Hiring in Colombia in 2026: The labor reform, the costs, and how to hire legally
This article is a submission by Booth, a Certified B Corp managed outsourcing and talent solutions provider with talent hubs in the Philippines and Colombia. Booth offers EOR, managed outsourcing, AI-augmented operations, and workspace solutions to 150+ companies across 120+ countries.
Planning a team in Colombia? Here’s how to budget for the new labor rules, choose the right way to hire, and build a team that stays.
To hire in Colombia in 2026, you need your own Colombian entity or a compliant employer of record (EOR). Indefinite-term contracts are the norm for ongoing roles, and schedules must fit a 42-hour week.
Budget about 38% to 52% on top of base salary for social security contributions and mandatory benefits.
Colombia keeps landing on North American shortlists, and it’s easy to see why.
It shares working hours with the US all year, its BPO and KPO sector employs close to 790,000 people, and its two biggest talent hubs, Bogotá and Medellín, score above the global average for English.
Hiring rules changed in 2026, though. This guide walks you through what Colombia’s labor reform means for your budget, how to hire legally with or without a local entity, and what an employee really costs once benefits are added.
It also covers when a managed team makes more sense than hiring, and how to build a Colombian team that stays. Figures are as of October 2026.
Why are companies hiring in Colombia in 2026?
Your working day overlaps theirs
Colombia is on UTC-5 all year, so it matches US Eastern from November to mid-March and US Central the rest of the year.
Live customer service, team meetings, and coaching all happen during normal hours on both sides.
A deep bench of experienced professionals
Colombia’s BPO and KPO sector had 789,687 direct jobs as of December 2025, and 60% of its exports went to the US, according to industry association BPrO, as reported by Valora Analitik.
Outsource Accelerator’s buyer’s guide to nearshoring in Colombia covers which functions suit a nearshore team.
Suselle Mueller, Colombia Country Manager at Booth, sees demand growing for technology, operations, and AI and automation roles. She describes Colombian professionals as combining “adaptability, communication, and ownership.”
A 2025 study by MinTIC and Fedesoft points the same way. It puts the current shortfall at about 85,000 digital professionals, with AI, data, cloud, and cybersecurity among the most in-demand profiles.
English is strongest in the big hubs
Colombia ranks 76th on the 2025 EF English Proficiency Index, with a score of 480 against a global average of 488.
Medellín (516) and Bogotá (513) score above it, which makes them good places to start your search. Test English against the actual role either way.
A look at the competitive edge of Colombia’s bilingual professionals goes deeper.
Wages are rising, so plan for them
Colombia’s 2026 minimum wage is COP 1,750,905 a month, up 23%. Employees earning up to two minimum wages also get a COP 249,095 monthly transport allowance.
The increase is being challenged before Colombia’s Council of State. It was suspended in February 2026 and reinstated in July, and it stays in force pending a final ruling, with the amount unchanged throughout (Portafolio).
Mueller’s advice is to “treat Colombia as a strategic investment, not a cost decision.”
What did Colombia’s labor reform change?
Law 2466 of 2025 took effect on June 25, 2025, and most of its changes phase in through July 2027.
It makes evening and weekend work more expensive, makes indefinite-term contracts the default, and formalizes the disciplinary process.
The 42-hour week comes from an earlier law, Law 2101 of 2021, and has applied since July 15, 2026, with no cut to monthly pay.
| Change | Before | Rule now | Effective |
|---|---|---|---|
| Maximum workweek | 44 hours | 42 hours, same monthly pay | July 15, 2026 (Law 2101 of 2021) |
| Night work | Started at 9 p.m. | 7 p.m. to 6 a.m., at a 35% premium | December 25, 2025 |
| Sunday and holiday surcharge | 75% | 80%, then 90% (in force now), then 100% | July 1 of 2025, 2026, and 2027 |
| Contract type | No overall limit on fixed-term renewals | Indefinite-term is the general rule. Fixed-term contracts must be in writing and can’t exceed 4 years, including renewals | June 25, 2025 |
| SENA apprentices | Learning contract at 50% to 75% of minimum wage | Employment contract at 75% of minimum wage in training and 100% in the practical stage | Contracts from June 25, 2025 |
| Disciplinary process | Less detailed in the Labor Code | Formal notice, written charges, access to all evidence, at least 5 days to respond, a reasoned decision, a proportional sanction, and a right to appeal | Work rules due by June 25, 2026 |
| Paid leave | Narrower list | Adds urgent medical appointments, school obligations, and judicial or administrative summons | June 25, 2025 |
Sources: Law 2466 of 2025, Ogletree Deakins, Littler, Sabentis, and Bloomberg Línea.
Every hour now costs a little more
The same monthly pay now covers 42 hours instead of 44, so each hour costs about 4.8% more. Overtime and surcharges are calculated on that higher hourly rate.
Management and trust roles are exempt from the hours cap and overtime, but they’re still owed night and Sunday or holiday surcharges.
If you classify an individual contributor as management, you can owe back pay for overtime.
Evening and Sunday coverage needs a second look
Work after 7 p.m. Bogotá time now carries the 35% night premium. From November to mid-March, that’s 7 p.m. US Eastern. The rest of the year, it’s 8 p.m. Eastern.
A Sunday or holiday hour costs 190% of the ordinary rate today and 200% from July 2027.
Colombia has 18 public holidays in 2026, and 11 fall on Mondays, so build holiday coverage and its cost into your annual plan.
Four things to check before your next payroll run
- Map every shift against the 42-hour cap and the 7 p.m. line, and price in Sunday and holiday coverage.
- Move ongoing roles to indefinite-term contracts, and keep fixed-term contracts in writing and within the 4-year limit.
- Update your internal work rules (reglamento interno de trabajo) for the new disciplinary process. The deadline was June 25, 2026, so if yours isn’t updated yet, do it now.
- Check your SENA apprentice quota. Paying instead of hiring a required apprentice now costs 1.5 times the minimum wage per month.
How do you hire in Colombia legally?
Foreign companies have three main routes into Colombia. You can employ people through your own local entity, employ them through an employer of record, or work with a managed services partner that employs and runs the team for you.
Independent contractors fit only work that’s truly independent.
If you’re still deciding whether to hire or outsource, Outsource Accelerator’s guide to what IT and BPO buyers should know about outsourcing to Colombia lays out the options.
| Option | How it works | Best for | Watch for |
|---|---|---|---|
| Colombian entity | You register a Colombian company and employ people directly | Companies ready to run their own HR, payroll, and compliance in Colombia | Setup time, and you own local compliance, payroll, and administration |
| Employer of record | A local provider is the legal employer, and you direct the work | Teams of any size that want to hire without setting up an entity | Arrangements that amount to illegal labor intermediation can create shared liability for the client |
| Managed services | A provider employs and runs the team and delivers against the targets you set | Functions you want delivered without managing people day to day, especially across several shifts | Agree on KPIs, reporting, and who leads the team day to day |
| Independent contractor | A civil contract for defined deliverables | Project work with real autonomy | Setting hours and supervising daily can make it employment, with back benefits owed |
An EOR lets you hire without your own entity. Colombian law has no specific category for it, so the provider you choose matters.
Decree 581 of June 2026 gave labor inspectors clear warning signs for illegal outsourcing and intermediation, and a client can share liability when those signs show up.
The main ones are a provider without a real operation of its own, such as offices, equipment, or the financial capacity to run the team, and a client that takes on the employer’s role, such as handling discipline or setting employment terms.
So look for a provider with its own operation in Colombia, meaning offices, equipment, HR, and people support on the ground.
It should also run compliant payroll and benefits and be able to explain how its model fits the rules.
Outsource Accelerator’s employer of record glossary covers how the model works.
Choose the employer before you write the job post
- Decide who employs and runs the team (your own entity, an EOR, or a managed services partner) before you post a role.
- Set pay in Colombian pesos, and add the transport allowance for salaries up to two minimum wages.
- Recruit in Bogotá and Medellín, and test English and job skills for every role.
- Use a written, indefinite-term contract for ongoing roles. Probation can last up to 2 months and must be agreed upon in writing. For a fixed-term contract under a year, it can’t exceed one-fifth of the term.
- Register the employee with an occupational risk insurer (ARL) before day one, and enroll them with a health provider (EPS), a pension fund, and a family compensation fund from the start of employment.
- Pay contributions monthly through PILA, and report electronic payroll to the tax authority, DIAN.
- Keep schedules under 42 hours, and put a written digital disconnection policy in place. Law 2191 of 2022 gives employees the right to disconnect outside working hours, with exceptions for management and trust roles and genuine emergencies.
What does an employee really cost in Colombia?
For an office employee earning less than 10 minimum wages, social security contributions and mandatory benefits add about 38% on top of base salary.
At 10 or more minimum wages, it’s about 52%, because the health, SENA, and ICBF exemptions for income-tax-filing employers no longer apply.
| Cost item | Rate (% of salary) | Note |
|---|---|---|
| Pension | 12% | Employer share |
| Health | 0% or 8.5% | 8.5% only for employees earning 10 or more minimum wages |
| Occupational risk (ARL) | 0.522% to 6.96% | Office work is in the lowest class |
| Family compensation fund | 4% | Always applies |
| SENA and ICBF | 0% or 5% | 5% only for employees earning 10 or more minimum wages |
| Severance savings (cesantías) | 8.33% | One month’s salary a year |
| Interest on severance | 1% | 12% a year on the cesantías balance |
| Service bonus (prima) | 8.33% | One month a year, paid in June and December |
| Vacation | 4.17% | 15 working days a year |
Totals use the lowest risk class. For employees earning up to two minimum wages, the transport allowance is added to the base for prima and cesantías.
Employees on an integral salary (13 or more minimum wages) follow different rules. Sources: PwC Worldwide Tax Summaries and G-P Globalpedia.
Add night, overtime, and Sunday premiums where they apply, along with recruiting, equipment, and management time, and you’ll have a realistic budget.
When does a managed team make more sense than hiring?
Everything above assumes you’ll employ the team, either directly or through an EOR, and manage it yourself.
A managed services provider takes on both jobs. It recruits, trains, schedules, and manages the team, handles quality and performance, and delivers against targets you set.
The reform makes that option worth a closer look. Night premiums, rising Sunday surcharges, the 42-hour cap, and the new disciplinary process all add work for whoever schedules and manages the team.
A managed provider takes that work on, and the people can still work as an extension of your own team.
Decree 581 matters here too. A provider that runs the operation with its own team leads, offices, and processes fits the way the decree expects outsourcing to work.
A provider that only supplies people while you direct them like employees carries more risk for both sides.
A managed team tends to fit best when:
- You need coverage across several shifts or every day of the week.
- Headcount needs to grow within weeks or months.
- Nobody on your side has time to run the operation day to day.
Before you sign, ask any provider how it schedules around the 7 p.m. night line and Sunday surcharges, which KPIs it reports and how often, and who leads the team on the ground in Colombia.
How do you build a Colombian team that stays?
Relationships come first. As Cultural Atlas puts it, “Personal relationships play a large role in Colombian business culture.” In practice, that looks like this:
Make time to talk. Hold regular video one-on-ones, and leave room for conversation that isn’t about the work.
Raise problems in private. Group calls are a poor place to surface problems. Ask “What’s blocking you this week?” one-on-one, and give people a clear channel to flag risks.
Show people where they can grow. Write down what a promotion takes, and review progress every quarter.
Gallup’s State of the Global Workplace 2026 report found that only 30% of employees in Latin America and the Caribbean are engaged at work. A visible next step goes a long way toward keeping good people.
Plan around the calendar. Agree early on coverage for the December holidays and next year’s long weekends, now that holiday work carries a 90% surcharge.
Respect time off. Your disconnection policy should say when people are expected to be available and what counts as an emergency.
Hiring in Colombia: A team worth planning for
Colombia rewards companies that plan for the full picture, from the new rules to the true cost of a hire. The people side matters just as much.
Suselle Mueller learned that while building a team in Colombia. “It starts with purpose and opportunity,” she says.
“Retention comes from strong leadership, clear development pathways, and a culture that balances support with challenge.” Whether you hire the team yourself or work with a provider, that’s what turns a Colombian team into an extension of your own.
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