Fines for Keeping Foreign Workers without Work Permits Increase

Recently, amendments to the Labor Code were made, through Law No. 237 of 2021. Such amends include (1) increasing the fines for employers who maintain foreign workers without work permits, (2) adding articles to Cabinet Decree 249, (3) provisions regarding the payment of the Occupational Safety, Health and Hygiene at Work Fund Fee, for construction workers.

Law No. 237 modifies numeral 3 of article 20 of the Labor Code, increasing fines to up to US$15,000.00 the third time an employer is sanctioned for maintaining foreign workers without a work permit, not considering the number of foreign workers in this condition. Furthermore, the Ministry of Labor and Labor Development will request the Ministry of Commerce and Industries the temporary suspension of the operating permit of the companies or commercial establishments that are repeat offenders in hiring foreign personnel without the corresponding permits.

This norm also adds articles 44-A and 44-B to Cabinet Decree 249 of 1970, which creates the coercive jurisdiction of the Ministry of Labor and Labor Development, in order to enforce the collection of obligations in its favor, regarding the payment of services, permits, fines, damages caused, or any other credit or obligation. Nevertheless, the Ministry will issue a procedure manual and a regulation regarding this coercive collection process.

Furthermore, the norm establishes the basis for the determination of the payment of the Occupational Safety, Health and Hygiene at Work Fund Fee for construction workers and the possibility of suspending the execution of the works due to its non-payment.

You may access a copy of the Law at the following link.

If you are interested in learning more about the previously mentioned amendments, you may contact Gabriela Vásquez López, Labour specialist, at: gvasquez@gala.com.pa