Managing employee leave entitlements in Panama requires a clear understanding of the country's labor laws. These regulations define the minimum rights and obligations for both employers and employees regarding time off, including annual vacation, public holidays, sick leave, and various forms of parental leave. Adhering to these legal requirements is crucial for compliance and maintaining positive employee relations within the Panamanian workforce.
Panama's labor code provides a framework for different types of leave, ensuring employees receive adequate rest, time for personal matters, and support during significant life events. Employers must ensure their internal policies meet or exceed these statutory minimums to operate legally and effectively in the country.
Annual Vacation Leave
Employees in Panama are entitled to paid annual vacation leave. The minimum entitlement is based on the length of service with the employer.
- Accrual: Employees accrue one day of paid vacation for every eleven continuous days of work.
- Minimum Entitlement: This accrual rate results in a minimum of 30 days of paid vacation per year (calculated as 30 days for every 11 months of work, or approximately 2.5 days per month).
- Timing: Vacation must be granted within 11 months following the date the employee becomes entitled to it.
- Payment: Vacation pay must be calculated based on the employee's average ordinary and extraordinary salary earned during the last 11 months of service. Payment must be made at least three days before the employee starts their vacation.
- Splitting: Vacation can be taken in one continuous period or split into parts, provided one period is at least two weeks long.
| Entitlement Type | Accrual Rate | Minimum Annual Leave | Payment Basis |
|---|---|---|---|
| Paid Annual Vacation | 1 day per 11 continuous days | 30 days per year | Average salary of last 11 months |
Public Holidays
Panama observes several national public holidays throughout the year. Employees are generally entitled to a paid day off on these holidays. If an employee is required to work on a public holiday, they are typically entitled to premium pay.
Here are the anticipated public holidays for 2025:
| Date | Holiday |
|---|---|
| January 1 | New Year's Day |
| January 9 | Martyrs' Day |
| March 4 | Carnival Tuesday (Movable) |
| April 18 | Good Friday (Movable) |
| May 1 | Labor Day |
| November 3 | Separation Day from Colombia |
| November 4 | Flag Day |
| November 5 | Colon Day |
| November 10 | First Call of Independence (Los Santos) |
| November 28 | Independence from Spain |
| December 8 | Mother's Day |
| December 25 | Christmas Day |
Note: Some holidays falling on a Sunday may be observed on the following Monday.
Sick Leave Policies and Pay
Employees in Panama are entitled to paid sick leave in case of illness or injury that prevents them from working.
- Entitlement: Employees are entitled to paid sick leave upon presentation of a medical certificate issued by a doctor from the Social Security Fund (Caja de Seguro Social - CSS) or a private doctor.
- Duration and Pay:
- For the first two days of absence due to illness, the employer is responsible for paying 100% of the employee's salary.
- From the third day onwards, the Social Security Fund (CSS) is generally responsible for paying a percentage of the employee's salary, provided the employee is registered and contributions are up to date. The CSS payment rate is typically 75% of the employee's average salary over the last six months, up to a certain maximum.
- Requirements: A valid medical certificate specifying the duration of the illness is mandatory for sick leave to be considered justified and paid.
| Leave Type | Duration | Payer | Payment Rate | Requirements |
|---|---|---|---|---|
| Sick Leave | First 2 days | Employer | 100% of salary | Medical certificate |
| Sick Leave | From 3rd day onwards (if eligible) | CSS | 75% of average salary (up to a maximum) | Medical certificate |
Parental Leave
Panama's labor law provides specific entitlements for maternity, paternity, and adoption leave.
Maternity Leave
- Duration: Pregnant employees are entitled to 14 weeks (98 days) of paid maternity leave. This leave is typically taken six weeks before the expected delivery date and eight weeks after the birth.
- Payment: Maternity leave is paid by the Social Security Fund (CSS), provided the employee meets the contribution requirements. The payment is generally 100% of the employee's average salary over the last six months, up to a certain maximum.
- Protection: Pregnant employees and new mothers are protected against dismissal during pregnancy and for up to one year after returning from maternity leave, except for specific justified causes authorized by the labor authorities.
Paternity Leave
- Duration: Fathers are entitled to three days of paid paternity leave upon the birth of their child.
- Timing: This leave must be taken consecutively immediately following the birth.
- Payment: Paternity leave is paid by the employer.
Adoption Leave
- Duration: Employees who adopt a child under the age of five are entitled to 14 weeks (98 days) of paid leave.
- Timing: This leave starts from the date the child is legally entrusted to the adopting parent(s).
- Payment: Adoption leave is paid by the Social Security Fund (CSS) under similar conditions as maternity leave.
| Leave Type | Duration | Payer | Payment Rate |
|---|---|---|---|
| Maternity Leave | 14 weeks | CSS | 100% of average salary (up to a maximum) |
| Paternity Leave | 3 days | Employer | 100% of salary |
| Adoption Leave | 14 weeks | CSS | 100% of average salary (up to a maximum) |
Other Types of Leave
Panamanian labor law also recognizes other types of leave, although entitlements and specifics may vary or be subject to collective bargaining agreements or company policy beyond the statutory minimums.
- Bereavement Leave: While not explicitly defined with a mandatory minimum duration in the general labor code for all cases, some collective agreements or company policies grant paid leave for the death of immediate family members.
- Study Leave: The labor code mentions the possibility of leave for educational purposes, particularly for union leaders, but there is no general statutory entitlement to paid study leave for all employees. This is often subject to employer discretion or specific agreements.
- Marriage Leave: There is no statutory requirement for paid leave upon marriage in the general labor code.
- Union Leave: Employees who are union representatives may be entitled to paid leave to attend union activities, as stipulated in the labor code and collective bargaining agreements.
Specific entitlements for these "other" types of leave often depend on the industry, the size of the company, and whether a collective bargaining agreement is in place. Employers should consult the specific regulations applicable to their sector and any relevant agreements.
