Social Protection Floor for persons earning less than one SMLMV

Under this decree, employers will not have the obligation to affiliate and make payments to the General Social Security System - SGSS (Health, Pension, Compensation Fund, Parafiscales and Labor Risks) to those workers with a part-time dedication who earn monthly income of less than 1 smlmv. Likewise, independent contractors will not have this obligation either, but they will be obliged to join and pay a contribution for the PPS, according to the following indications:

a. Registration: Employers and contractors must register with the administrator of the Complementary Social Service of Periodic Economic Benefits - BEPS.

b. Contributions: The contribution for the PPS shall be made in the following manner:

1. Mandatory employees: The contribution shall be made monthly by the employer or contractor as appropriate and may be made at any time during the month in which the activity is carried out, through the channels that the administrator of the mechanism provides for that purpose. The amount shall correspond to fifteen percent (15%) of the monthly income obtained in the period for which such contribution is made. This contribution shall be additional to the agreed amount to be paid for the development of the activity and may not be deducted from the latter.

Voluntary members: Those voluntarily linked to the PPS shall be responsible for making the contribution of fifteen percent (15%) of their monthly income, after deducting expenses and costs when applicable in accordance with the provisions of Article 107 of the Tax Statute.

In addition, the PPS member may make additional contributions at his/her own expense in the BEPS individual savings account. Such contribution shall have the same minimum and maximum ceiling as defined.

c. At the time the first contribution is made, the BEPS administrator shall create an Individual Savings Account for each person who is affiliated to the Subsidized Regime of the General Social Security Health System - SGSSS.

d. Distribution of contributions. The fifteen percent (15%) contribution shall be distributed as follows: Fourteen (14) points shall be credited to the individual savings account of the member and the remaining point shall be destined to the payment of the Inclusive Insurance premium.

e. The persons covered by this chapter, who are affiliated to the SGSSS in the contributory system or to a special system, as beneficiaries, shall maintain their affiliation to the health system in that condition and shall be obligatorily or voluntarily linked, as the case may be, to the PPS.

f. Limits of the contribution to the PPS. The value of the maximum annual contribution to the PPS may not exceed the value established by the Intersectoral Commission on Pensions and Periodic Economic Benefits. The value of the minimum contribution shall be defined by agreement of the Board of Directors of the Administrator of the Periodic Economic Benefits. In no case may the savings in the BEPS mechanism be less than the established minimum ceiling.

g. The Administrator of the mechanism shall inform the competent authority of the cases of related parties that, according to the contributions they receive or make, have income to belong to the SGSS in the Contributive Regime and the cases of employers or contractors and related parties that exceed the maximum ceilings established for the PPS. Likewise, it shall report the cases in which it evidences that, within the same calendar month, contributions were made to the PPS and contributions to the SGSS in the Contributive Regime and shall adopt the pertinent measures on the individual accounts to prevent the occurrence of such simultaneity.

h. Control by the UGPP: In the exercise of its powers, the UGPP will carry out the control:

1. Preferentially to employers who have workers affiliated to the SGSS in the contributory regime and who with the purpose of taking advantage of the reduction of their social security contributions from one fiscal year to the next, improve the economic conditions of such workers through the implementation of artificial acts or businesses or any other irregularity against the SGSS.

2. To contractors affiliated to the SGSS in its contributory component and who with the purpose of reducing their social security contributions carry out acts or artificial businesses or any other irregularity against the SGSS.

3. To contractors or voluntary related parties who are simultaneously saving to the PPS and contributing to the SGSS in the Contributory Regime or who have income to belong to the SGSS.

i. The Ministry of Labor shall carry out the inspection, surveillance, and control of compliance with labor regulations and other social provisions.

j. The saver, once the requirements are met and the savings period in the BEPS mechanism has ended, will have the right to choose whether to receive the life annuity together with the 20% incentive on the value saved or the return of the value saved, in which case there will be no payment of the periodic incentive.

k. The decree indicates that in no case does the enrollment of the employee in the PPS exonerate the employer from the payment of social benefits (service bonus, allowance, severance pay, interest on severance pay) and other obligations arising from the employment relationship, such as vacations, transportation allowance, among others, nor does it exonerate the employer from complying with other obligations inherent to the nature of the contract.

i. On the other hand, it gives the option to employers who have personnel working part-time and who receive a monthly income of less than 1 smlmv, who in principle have the obligation to link them to the Social Protection Floor, to affiliate them and contribute monthly to the SGSS in its contributory component by paying the total contribution, for at least 1 smlmv, which will exonerate them from the obligation to link to the PPS.

Finally, these provisions will be mandatory as of February 1, 2021.