Decree 583 of April 8, 2016 - Regulations on labor outsourcing  

By Decree 1072 of 2015, the Ministry of Labor issued a Single Regulatory Decree of the Labor Sector in order to compile existing labor and employment regulations currently in force in Colombia.

Decree 583 of 2016 established Chapter 2 regarding "the inspection, supervision and control over labor outsourcing," which must be added to Decree 1072 of 2015.

Illegal outsourcing

This new Decree regulated and defined certain aspects of labor outsourcing in Colombia, such as independent contractor, simple intermediary, employees in mission, beneficiary and provider, permanent missionary activity, and labor outsourcing, which are essential for any activity of outsourcing executed by a Colombian company.

Among the important and noteworthy aspects of this Decree, the Ministry of Labor identified the elements that allow the verification of the existence of illegal outsourcing in Colombia.  This was accomplished with the definitions outlined in the Decree, and by reinstating that third party providers (either services or personnel) may not affect constitutional, legal rights and fringe benefits currently in force in Colombia.

Pursuant to the foregoing, this Decree mentions the constitutional principle of the primacy of reality over the formalities agreed between the parties, by imposing a duty to the Ministry of Labor of warning, if in their investigation on illegal outsourcing coexist the elements of an employment relationship.

Sanctions

Fines for illegal outsourcing are variable and may be up to 5,000 minimum statutory monthly wage. For this purpose, the Decree established nine indicatives, among others, that the Ministry of Labor will use as guidance when imposing the fines.   

Likewise, the Decree establishes the items that may be considered for an eventual reduction of fines, establishing a criteria according to which the amount of the fine should be calculated in proportion to the percentage of employees affected, that the beneficiary of the service (subject to the sanction) engages in in direct form, through contracts that meet the constitutional principle of stability in employment.  The percentage may not exceed 20% of its value per each year of continuous direct employment, and exemption of up to 100% of the fine, after the fifth year of continuous engagement, with the possibility of initiating the process or formalization of the employment relationship. 

This Decree uses concepts, rights and legal definitions, and adapts them to the context of labor intermediation, in order to preserve the rights of employees, promoting guarantees and employment stability.