In Panama, employees are granted the right to paid annual leave as per the labor laws.

Accumulation of Vacation Time

For every eleven days of work, employees accumulate one day of paid vacation. Once an employee has been with the same employer for a full year, they are entitled to 30 calendar days of paid vacation leave.

Usage of Vacation Leave

It is compulsory for employees to take their accumulated vacation leave. The labor law in Panama does not allow for employees to be compensated with payment in lieu of taking the vacation time. Employers are required to pay for an employee's vacation at least three days prior to the start of the vacation period.

Factors to Consider

The labor law in Panama allows employers to split vacation time into two equal periods, but only if there is an agreement to this effect in a collective bargaining agreement. If employment is terminated, employers are obligated to compensate employees for any unused, accumulated vacation days.

Panama celebrates a variety of public holidays that encompass national commemorations, religious observances, and historical events.

National Holidays

• January 1: New Year's Day
• January 9: Martyrs' Day
• Carnival Monday and Tuesday: The festive days preceding Ash Wednesday.
• Good Friday: Friday before Easter Sunday.
• May 1: Labor Day.
• November 3: Separation from Colombia Day.
• November 4: Flag Day (celebrated on this date in public offices, schools, etc.).
• November 5: Colon Day (significant in the province of Colon).
• November 10: First Cry for Independence from Spain.
• November 28: Independence from Spain Day.
• December 8: Mother's Day.
• December 25: Christmas Day.

Important Notes

• Carnival Festivities: Carnival is a significant holiday period in Panama, with celebrations occurring in the days leading up to Ash Wednesday.
• Variable Dates: The dates of Carnival, Ash Wednesday, and Good Friday change each year as they depend on the religious calendar.

In Panama, the Labor Code establishes a framework for different types of leave that employees are entitled to.

Mandatory Leave

Panamanian law mandates the following types of leave:

• Annual Leave (Vacation):
  • Accrual: Employees earn one day of paid vacation for every eleven days worked.
  • Entitlement: After a full year of continuous employment, the entitlement is 30 calendar days of paid vacation.
• Maternity Leave:
  • Duration: 14 weeks total – six weeks before the expected childbirth date, and eight weeks after.
  • Compensation: Paid by the Panamanian Social Security system, provided the employee meets contribution requirements. If contributions are insufficient, the employer bears financial responsibility for any shortfall.
• Sick Leave:
  • Certification: Requires a medical certificate.
  • Employer Responsibility: The first three days of sick leave are the employer's responsibility.
  • Social Security: From the fourth day onward, compensation comes from the Panamanian social security system.

Other Leave Types

• Paternity Leave: Fathers are entitled to three days of paid paternity leave.
• Bereavement Leave: Employees may receive paid leave in case of death within the immediate family, though the exact duration varies depending on the family member and individual company policy.
• Study Leave: Employers can grant paid or unpaid leave for employees who pursue further education with approval.

Important Considerations

• Unused Leave: Upon termination, employees must receive compensation for any unused, accrued vacation leave.