Impact of the 2026 Minimum Wage Increase on Service Premiums
The upcoming increase in the minimum wage for 2026 by 23.7% has significant implications for millions of workers in Colombia. This adjustment, combined with the gradual application of the Labor Reform under Law 2466 of 2025, will influence how service premiums are calculated and distributed. Over ten million workers are set to see a notable rise in their service premiums due to these changes.
Current Service Premium Calculation
The service premium in Colombia is calculated using the formula: (salary × days worked) / 360. Employers are required to pay this premium in two installments: the first, by June 30, and the second, in the first 20 days of December. This mandatory benefit is outlined in Article 306 of the Substantive Labor Code (CST), which applies to all workers linked by an employment contract.
Changes Introduced by the Labor Reform
The Labor Reform introduces essential modifications regarding salary surcharges for overtime, Sunday, and night work. Workers whose salaries are influenced by these surcharges may experience an increase in their overall earnings and, subsequently, a heightened service premium. As explained by Laura Pérez, a labor law specialist, the specific impact will depend on individual circumstances and the frequency of these payments.
A practical illustration: a worker earning $2,500,000 who worked full-time over the six months would be entitled to a bonus of $1,250,000. If their salary remained unchanged throughout this period, the last month’s salary will define the settlement base.
Understanding Salary Fluctuations
Pérez clarifies that when there are salary changes throughout the semester, the average salary accrued during that time should be calculated to provide a more accurate settlement. This standard practice ensures that the settlement base reflects the actual remuneration received by the employee.
Inclusions in the Premium Settlement
Transportation assistance is also considered when determining the service premium for eligible workers earning up to two minimum wages. Legal advisor Gloria Ávila emphasizes that all dependent workers are entitled to this premium, reflecting their time worked during the semester.
Legal Aspects Surrounding Payment Timing
It is crucial for employers to adhere to payment deadlines when it comes to the service premium. Failure to do so may lead to legal repercussions. Laura Pérez noted that delays in payment can result in potential claims from workers and administrative actions from the Ministry of Labor.
Additionally, Article 128 of the CST allows for extralegal bonuses, which are not mandatory and depend on the employer’s discretion or agreements with employees. Such bonuses differ from the legal service premium, which is universally applicable to all qualifying employees.
With the looming increase in the minimum wage and the transformative effects of the Labor Reform, a significant rise in service premiums awaits many workers in Colombia. Understanding these changes helps ensure compliance and maximizes the benefits for employees.