Telework in Panama

It has been approved the new law of Telework in Panama, with the purpose of regulate the employment relationship from the employees that performs their functions outside the offices of the employer, from their home address or from a different place rather than the offices of the employer.
This employee, as the word indicates it, performs in a subordinated way accordingly to the instructions of the company or the employer, who will control and supervise their performance, using the Information and Communications Technology (ICT), meaning the resources, computer tools, applications, networks and programs.

The employees that initiate their employment relationship by Telework must subscribe an employment contract, signed in three (3) originals and registered at the Ministry of Employment and Labor of Panama, as established in the law. Said contract must establish the proper agreement from the employee to work by Telework. Between their declarations, in the contract, between others, the employee must confirm that they have the proper installations to perform their functions by Telework.

If the employment relationship already and it has been requested to be change to telework, the employee can accept or decline this change in their employment relationship. Once the parties agree to change to Telework, an amendment to the employment contract must be subscribed and registered in the Ministry of Employment and Labor of Panama, including the declarations included in the law.

Important elements to consider in this law:

⦁ Telework can be performed partially or complete;
⦁ The extraordinary journeys will be governed based in what is established in the Labor Code;
⦁ It can be reversed; hence, the employer can request the employee to be reincorporated in the office;
⦁ The employee can approve consent to work as a guard, being “on call” for any emergency or situation, outside of their working hours;
⦁ The employee and employer will agree in the expenses that must be covered by the employer in the domicile of the employee, nevertheless, the expenses will not be considered as part of the salary of the employee.
⦁ The employer must assume, if needed, the extra expenses of bandwidth speed or network speed in the residence of the employee, in order for the employee to perform their labor activities.
⦁ The Panama Social Security will cover the professional risk, only if the employee is in the offices of the employer or in their transit from or to the offices of the employer. However, will cover sickness because of the work carried out at the worker’s home or where he performs his duties.
⦁ The Law establishes that the employer is responsible of the health and professional security of the Teleworker.
⦁ The Teleworker will have all the rights and obligations, established in the Labor Code, as an employee.
⦁ Once the employment relationship ends, the Teleworker must return the employer, in the best state, all the technological equipment that was given by the employer to the employee to perform their duties.


Lourdes Bishop


Miguel Urriola


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