Subsidies for companies that generate formal jobs: learn about the amount of benefits and how to apply

The Ministry of Labor, in the search to promote formal employment, created the program of subsidies for companies that formalize their workers. The program aims to reduce the unemployment rate, which in June 2023 showed a decrease of 1.9%, according to the National Administrative Department of Statistics (DANE), which represented a rate of 9.3% nationwide.

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With the program of subsidies for companies, the idea of the National Government is that Micro, Small and Medium Enterprises (MSMEs) have an incentive for each new formal employment they generate.

According to the Minister of Labor, Gloria Inés Ramírez, employers will receive a certain amount for each formal job created. If they are jobs for young people between 18 and 28 years old, the SMEs will receive a 25% subsidy to the payroll. For each job for female heads of household, the subsidy will be 15%. And for each first employment contract for people over 28 years of age, the Colombian government will grant an incentive of 10% to the employer.

To date, the National Government has invested a capital of 674 billion pesos and has benefited 26 thousand companies with the creation of 819,000 jobs, since the call opened on March 15 of this year.

Likewise, and as a support for Colombian entrepreneurs, the entity is looking for ways to reduce the cost of trademark registration so that Colombian entrepreneurs can have easier access and advance in the formalization of companies.

"Dentro del PND, impulsamos el fomento para el sostenimiento y generación de nuevos empleos. Hoy a cerca de 26 mil empleadores, en un 90% Mypimes, les hemos girado 676 mil millones en fomentos por generar nuevos empleos" ministra del Trabajo @GloriaRamirezRi pic.twitter.com/zEgFfFzA0X

— MinTrabajo (@MintrabajoCol) August 10, 2023

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Requirements to apply for subsidies for companies

Employers interested in accessing the subsidies for companies should keep in mind that this is the last date of the year to participate in the incentives.

For this, only employers who have not received this benefit on 12 occasions can participate in the call for applications, which will be open between September 14 and 21.

In addition, employers must comply with the following requirements:

1. The company must have its workers formally linked and the number of workers must coincide with the number of workers registered in the Integrated Contribution Payment Plan (Planilla Integrada de Liquidación de Aportes – PILA) system as of March 2021.

2. Have a deposit product in a financial entity.

3. Be up to date with the payment of salaries and contributions to the social protection system for all workers.

These are the documents to apply to the subsidies for companies

The National Government, together with the Ministry of Labor, requires the following documents for employers who wish to apply for the subsidies for companies.

a. Application form completed and signed by the legal representative. If the applicant company is in the process of restructuring or liquidation, the form must be filled out by the natural person employer, promoter or liquidator,

b. The company must certify that the employees on which it will receive the contribution received the salary of the previous month and are up to date in the payment of social security contributions.

Likewise, it must certify if employer substitution or employer substitution processes have been carried out after March 2021.

The certification must be signed by the natural person employer, or legal representative and the tax auditor or public accountant.

c. Copy of the Single Tax Registry (RUT) issued within the six months prior to the application.

Where should you file your application for the subsidies for companies?

Applications for subsidies for companies can be submitted to the financial entity with which the company has a deposit account under the supervision of the Superintendencia Financiera de Colombia, or to the savings cooperative with which the company has a credit account under the supervision of the Superintendencia de la Economía Solidaria.

Informality in Colombia

The situation of informality in Colombia is alarming. According to DANE, in February 2023, informality in Colombia was 58%, which means that six out of ten workers did not have a labor contract that guaranteed their affiliation to the social security system.

Under these conditions, these workers face a future of great obstacles, in which the idea of obtaining an old-age pension is increasingly distant. According to the National University of Colombia, the high level of informality in the country represents several disadvantages for workers, among which not only low salaries and labor instability stand out, but also the absence of benefits and basic labor rights such as vacations, recreation, professional risks and other salary components such as transportation allowance, bonuses and worker’s compensation, among others.

Find more information about subsidies for companies in this link.

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