New strategy to generate employment for young people
The president of Colombia issued Decree 688 of 2021 which creates an incentive system for employers and companies to generate employment for young people ages 18 and 28. This legislative initiative seems promising when contemplating the current economic landscape generated by the COVID-19 pandemic in which unemployment has become one of the main social concerns, especially for young people who just entered the labor market.
Decree 688 creates a subsidy accessible to employers who hire additional personnel during 2021 ages 18 to 28. The subsidy equals 25% of a monthly legal minimum wage which will be deposited monthly for each qualifying employee.
The conditions for employers that are seeking to be beneficiaries of this subsidy are:
Proof of their quality as an employer trough the social security payment spreadsheet – “PILA”.
Having an account that accepts deposits with a financial entity that is supervised by the Financial Superintendence or with a credit and savings cooperative that is supervised by the Superintendence of Solidarity Savings.
To determine the “additional” number of workers that qualify to generate the subsidy, the number of employees for which the employer made payments to the social security system during March of 2021, will be used as the initial employee count.
For new businesses, the number of dependent employees will be taken into account.
If you consider that your business could be a potential beneficiary of this initiative, the application can be submitted by delivering the following documents to the financial institution with whom you have a deposit account:
Document, issued by the legal representative of the company, requesting to become a beneficiary.
Document, issued by the legal representative or the individual employer and the statutory auditor or accountant, that certifies:
That the young employees who qualify for the subsidy were paid their salary the month before the application.
That, at the time of application, the payments to the social security system for all employees are up-to-date.
The financial institutions and savings and credit cooperatives will verify all the documents submitted by employers.
If you wish to file an application for the subsidy, BéndiksenLaw can help you in this process.
Contact us for more information.