IMPACT – MEDIUM
What is the change? Panama has increased fines for companies that hire workers without approved work permits.
What does the change mean? In addition to increased fines, companies that are repeat offenders risk cancelation of their operating license, loss of labor privileges and publication of their name on the Labor Ministry’s website.
Background: Amendments to the Labor Code were published Sept. 12 in the Official Gazette and took effect Sept. 15. The amendments increase fines and penalties for employing a worker without an approved work permit as follows:
Fines will be imposed within eight days.
BAL Analysis: Companies should be aware of the increased risks of employing workers without proper work authorization. Companies using visas under the Specific Countries program, Professionals program and Italy-Panama Convention should pay particular attention to the increased risks and are reminded that foreign nationals must obtain approval of residence before filing of the work permit, which can entail a wait of four to five months.
This alert has been provided by the BAL Global Practice group and our network provider located in Panama. For additional information, please contact your BAL attorney.
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