What is a Verbal Labor Contract in Colombia?
A verbal labor contract in Colombia is an agreement between an employer and employee established through spoken words, without a signed written document. Many people don't know that this type of contract is perfectly valid under certain conditions.
The Código Sustantivo del Trabajo (CST), or Colombian Labor Code, in Article 37, establishes that an employment contract can be made in writing or verbally. However, there are clear limits you must know to avoid legal problems.
Legal Requirements for Verbal Contracts in Colombia
For a verbal labor contract to be valid in Colombia, it must meet the following requirements:
- Value of work: The value of the labor cannot exceed two (2) minimum monthly legal wages (SMMLV). For 2024, this represents approximately $2,600,000 Colombian pesos.
- Duration: The work cannot last longer than one month.
- Nature of work: It must be occasional work or work for a specific purpose.
If your employment relationship exceeds these limits, the employer is required to sign a written contract and register it with labor authorities.
When It Is Valid and When It Is Not
A verbal employment contract is valid mainly for temporary domestic work, minor repairs, or short-duration specific tasks. For example, if you hire someone for two weeks to paint an office, the verbal agreement is legally binding.
However, if you will work under an employer's direction and supervision for several months, with a fixed schedule and receiving a monthly salary, you clearly need a written contract. In these cases, the employer must:
- Sign a written contract
- Register the employee with the social security system (Health, Pension, and ARL)
- Pay the corresponding paratransactional contributions
- Issue income and withholding certificates
Remember that even if the contract is verbal, the employee has all labor rights established in the CST, including severance pay, bonuses, and vacation time.
How to Formalize an Existing Verbal Contract
If you currently work under a verbal agreement and want to formalize your employment relationship, here are the recommended steps:
Step 1: Gather Documentation
You will need a copy of the employee's citizenship ID, social security affiliation certificate, and any document that evidences the employment relationship like payment receipts or messages.
Step 2: Define the Conditions
Clearly establish the position, functions, salary, work schedule, and benefits agreed upon verbally.
Step 3: Draft the Contract
The employer should draft a written contract including all agreed conditions. It is recommended that a lawyer review the document to ensure it meets all legal requirements.
Step 4: Register the Employee
The employer must register the employee with the comprehensive social security system within the first ten days of employment.
Step 5: Sign the Contract
Both parties must sign the written contract, keeping a copy each.
Note: The above steps are a general guide. Each worker's specific situation may vary, so it is recommended to contact us to evaluate your particular case.
Common Mistakes to Avoid
Many employers and employees make the mistake of thinking that a verbal contract exempts them from legal obligations. The main mistakes include:
- Believing there is no legal protection: Workers with verbal contracts have the same labor rights as those with written contracts.
- Not paying social security: The employer is required to affiliate the worker with the health, pension, and work risk system, regardless of whether the contract is verbal or written.
- Not withholding for paratransactionals: Contributions to SENA, ICBF, and compensation funds are mandatory.
- Not keeping records: The employer must keep a worker registration book where hires and terminations are recorded.
Frequently Asked Questions About Verbal Contracts
Can I sue for dismissal if I have a verbal contract?
Yes, absolutely. If you have worked under a verbal labor contract and are fired without just cause, you have the right to file a labor complaint with the Ministry of Labor or a labor judge. The employment relationship can be proven through witness testimony, payment receipts, messages, or any other means of evidence that shows the dependency relationship.
The employer must prove that the termination was for just cause; otherwise, they must pay compensation.
What is the time limit for a verbal contract?
The CST establishes that a verbal contract is valid when the duration of work is less than one month. However, this limit may vary depending on the nature of the work and specific circumstances. If work extends beyond one month, the employer must formalize the relationship through a written contract.
In cases where there is continuous renewal of verbal contracts for several months, the labor authority may consider that there is an indefinite-term contract.
What happens if there is no social security payment?
If the employer has not affiliated the worker with the social security system, they are committing a serious violation of the Código Sustantivo del Trabajo. The worker can file a complaint with the Ministry of Labor, and the employer can be significantly fined.
Additionally, the worker has the right to sue for recognition of social security benefits that were not paid, including missing contribution weeks.
Conclusion
The verbal labor contract in Colombia is a valid legal figure under specific conditions. Both employers and employees must know these limits to avoid future legal problems.
Remember that regardless of whether the contract is verbal or written, workers have labor rights protected by the Constitution and the Código Sustantivo del Trabajo. The employer is always required to pay social security, withhold paratransactionals, and comply with all legal benefits.
Formalization through a written contract is always the best option to protect the rights of both parties. If you have doubts about your specific situation, it is essential to consult with a specialized labor lawyer.
Every case is unique. Contact us for a personalized evaluation of your situation.