If you employ a housekeeper, avoid having to pay fines: deadline to pay June premium

In Colombia, all subordinate workers and domestic employees are entitled to the payment of the June and December premium. This payment corresponds to the service premium, a social benefit that by law must be paid within the terms determined by the Substantive Labor Code.

If payment is not made on the established dates, employers will be obliged to pay the penalties established by law, which could represent very high costs.

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The June premium is the amount corresponding to the payment of 15 days of salary if the employee rendered services during the entire six-month period. In the event that the employee did not work from January 1 to June 30, the payment of the premium must be proportional to the time worked.

How to calculate the June premium?

The service premium, established in Article 306 of the Substantive Labor Code, is equivalent to 30 days of salary per year, the amount that will be paid in two dates: In the first semester, employers must pay the June premium, which is equivalent to 15 days of salary, until the 30th of this month.

At the end of the year, the maximum term to pay the December premium is December 20, when employers must pay the amount equivalent to the remaining 15 days of salary.

“The employer is obligated to pay to its employee or employees, the social benefit called service premium that will correspond to 30 days of salary per year, which will be recognized in two payments, as follows: half no later than June 30 and the other half no later than the first twenty days of December. Its recognition will be made for the entire semester worked or proportionally to the time worked”, establishes article 306 of the Substantive Labor Code.

The paragraph of this article states that all persons who perform domestic work such as drivers, housemaids, and farm workers must receive this benefit under the terms established by law.

In order to comply with the law, employers must pay the amount of the June premium according to the following formula:

Value of monthly salary * days of work in the semester / 360.

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Payment of the premium for workers earning up to 2 minimum wages

If the value of the monthly salary is equal to or less than 2 minimum wages, the premium must be calculated with the monthly salary + transportation allowance.

The following is an example to calculate the premium for an employee whose salary is the minimum wage in 2023:

$1.160.000 (278,14 USD) + $140.606 (33,71 USD) * 180 / 360 = 650.303 (155,93 USD)

Thus, the June premium payment for an employee earning a minimum wage will be $650,303 (155,93 USD).

If the employee has a variable salary, this is how the bonus should be calculated

For employees with a variable salary, i.e., in addition to a fixed salary, the salary includes payment for working overtime, Sundays, or holidays, as well as sales commissions, the calculation of the June premium and the year-end premium must replace the value of the monthly salary with the average value.

According to the above, the first thing the employer has to do is to calculate the average value of the salary with the following formula:

(fixed salary + overtime + commissions + sales percentages) / number of days worked in the semester * 30 = average salary value.

Then, the average salary value in the semester must be multiplied by the number of days worked in the same period and divided by 360:

Average salary value * number of days worked / 360 = variable salary premium.

Penalties for not paying the premium

If a dependent or domestic worker does not receive this social benefit or the value of the June and year-end bonuses that he/she received does not correspond to the amount established by law, he/she may file a complaint with the Ministry of Labor.

The denunciation may result in important sanctions for the employer, who will be obliged to pay the premium plus the corresponding fines:

• The Ministry of Labor may impose fines, sanctions, and other measures as established by articles 485 and 486 of the Substantive Labor Code.
• Non-payment of the premium is sufficient reason for the employee to resign, which could result in the corresponding payment of the indemnity.
• When the contract terminates and the worker has not received the premium, there is room for the collection of the moratorium premium, corresponding to “a sum equal to the last daily salary for each day of delay” (Article 65 of the Substantive Labor Code).

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