On June 24, 2021, the National Government issued Decree 688 of 2021 creating the Aid for the promotion of youth employment (the "Aid"). 

The characteristics of the Aid and the procedures for applying for it are mentioned below:

1. Purpose of the Decree. It creates an economic aid for the promotion of youth employment (the " Aid"), which will be granted to employers who formally hire young people between 18 and 28 years old as from July 2021 and during the remaining months of the year (2021). 

2. To which sectors does it apply? The Aid applies to all sectors or economic activities throughout the country, which hire new employees during 2021 and which appear from the payroll of July and onwards.

3. Amount of the Aid. The Aid is equivalent to 25% of a minimum legal monthly salary in force (SMLMV) and will be caused for each additional young employee hired by an employer during the year 2021 (as long as they are between 18 and 28 years old).
 

The value of the Aid is fixed, regardless of the salary earned by the young employee.

4. Duration. The Aid may only be received in the month of application and up to a maximum of twelve (12) times, not later than December 31, 2022. Consequently, the Aid may only be received during the fiscal years 2021 and 2022.

5. Application Process. Employers must apply to a financial institution where they have a deposit product, with the following documents:

5.1. Application form signed by the legal representative stating the employer's intention to receive the Aid. 

5.2. Certification signed by the legal representative in which the following points are certified: 

• That, the young employees on which the Aid is sought, received a salary in the immediately preceding month.
• When applicable, certify that a processes of employer substitution have been carried out under the terms of Articles 67 and 68 of the Labor Code. The above will be required if such employer substitution occurred after March 2021.
• That, at the time of the application, the social security payments for the month of March 2021 are up to date, for all the employees that the employer had at that date.

6. In case of complying with the above procedure, when the employer hires employees during 2021, he/she will be able to receive the Aid for each additional employee between 18 and 28 years old that the employer has hired.

7. Application deadline. Employers will be able to apply for the Aid from August 2021, when the young employees identified as new or additional ones in the Payroll Sheet for the month of July 2021 will be verified.

8. How to determine the number of "additional young employees" to apply for the Aid? 

8.1. Take as a reference the number of employees for whom the employer has paid contributions for the month of March 2021.

8.2. Count, starting with the payroll of July 2021, the number of additional employees between 18 and 28 years old and for whom contributions are made to the Social Security System with a base contribution income (IBC for its acronym in Spanish) of at least one minimum monthly salary.

9. Additional Rules

9.1. Each employee can only be counted once for receiving the Aid.

9.2. If an employee has more than one employer, the one who applies first will receive the Aid.

9.3. In order to apply for the Aid, it will not be required that it is the first job of the young employees hired.

9.4. This Aid does not exclude the tax benefit of the "first job deduction" stipulated in Law 2010 of 2019. 

9.5. There are no exclusions with respect to the type of employment agreement under which the young employees are hired. 

9.6. An employer may only apply for the Aid when during the month of July or subsequent months of the year 2021 the payroll of the month of March is exceeded with young employees. In other words, to be eligible for the Aid it will be required to: (i) exceed the March payroll; and (ii) that the number of additional employees in addition to the March payroll are between 18 and 28 years old.

9.7. To apply for the Aid in a specific month, the young employee's employment contract must be in force and must have at least 15 days on the month's payroll.