Guatemala
Knowledge Base
Frequently asked question, important data and information on EOR.
General information
3416 GTQ per month
Labor Law
Laws that regulate Labor Relationship
Guatemala’s Labor code
Onboarding guide
- Contract requirements
- Types of contracts
- Probation Period
- Offer letter
- Digital signature
- Onboarding documents
Requirements for a labor contract
• Full name, age, sex, marital status, nationality and municipal residence of the parties.
• The date on which the labor relationship commenced.
• There should be a specific description of the services or the work to be executed.
• The place where the services or work are to be carried out.
• The employee’s address, if hired to work outside of the place where the employee usually resides.
• The employment contract’s duration, or an indication that it is for either an indefinite period or for a fixed term for specific work.
• The working hours and schedule of work
• The remuneration and its method of calculation (by time unit, by work unit or other point of reference), and the form, period and place of payment.
• Other legal terms and conditions agreed to by the parties.
• The place and date where and when the employment contract is signed.
• The parties’ signatures (or a fingerprint, if they cannot sign), and their legal identification numbers (for Guatemalan nationals, this is their national identification number, and for foreign nationals, this is their passport number).
Pre-hire Medical exam
Not mandatory
Types of contracts
• Indefinite
• Fix term
• Contract for Project or defined work
Art. 25 Labor Code (CT)
Probation Period
The probation period is the first 2 months for contracts of indefinite duration, according to the Labor Code.
Are offer letters mandatory in the country?
Mandatory
Are digital signatures in labor contracts valid?
Permitted
Mandatory onboarding documents
• ID card (DPI) – both sides in color
• Taxpayer ID (NIT)
• Social security documents (IGSS and IRTRA cards) (if available)
• Income tax ticket of the current year
Statutory benefits
Annual Bonus
It is mandatory. Each bonus is equivalent to one month’s salary; paid at mid-year and year-end.
Additional bonus
An incentive for productivity and efficiency bonus of GTQ 250 is paid to all workers in the private sector of the country, regardless the activity in which they work. It must be paid to the employees together with the monthly salary.
Leaves (medical, maternity, paternity, etc.)
• Maternity leave: 30 days off before delivery and 54 days off after delivery with the right to full pay.
• Adoption leave: When adopting a child, 54 paid days.
• Sick leave: 6 months, provided that the insured worker has made contributions for 3 months during the 6 months before the sick leave begins. Two-thirds of a worker’s average income are paid as sickness benefit, up to a maximum of 180 days; It can be extended to 39 weeks. The combined maximum benefit for several periods of disability is 52 weeks in a 24-month period. The maximum benefit is GTQ 2,400. §28 & 31 of Decree no. 295, National Profile of the ISSA.
• Marriage leave: 5 paid days
• Bereavement leave: in case of death of spouse, or parent or child, three (3) days.
Annual Leave (days per year)
15 consecutive days per year after completing 12 months of continuous employment. The employee must have worked at least 150 days in the last year to be entitled to the leave.
How do vacation days expire?
In the event of termination of the contract before vacation, the employee is entitled to proportional vacation compensation if there is a termination before the completion of one year of service.
Official Holidays
• 1 Jan, New Year’s Day
• 6 Apr, Maundy Thursday
• 7 Apr, Good Friday
• 8 Apr, Easter Saturday
• 1 May, Labour Day
• 3 Jul, Army Day Holiday
• 15 Sep, Independence Day
• 20 Oct, Revolution Day
• 1 Nov, All Saints’ Day
• 25 Dec, Christmas Day
Working on holidays and Sundays
Paid at 50% extra on top of the regular wage.
Number of Working hours
8 hours a day, 44 hours a week.
•Day Shift: 6:00 am – 6:00 pm
•Night Shift: 6:00 pm – 6:00 am. 6 hours a day, not exceeding 36 hours per week.
•Mixed Shift: 7.5 hours a day, 45 hours a week. Night hours must be less than four hours at night.
Overtime
Paid at 50% extra on top of the regular wage. Overtime is permitted up to 4 hours per day.
Social Security (what does it cover)
• Health services area
• Pension Services Area
• I.V.S. (Disability – Old Age – Survivorship)
• E.M.A. (Sickness – Maternity – Accidents)
Payroll
Salary payment currency
Quetzal (GTQ)
Can salary be paid in a different currency other than the local currency?
Yes, legislation currently allows the salary to be agreed in other currencies
Payment frequency
Monthly, Bi-weekly, daily, hourly
VAT percentage
12% all other taxable goods and services, including imports.
Income Tax
Residents and non-residents are taxed at progressive income tax rates ranging from 5% to 7% For more information see https://taxsummaries.pwc.com/guatemala/individual/taxes-on-personal-income
Tax Payer Identification Number
Taxpayer Identification Number – NIT (Número de Identificación Tributaria)
Offboarding
Voluntary resignation
If the employee decides to voluntarily leave the company for reasons beyond the employer’s control. This does not entitle the employee to indemnification, but it does entitle him/her to the payment of outstanding benefits and salaries.
Contract termination
Article 76, employment contracts are terminated when one or both parties to the labor relationship terminate it, effectively ceasing it, either by:
• By mutual agreement between the parties
• For just cause attributable to the employee, in which case the employer shall not pay severance indemnification to the employee
• For cause attributable to the employer, in which case the employer must pay severance indemnity to the employee
• Without just cause or dismissal, in which case the employer must also pay severance indemnification.
• By resignation of the employee, in which case the employer does not have to pay severance indemnity to the employee
Justified Dismissal
Article 77. The following just causes that entitle the employer to terminate the employment termination of the employment contract, without liability on his part:
• When the worker conducts himself during his work in an openly immoral manner or resorts to slander, calumny, or any other means against his employer or his representatives in the management of the work
• When the employee commits any of the acts listed in the preceding paragraph against a co-worker, during the time the work is being performed, provided that as a consequence discipline is seriously disturbed or the work is interrupted
• When the worker, outside the place where the work is being performed and during working hours, resorts to slander, libel, or acts of violence against his employer or against his representatives in the management of the work, provided that such acts have not been provoked and that, as a consequence thereof, the coexistence and harmony for the performance of the work is made impossible
• When the employee commits a crime or offense against property to the detriment of the employer, any of his fellow workers, or to the detriment of a third party within the establishment; likewise, when he intentionally causes, through carelessness or negligence, material damage to machines, tools, raw materials, products, and other objects immediately or undoubtedly related to the work
• When the employee reveals the secrets referred to in Article 63, paragraph (g)
• When the employee fails to attend work without the employer’s permission or a justified cause, for two complete and consecutive working days or six half working days in the same calendar month. The justification for the non-attendance must be made at the time of resuming work if it has not been done before
• When the worker manifestly refuses to adopt the preventive measures or to follow the procedures indicated to avoid accidents or illnesses; or when the worker refuses, in the same manner, to abide by the rules or instructions that the employer or his representatives in the management of the work indicate to obtain the greatest efficiency and performance in the work
• When he violates any of the prohibitions of Article 64, or the duly approved Internal Labor Regulations after the employer warns him once in writing. The warning shall not be necessary in the case of drunkenness when, as a consequence thereof, the life or safety of the persons or property of the employer is endangered
• When the employee, upon entering into the contract, has induced the employer into error, pretending to have qualities, conditions, or knowledge that he does not possess, or presenting references or personal attestations whose falsity is later proven by the employer, or performing his work in a manner that demonstrates his incapacity to perform the work for which he has been hired
• When the worker suffers the penalty of major arrest or is imposed correctional imprisonment by an executed sentence
• When the employee incurs any other serious breach of the obligations imposed by the contract
It is understood that whenever the dismissal is based on a fact that is also punished by criminal law, the employer’s right to file the corresponding actions before the common criminal authorities shall remain unaffected.
Unjustified Dismissal
Any employee who is dismissed for an unjustified cause is entitled to compensation for damages, equivalent to one month’s salary for each full year of service. If the service is less than one year, a proportional amount. In addition, the proportional amount of productivity bonus, Christmas bonus and vacation days must be paid.
The severance payment corresponds to:
• Proportional salary for the current month
• Proportional amount of the statutory Bonuses
• Proportional amount of unused vacations
Compensation for unjustified dismissals:
• One month’s salary for each full year of service. If the service is less than one year, a proportional amount.
Minimum Notice Period
The party that terminates the employment contract must give an advance notice to the other party, the extent of which depends on the length of the employment, as follows:
Length of Employment Minimum Advance Notice
• Before 6 months 7 days
• More than 6 months to 12 months 10 days
• More than 1 year to 5 years 14 days
• More than 5 years 1 month
Immigration
Visa process
Requests for work visa procedures must be processed at the Dirección General de Empleo.
1. The candidate gathers all the required documents and sends them to us.
2. We apply for the work permit.
3. After having the work permit, the applicant will obtain a temporary residence visa.
Visa documents
•Complete authenticated photocopy of the valid passport of the Applicant
•Authenticated photocopy of the Immigration Status (temporary residence visa or permanent, or proof of initiation of proceedings before the General Directorate of Migration)
•Accounting certification issued by an authorized Accountant, stating the number Authenticated photocopy of the labor contract
•A Sworn statement or legalized document signed, stating that the applicant speaks, understands, reads, and writes in Spanish (For applicants from a country whose official language is not Spanish)