Unemployment aid and interest on unemployment aid
Unemployment Aid
Who receives Unemployment Aid?
Unemployment Aid is a social benefit to which every worker is entitled, regardless of the type or duration of the employment contract. Domestic service workers, family service drivers, and daily and part-time workers are entitled to Unemployment Aid.
This benefit is regulated in article 249 of the Substantive Labor Code and consists of the payment of one (1) month's salary for each year worked or proportionally in the case of less time worked.
Workers not entitled to receive Unemployment Aid
Unemployment Aid payments shall not be liquidated or consigned to workers whose type of salary is Integral, the value of the Unemployment Aid payment shall be included in the 30% of the benefit factor, this salary shall not be less than 13 legal minimum monthly salaries in force.
When are Unemployment Aid payments paid?
Unemployment Aid must be paid annually in the period from 1 January to 31 December of each year or in proportion to the time worked in this period.
Once this settlement has been made, they must be deposited in the Unemployment Aid fund chosen by the employee, no later than 14 February of the following year. If the employment contract ends before this date, and the payment has not yet been made, the employer must pay the value of the Unemployment Aid payments directly to the worker.
How are Unemployment Aid payments made?
The last monthly salary earned by the worker is taken as the basis for the settlement of Unemployment Aid payments, if there has been no variation in the last three months. Otherwise, the average of the salaries obtained in the last year is calculated.
For the payment of Unemployment Aid, the last monthly salary is taken as the basis by the worker, there has been no variation in the last three months. Otherwise, the average of the salaries obtained in the last obtained in the last year.
When the worker receives payments of a salary nature, these must be included in the calculation of the Unemployment Aid pay settlement:
- Surcharges
- Overtime
- Commissions
- Bonuses and/or salary allowances
| Note: For workers earning up to two SMMLV, remember to include the value of the transport or digital connectivity allowance. |
Interest On Unemployment Aid Payments
Interest On Unemployment Aid Payments is a social benefit in addition to Unemployment Aid payments. It must be recognized and paid by employers to their employees on the accumulated balances of Unemployment Aid.
The employer is obliged to recognize interest equivalent to 12% on the value of the Unemployment Aid pay paid on 31 December of each year worked. This value must be paid no later than 31 January of the following year and directly to the worker, as it is a financial recognition of the employer for the retention of the money during the year.
How is Interest on Unemployment Aid Payments paid?
The following formula should be applied to calculate the Interest On Unemployment Aid Payments:
Penalties for non-payment of Unemployment Aid?
If the employer does not pay the worker the value of the Unemployment Aid due to the termination of the employment contract, he/she will have to pay a penalty of one day's salary for each day of delay, in accordance with article 65 of the substantive labor code.
The employer must deposit the value of the Unemployment Aid payments by the 14th of February of each year following the year caused in the fund that each worker chooses. Failure to comply with this obligation in a timely manner may incur a penalty, as provided for in Article 99 of Law 50 of 1990, which consists of the payment of one (1) day's salary for each day of delay.
Unemployment Aid during the period of the worker's incapacity?
During a period of incapacity, the worker is entitled to be paid Unemployment Aid and interest on Unemployment Aid in full or proportionally, as the case may be, since incapacity is not grounds for suspension of the employment contract.
Incapacity, whether of common or occupational origin, does not affect the calculation of social benefits. These must be calculated on the basis of the last basic salary earned by the worker prior to the start of the period of incapacity.
Garnishment of Unemployment Aid
As a rule, Unemployment Aid payments are not attachable according to Article 344 of the CST, however, there is also an exception in this provision which states that in the case of debts for food and credits in favor of cooperatives, they can be attached up to 50% of their value.
Loss of Unemployment Aid
According to article 250 of the substantive labor code, some conducts cause workers to lose the payment of Unemployment Aid; they are:
- The employee commits criminal acts against the employer or his close relatives or the management of the company.
- The worker intentionally causes serious material damage to buildings, works, machinery and raw materials, instruments and other work-related objects.
- The employee discloses technical or commercial secrets that seriously harm the company.
When the worker commits any of the acts described above, the employer has the right to withhold the unpaid or deposited Unemployment Aid, but to do so, a formal complaint must be filed with the competent authorities and followed by a criminal investigation.
For the loss of severance pay, it is required that there is a conviction by the competent judge in which the criminal liability of the worker is established.
