal Wages per month (COP $1.817.052 – $520 USD Approx.) and have been working for the Company for over three months, are entitled to receive work clothing and footwear provision. Employers shall comply with this obligation every four months, providing such work clothing and footwear to their employees on April 30th, August 31st and December 20th, each year.
-The employees earning up to two (2) Minimum Legal Wages per month (COP $1.817.052 – USD $520 Approx.) are entitled to receive a Legal Transportation Allowance, which for 2021 is equivalent to COP $106.454 (USD $30,45 Approx.) per month. This is also an increase of 3.5%. The value of this Allowance is not considered a part of the employee’s salary; hence, it shall not be taken into account when calculating the payroll fees nor the social security contributions. Nevertheless, the Legal Transportation Allowance must be taken into account for calculating the fringe benefits, as per legal man.
-The employees earning up to two (2) Minimum Legal Wages per month (COP $1.817.052 – USD $520 Approx.) are entitled to receive a Legal Transportation Allowance, which for 2021 is equivalent to COP $106.454 (USD $30,45 Approx.) per month. This is also an increase of 3.5%. The value of this Allowance is not considered a part of the employee’s salary; hence, it shall not be taken into account when calculating the payroll fees nor the social security contributions. Nevertheless, the Legal Transportation Allowance must be taken into account for calculating the fringe benefits, as per legal mandate.
–The employees earning a salary equivalent to four (4) Minimum Legal Wages (COP $3.634.104 – USD $1.039,68 Approx.) or more, shall make a contribution of 1% from their contribution base to the Solidarity Pension Fund. In addition, employees having social contribution bases equivalent to sixteen (16) Minimum Legal Wages (COP $14.536.416 – USD $4.158,74 Approx.) or more, shall contribute in an additional percentage to the Solidarity Pension Fund as indicated below:
*Decree 1785 of December 29th, 2020
**Exchange rate for 29/12
Authors:
Enrique Álvarez I [email protected] I Labor law
Rafael Abuchaibe I rabuachaibe@lloredacamacho.com I Labor law
