Salary Reduction or Part-Time Schedule?


By: Dr. Nelson María Toro, Attorney (Universidad Católica de Colombia), specialist in Labor and Social Security Law, Master's in Business Administration

This article was published in September 2020 and refers to the labor measures of the COVID-19 emergency in force at that time. It is kept as a historical reference.

Given the difficult conditions a large number of business owners in various economic sectors are experiencing, who today have not been able to reopen at full capacity and have a considerable workforce, but who also cannot carry out their activity through remote work or work from home, having had their premises closed for more than 5 months by orders from the National and District Governments, and after having adopted the various measures introduced by the Ministry of Labor, such as unpaid leave and advance vacations, among others, there is one measure that has made it possible to preserve jobs, which is ultimately the goal of all these measures: the reduction of the working day.

Mistakenly, most people and workers refer to this as a salary reduction, and have interpreted that with such a reduction in hours, the minimum one must receive as salary is the legal monthly minimum wage. That is, if I earn a monthly salary of $1,000,000 for working the full day, and it is reduced, I cannot earn less than one minimum wage (SMMLV), because otherwise the worker's rights would be violated. However, this is a mistaken interpretation, for the following reason:

Under Article 161 of the Substantive Labor Code, this arrangement is normally used in cases where companies have seen their activities decline for various reasons. In this particular case, as noted in the previous paragraph, a large number of companies are operating at 30% of capacity and their income has likewise been affected. To protect jobs, some companies have chosen to reduce the working week from 48 hours to 24 hours. Interpreting the two points above correctly, on the one hand, payment must be made for the time actually worked, which in this case is 24 hours and not 48. So it is clear that there is no salary reduction: the salary base remains the same, but one cannot expect payment as if it were a full-time schedule. And second, under the third paragraph of Art. 147 of the Substantive Labor Code, for people who earn the minimum wage and work shorter schedules, payment is made in proportion to the number of hours worked.

However, it is worth clarifying that the contribution base for paying social security contributions cannot be less than one SMMLV. It is important to clarify that under no circumstances can the working day be reduced to fewer hours than half-time, that is, 24 hours, on pain of an administrative investigation by the Ministry of Labor, which could lead to financial penalties.

Let us not forget that in the months before the pandemic, the national government had been discussing the advisability of implementing hourly work... we will be attentive to developments on this matter.

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