Labor Reform: Government proposes incentives for companies with generational and gender diversity

The initiative seeks to revitalize the labor market and encourage the generation of employment, as well as to promote generational and gender diversity in the business environment.

Within the framework of the Legal Commission for Women’s Equity, held on August 23, the Ministry of Labor announced that the labor reform seeks to recognize a percentage of the current legal minimum wage to companies that hire minorities. These percentages vary depending on the group to which the employees belong.

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Here we explain all about the incentives for companies seeking to grant this employment generation program.

All about the employment generation program and incentives for companies

The Minister of Labor, Gloria Inés Ramírez, assured that the labor reform contemplates a job creation program that recognizes a percentage incentive to employers who hire young people, women heads of household and disabled people.

This was stated by Ramírez in his Twitter account: “The employment generation program recognizes 25% of the SMLV to companies that hire young people, 15% for women heads of household and 10% for the elderly. The #ReformaLaboral recognizes the population with disabilities and victims of violence”.

"Programa de generación de empleo reconoce el 25% del SMLV a empresas que contratan jóvenes, 15% por mujeres cabeza de hogar y 10% por personas mayores. La #ReformaLaboral reconoce a la población con discapacidad y a víctimas de violencia" ministra del Trabajo @GloriaRamirezRi. pic.twitter.com/sGa5z2tkpa

— MinTrabajo (@MintrabajoCol) August 23, 2023

Thus, for each young person between 18 and 28 years of age hired by a company, 25% of one SMLV would be recognized; for each female head of household 15%, and for each person over 28 years of age, regardless of whether male or female, 10% of the current legal minimum wage would be recognized.

The labor reform bill also seeks to include Colombians with disabilities and victims of the armed conflict in this program. However, the percentage of the incentives for companies that would be applied in this particular case was not clarified.

Incentive program for employment generation: combating the gender gap.

As part of the Legal Commission for Women’s Equity, the Minister also highlighted the creation of special incentives for the protection and generation of employment for Colombian women.

Ramírez assured that, by 2024, incentives are proposed for companies to recognize between 25% and 30% of the payroll of young women and women with disabilities, as well as between 15% and 20% for women over 28 years of age.

These strategies seek to contribute to reduce the gender gap in the labor market that persists in Colombia. According to recent DANE studies, the female labor force continues to be at a disadvantage with respect to the male labor force.

By 2022, the unemployment rate for women will reach the worrying figure of 12.6%, 4.8 percentage points higher than the male rate of 7.8%. That year, women in the labor market totaled 9.7 million in Colombia. The figures also show that in the last quarter of 2022, there was an increase in the employed population in Colombia. In the case of women, the increase was 544 thousand.

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Other strategies of the employment generation program and incentives for companies

Minister Ramírez also spoke of the creation of other initiatives contemplated in the labor reform, which seek to promote equity in the Colombian labor force. Among them, she highlighted the Estado Joven program and the Elite Team.

The first is an initiative that promotes labor practices in the public sector, whose beneficiaries would receive a minimum legal salary during the 5 months of labor practice.

The Elite Team, on the other hand, would be focused on the creation of labor opportunities and policies for employees who are members of the LGBTIQ community.

What is the labor reform about?

The labor reform bill, one of the National Government’s flagships, collapsed in the last legislature, due to the lack of consensus in the legislature. In July, it was filed for the second time in the Congress of the Republic.

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