COUNTRY

Written Agreements

In Guatemala, an individual work contract may be verbal when it refers to agricultural or livestock work, domestic service, temporary or incidental work not exceeding 60 days whose value does not exceed GTQ 100 (Guatemalan quetzales). In all other cases, the contract of employment must be in writing and must contain information on identity of parties, duration of agreement, working hours, salary and benefits, nature of work ,etc.

Oral Agreements

Per the Labor Code of Guatemala, an individual work contract may be verbal when it refers to agricultural or livestock work, domestic service, temporary or incidental work not exceeding 60 days. Oral contracts may also be used to serve as agreements for specific jobs with the value that does not exceed GTQ 100 (Guatemalan quetzales).

In the case of an oral contract, at the time of recruitment, the employer must present the employee with a card or form stating the start date of employment and the salary. At the end of each pay period, the employer must also give the employee a card indicating the number of days worked and the work completed.

Implied Agreements

The Labor Code of Guatemala does not offer provisions on implied contracts. It mandates the use of written contracts, except in case of certain temporary contracts not exceeding 60 days where verbal contracts can be used.

Per the labor law, regular working hours are 8 per day and 44 per week (the standard workweek is six days). In case of mixed work day (day and night work), working hours cannot exceed 7 hours per day and 42 hours per week. In case of night work, working hours cannot exceed 6 hours a day or 36 hours a week.

The total working hours, including overtime, may not exceed 12 hours daily. Employees who work beyond the standard working hours are entitled to overtime pay at 150% of the regular hourly rate. Work performed beyond the limits provided by the contract between the parties is also considered overtime work and must be remunerated as such.

• New Year’s Day - January 1
• Holy Thursday, Friday, and Saturday
• Labor Day - May 1
• Mother’s Day - May 10 (private companies)
• Army Day - June 30
• Independence Day - September 15
• Revolution Day - October 20
• All Saints Day - November 1
• Christmas Eve - December 24 (half-day, after 12:00 p.m.)
• Christmas Day - December
• New Year’s Eve - December 31 (half-day after 12:00 p.m.)

In Guatemala, the labor law grants an employee 15 consecutive working days of paid annual leave after completion of 12 months of continuous service with the same employer. The employee must have worked at least 150 days in the year of service to be entitled to leave. Annual leave pay must be issued to the employee before the start of the leave.

Workers must enjoy their vacation period without interruptions and are only obliged to divide them into 2 parts at most. Leave days are not cumulative from year to year. Employees cannot apply unused leave to the following year. However, at the termination of the contract employees can claim compensation in cash for leave that has been omitted in the last 5 years.

Guatemala's labor law stipulates that an employment contract is suspended during an employee's sickness. Workers are entitled to paid sick leave for up to 6 months, provided that the insured employee has at least 4 months of contributions in the 6 months before the sickness begins. The benefits are provided by the Guatemalan Social Security Institute (Instituto Guatemalteco de Seguridad Social) from the fourth day of the temporary suspension of work. Two-thirds of a worker's average earnings is paid as a sickness benefit up to a maximum of 180 days (the benefit may be extended for 39 weeks). The maximum combined benefit for multiple periods of incapacity is 52 weeks in a 24-month period. The Guatemalan Social Security Institute also sets a maximum monthly benefit.

Under the Labor Code of Guatemala, pregnant female employees are entitled to a maximum of 12 weeks (84 days) of maternity leave, including 30 days of prenatal leave and 54 days of postnatal leave.

An employee is entitled to receive her full salary while on maternity leave from the Guatemalan Institute of Social Security, provided she has paid contributions for 4 months in the 6 months preceding the prenatal leave and she is not engaged in any other paid work during the period of leave. If an employee is not registered with the Social Security Institute, the employer pays the full salary.

The Labor Code of Guatemala provides 2 days of fully paid paternity leave for the birth of a child. No qualifying conditions are stipulated regarding the entitlement to paternity leave.

Minimum Wage

The minimum wages in Guatemala, effective from January 1, 2024, are as follows (all values in Guatemalan quetzales, GTQ):

Non-Agricultural Economic Sector

Daily: GTQ 122.40; Monthly: GTQ 3,723.05; Incentive Bonus: GTQ 250; Total Salary: GTQ 3,973.05

Agricultural

Daily: GTQ 118.14; Monthly: GTQ 3,593.55; Incentive Bonus: GTQ 250; Total Salary: GTQ 3,843.55

Exporter andMaquila

Daily: GTQ 107.79; Monthly: GTQ 3,278.59; Incentive Bonus: GTQ 250; Total Salary: GTQ 3,528.59

Guatemala's employment law does not mandate a specific payroll cycle. However, it requires employment contracts to specify whether the pay frequency is monthly, bi-weekly, or daily.

Overtime, Holiday & Vacation Pay

An employee who works beyond the standard working hours (8 hours a day and 44 a week) is entitled to overtime pay at 150% of the regular hourly rate.

Hours of work on a weekly rest day and public holiday are considered overtime work and are compensated at a premium rate of 150% of the regular hourly wage rate, which is the total amount of the ordinary and extraordinary payments of the last week or the last 15 or 30 days, depending on whether wages are paid by biweekly or monthly. The law does not require employers to provide a compensatory rest day to employees who work on weekly rest days or public holidays.

Payment for annual leave must be issued to employees prior to its commencement.

Notice Period

In Guatemala, the length of a statutory notice period for termination of an indefinite contract is based on the employee's duration of service.

• 1-week notice for service under 6 months
• 10 days' notice for more than 6 but less than 12 months of service
• 2 weeks' notice for more than 1 year but less than 5 years of service
• 1-month notice for 5 or more years of service

The notice period listed above applies to workers who wish to terminate a contract for an indefinite period without just cause once the trial period has elapsed. These notice periods are not binding on employers and are superseded by a notice period stipulated in an employment contract. If an employer has to terminate an employee due to just cause or misconduct, a written dismissal notice must be provided to the employee before termination.

Severance Benefits

The Labor Code stipulates that an employee dismissed for just cause is not entitled to severance pay. The employer has the burden of proving that the dismissal was justified. Employees dismissed without cause or indirectly are entitled to severance pay equal to 1 month of salary per year of service. Severance must be paid proportionally when the employee works for a part of a year. Employees are not eligible for a severance payment if dismissed during a probationary period.

Pension

In Guatemala, the Social Security Institute (Instituto Guatemalteco de Seguridad Social) administers pensions and social benefits to employees of firms with at least three workers, individuals employed in freight or passenger transport enterprises with at least one worker, and public-sector employees not covered by a specialized system.

The retirement age is 60 years. Employees who reached retirement age and have paid at least 240 contributions are entitled to old age pension. Those with less than 240 contributions but with at least 12 contributions are entitled to old-age settlement benefit as a lump sum.

There is a Economic Contribution Program for the Elderly, where the government pays social pension to those who have turned 65 years old, have low income or disability and no other pension. The pension is paid as GTQ 400 per month. This scheme is funded through contributions from high income individuals and companies.

Dependents/Survivors Benefits

A widow or disabled widower entitled to a survivors pension will receive 50% of the old-age or disability pension the deceased received or was entitled to receive. The minimum monthly widow(er)'s pension is GTQ 170 (Guatemalan quetzales).

Each eligible child younger than age 18 (no age limit if disabled) will receive 25% of the old-age or disability pension the deceased received or was entitled to receive; 50% if both parents are deceased. The minimum monthly orphan's pension is GTQ 85; GTQ 170 if parents are deceased.

A dependent parent will receive 25% of the old-age or disability pension the deceased received or was entitled to receive. The minimum monthly dependent parent's retirement is GTQ 85. The minimum combined monthly survivor pension is GTQ 340.

The maximum combined survivors pension is 100% of the old-age or disability pension the deceased received or was entitled to receive.

Invalidity Benefits

In Guatemala, the social insurance system provides benefits for disabled workers, whether their injury is occupational or non-occupational. To be eligible for benefits, the insured must have contributed for at least 36 months in the last 6 years immediately before disability. There are 2 types of disabilities recognized for benefits, depending on the degree of disability:

• Total disability - If the insured is unable to obtain a remuneration greater than 33% of what is usually received in the same region by a healthy worker, with similar capacity, category and professional training.
• Severe disability - If the insured is unable to obtain remuneration and permanently need the help of another person to perform the acts of ordinary life.

The disability pension is initially granted for 1 year and continued depending on annual evaluation. The disability pension is not payable abroad. It ceases at the regular retirement age and is replaced by an old-age pension. It also ends if the pensioner recovers the ability to work.

Benefits are also provided for work-related and non-work-related accidents or occupational diseases. For cash benefits, the insured must have at least 3 months of contributions before the work injury or occupational disease began. For medical benefits, there is no minimum qualifying period if the insured is in covered employment; unemployed persons must have at least 3 months of contributions in the last 6 months before the work injury or occupational disease began.