Labor compliance: good practices that strengthen the company and facilitate growth

In this interview, Luis Gabriel Arbeláez Marín, director of the Labor Law and Social Security Law area of the firm Muñoz abogados, discusses the issue of labor compliance for companies, also known as Labor Compliance.

According to Arbeláez, “All companies need to have a labor compliance”, an issue that is vital to avoid labor litigation or that the image of the companies is affected by not complying with the labor law.

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Let’s start with the concept: What is Labor Compliance?

Compliance seeks the regulatory compliance of any company or natural person that has personnel under its charge, so that its operations are shielded from the general regulations of Colombia and international regulations.

Specifically, compliance in labor matters is a set of preventive measures or regulatory compliance that we analyze in companies from the point of view of labor compliance.

With this approach we can verify that companies are indeed hiring well and are complying with the regulations of the working period of their workers.

We also check that in their industrial relations they are complying with the regulations at the time of terminating a worker, or when making social security contributions to pensions and health. With this, we know if the company is “shielded”, or not, from eventual lawsuits so that it can continue exercising the object of its business.

To “shield” the company, so that it can continue to carry out its work without legal obstacles, is the raison d’être of compliance.

Labor compliance, specifically, has a particularity and that is that it is transversal to any area. For example, there is labor compliance for the area of hydrocarbons, the mining sector, or any type of economic exercise.

In short, all companies need to have labor compliance.

What are the most relevant points that businessmen must comply with in order to cover their investment in labor matters?

I have to point out that in this country we have a very extensive labor legislation, in which there are as many obligations as duties of employers. For this reason, labor compliance covers the rights of both workers and employers.

For this reason, and given its enormous extension, we must always be up to date on labor legislation. It is important to be attentive to the latest modifications, to keep ourselves updated on the jurisprudence that is coming out, how the concepts that we might have within the companies change and much more.

In addition, labor legislation could undergo major changes, since we are currently on the verge of a pension reform that is already in its second debate, and will surely be approved during this legislature.

Likewise, we are facing a labor reform that started with a lot of strength, but unfortunately -for better or for worse, as each one wants to see it- it was left without study, so it will be presented again.

Therefore, we have to be up to date with labor legislation. This also implies being always ready to have the best wage and benefit rates for our workers.

To this I would like to add that today we no longer talk only about salary, but we also have to talk about non-wage remuneration, work at home, recognitions, and all those benefits that workers value equally or even more than a good salary.

These current times challenge us not to stay in what was before, a simple recommendation, a salary, an end of the year party. Today, there is much more, workers want more.

This must be analyzed by the company so that it can retain human talent, which implies respecting labor rights and maintaining good recruitment. This is the beginning of everything, with a clean, clear, transparent selection process, without cronyism and so on, so that the exercise is really important for the workers.

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What are the benefits that companies receive by having a proper management of their labor relations?

The benefits are enormous. In the first instance, companies will be able to avoid litigation, or lawsuits, so we also avoid lawsuits, because in this country no one is denied a labor lawsuit.

However, if the company is sued, but it has complied with all the regulations, has paid salaries, settlements, contributions and others, it can rest assured that it did things right. A labor lawsuit can be very large and can even bankrupt a company if it is not properly prepared for it.

Secondly, we can be talking about guaranteeing the protection of workers, thus avoiding sanctions from regulatory entities, such as the Ministry of Labor.

Today, the Ministry of Labor monitors compliance with the duties of employers, the Pension and Parafiscal Management Unit (UGPP), Colpensiones and the pension funds.

For this reason, issues such as the real debt and the presumed debt that is reaching the companies arise. This fact motivates me to invite people who face this type of problems to consult us to find out how they can be solved. Sometimes we leave these amounts as they are, as it happens with the Colpensiones requirements, and we do not pay attention to them and they can turn into late payment interest or penalties that end up costing more than the capital that should be paid. And for these situations there is a solution.

In this aspect, the best thing we can do is to comply with the regulations, improving the relationship with our workers and having a good corporate image, because corporate prestige is very important.

For companies that live from contracting with government entities, such as Ecopetrol, they should know that nowadays they require companies to have a well-structured labor compliance, to show that they have well paid social security contributions, that they have the coverage and give their workers the necessary tools to prevent the risks derived from any labor exercise.

Then, if I want to contract with the State, they will check my payroll and they will be able to see that all the collaborators are contracted for the provision of services, that I do not pay social security and that I also invented a new type of salary called “integral salary of three minimum salaries”, which does not exist.

These types of practices can affect the growth of the company. To grow, companies must be leveraged with a good labor relationship, so I could give this advice to all entrepreneurs: entrepreneur, dedicate yourself to produce what you know how to do, that the management of personnel, which is as important as producing because it is the internal customer, the experts in labor compliance can take care of it.

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