Colombia: New Rules Target Illegal Intermediation

As a result of Colombia joining the Organization for Economic Co-operation and Development (OECD) and to comply with its rules aimed at ensuring that employers take responsibility for their workers, the Colombian government has tightened certain legislation. The changes were made to prevent illegal intermediation, which occurs when outsourcing companies or third-party providers are not complying with regulations regarding the supply of personnel (e.g. subordination of the contractor’s personnel to the contracting party’s will) and infringe employees’ rights and guarantees.

The Ministry of Labor has issued Resolution 2021, which specifies that the only scenario in which a company can exercise control over third parties’ employees is for temporary employees provided by an authorized temporary services agency.

Companies that infringe these laws risk claims from the outsourcing company’s employees and fines of up to 5,000 monthly minimum wages (which is approximately USD $1,380,193) for “illegal intermediation.”

Several companies have been audited and fines totalling USD $93 million have already been imposed.

Comment

Outsourcing has not been banned outright, and it is possible to hire outsourcing for core and non-core business activities or services. However an outsourcing company can only be engaged to supply a service through workers if it will develop the service with technical, financial, and administrative autonomy. If this is not feasable, the law requires the company to employ the workers directly (rather than through an outsourcing company).

Written by Carolina Camacho of Posse Herrera Ruiz and Roger James of Ogletree Deakins

© 2019 Posse Herrera Ruiz and Ogletree, Deakins, Nash, Smoak and Stewart, P.C.