New fines for Companies that hire expatriates who do not have work permit – August, 2017

On August 2nd, 2017, the National Assembly of the Republic of Panama approved in third debate Law Project No. 475. The Project must now be approved by the President and published in the Official Gazette for it to come into force.

This Law would modify two articles of the Labor Code and would add another one, in relation to companies that hire expatriates not having labor permits and those companies that hire minors outside of the regulations established by labor legislation.

Those companies that hire expatriates who do not have labor permits, or provide false information related to this situation, shall be fined by the Ministry of Labour in the following way:

  • The first time, US$500.00 per expatriate.
  • The second time, US$1,000.00 per expatriate.
  • The third time, a standard fine of US$10,000.00 and the suspension of the Operation Permit of the company.
  • The fourth time, the definite cancelation of the Operation Permit of the company. The company will be obliged to pay the expatriate his or her compensation and benefits established by Law.
  • In case the company has hired ten or more expatriates not having labor permits, the fines shall be doubled. The names of these companies shall be published in the web page of The Ministry of Labour.

It is important to note that The Ministry of Labour may carry out inspections without previous notifications.

Additionally, those companies that hire minors without complying with the regulations established by the Labor Code shall be fined US$700.00 per minor.

For further information, please contact with us.

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