Background Checks

Background checks are generally allowed in Guatemala, especially for verifying:

• Criminal records
• Identity
• Employment history
• Academic qualifications

Employers must obtain the candidate’s consent before conducting any background checks.

Verification and New Hire Reporting

For foreign employees, employers must verify and document valid work permits and visas.

Employers must notify relevant government agencies, including:

• IGSS for social security enrollment
• Tax authorities (SAT) for income tax registration

Employers are required to maintain accurate records of all employment documentation for inspection by labor authorities.

Onboarding Process & Documentation

Employers must gather the following documents during onboarding:

Collecting Required Documentation

Employers must gather the following documents during onboarding:

• Signed Employment Contract: Must include all mandatory clauses (e.g., job description, salary, working hours).
• Personal Identification: DPI (Documento Personal de Identificación) for Guatemalan nationals or passport and visa/work permit for foreign nationals.
• Tax Identification Number (NIT): Required for payroll and tax reporting.
• Social Security Registration (IGSS): Employees must be registered with the Instituto Guatemalteco de Seguridad Social.
• Bank Account Information: For salary deposits.
• Medical Certificate: Sometimes required, especially for roles involving physical labor or health-sensitive environments

Providing Employee Rights and Obligations

Employers are legally required to inform new hires about:

• Labor Rights: Including minimum wage, working hours, overtime, rest days, and paid leave.
• Social Security Benefits: Coverage under IGSS for health, maternity, and workplace injury.
• Termination Conditions: Grounds for dismissal, notice periods, and severance entitlements.
• Union Rights: Employees have the right to join or form labor unions.
• Anti-Discrimination Protections: Based on gender, ethnicity, religion, disability, etc.

This information is typically included in the employment contract or provided as part of an onboarding handbook

Healthcare

Health coverage for employees in Guatemala is primarily provided through the Guatemalan Social Security Institute (IGSS). Both employers and employees are legally required to contribute a percentage of the employee’s salary to the IGSS fund.

IGSS Coverage Includes:

• Access to public healthcare facilities
• Medical consultations and hospitalization
• Prescription medications
• Maternity care and related services

Coverage is subject to eligibility conditions and availability of services, which can vary by region and facility. While IGSS provides essential healthcare, the public system often faces challenges such as long wait times and limited capacity.

Private Health Insurance Due to these limitations, private health insurance is a highly valued benefit, especially among professionals and in competitive industries. Many employers offer group private health plans that provide:

• Access to private hospitals and clinics
• Shorter wait times
• Broader specialist networks
• More comprehensive coverage options

Employers typically cover a significant portion—or the entirety—of the premium for the employee, with options for dependents available at an additional cost. The cost and scope of coverage vary based on the provider, plan type, and employee demographic.

Retirement

Guatemala’s mandatory retirement system is administered by IGSS, funded through contributions from both employers and employees.

IGSS Pension System:

• Provides a basic retirement income upon reaching the required age and contribution period.
• Eligibility is based on minimum years of contributions and retirement age, as defined by IGSS regulations.

While the IGSS pension offers foundational support, it may not be sufficient for maintaining a desired standard of living post-retirement.

Supplementary Retirement Plans To enhance retirement security, some employers—particularly multinational corporations and large local firms—offer voluntary retirement savings plans, such as:

• Defined contribution plans
• Private pension funds
• Savings accounts with employer matching

These plans are not legally required, but they are increasingly seen as a competitive advantage in attracting and retaining skilled employees. As employee expectations evolve, supplementary retirement benefits are becoming a key component of modern compensation packages.

Social Security

For information about the Social Security Institute of Guatemala, visit the agency website here.

Employment Contract Details

Guatemalan labor law recognizes several types of employment agreements, primarily categorized by their duration. The two most common forms are indefinite-term and fixed-term contracts.

Indefinite-Term Contracts These are the default and most common type of employment agreement. They do not specify an end date and remain in effect until terminated by either party, in accordance with legal procedures or mutual agreement. Indefinite-term contracts offer greater job security and are presumed unless a valid reason exists for a fixed-term arrangement.

Fixed-Term Contracts These contracts specify a clear start and end date. They are legally permitted only under certain conditions, such as:

• Temporary or seasonal work
• Specific projects with defined timelines
• Situations where the nature of the job justifies a limited duration

Guatemalan labor authorities closely scrutinize fixed-term contracts to prevent misuse. If such a contract is used for work that is essentially permanent, it may be reclassified as an indefinite-term contract.

Required elements include:

• Identification of the Parties: Full names, identification numbers (DPI for individuals), and addresses of both the employer and the employee.
• Start Date: The exact date on which the employment relationship begins.
• Job Description: A detailed outline of the employee’s duties, responsibilities, and job title.
• Workplace: The location where the work will be performed. If the role involves travel or multiple locations, this should be clearly stated.
• Working Hours: The daily and weekly work schedule, in compliance with legal limits on working hours and rest periods.
• Compensation: The agreed salary or wage, including payment frequency, currency, and any additional benefits or allowances.
• Contract Duration: Specification of whether the contract is indefinite, fixed-term (with end date), or project-based.
• Place and Date of Signing: The location and date the contract is executed.
• Signatures: Signatures of both the employer (or authorized representative) and the employee.

Employee Probationary Periods

Probation Period

The probation period may last for a maximum of two months.

Visas

Types:

• Tourist Visa: Short stays (≤90 days).
• Business Visa: For extended business activities.
• Work Visa: Requires job offer or contract.
• Investor Visa: For significant financial investments.

Documents: Passport, application form, financial proof, itinerary, and visa-specific documents.

Process: Submit to embassy, attend interview, wait 2–8 weeks.

Extensions: Apply through Dirección General de Migración.

Compliance: Avoid overstays; renew before expiration.

Independent Contractors

Independent contractors (also known as freelancers or service providers) are treated differently from employees under Guatemalan labor law.

Key Characteristics Contractors operate under civil or commercial contracts, not labor contracts. They are not entitled to employee benefits such as:

• Social security (IGSS)
• Paid leave
• Severance pay
• Minimum wage protections

Legal Requirements Contractors must:

• Register with the tax authority (SAT) and obtain a NIT.
• Issue invoices (facturas) for services rendered.
• Handle their own income tax and social security contributions, if applicable.

Misclassification Risks If a contractor is found to be working under conditions similar to an employee (e.g., fixed schedule, subordination, exclusive service), labor authorities may reclassify the relationship as employment, triggering:

• Back payment of benefits
• Fines for the employer
• Legal liability for non-compliance

Paid Time Off

Employees are entitled to 15 working days of paid vacation after completing 12 months of continuous service with the same employer.

• Vacation is accrued annually. Employees must take at least one week of leave per year, and unused days can be carried over for up to two years.
• Vacation pay must be 130% of the employee’s regular salary and must be paid in advance before the leave begins.

Public Holidays

Public holidays that fall on the weekend are usually lost, with the exception of Army Day.

• New Year’s Day
• Holy Thursday
• Holy Friday
• Holy Saturday
• Labor Day
• Army Day
• Independence Day
• Revolution’s Day
• All Saints Day
• Christmas Day

Bereavement

Guatemala does not have statutory bereavement leave. Some employers grant a few days of paid or unpaid leave upon the death of a close family member.

Maternity Leave

Guatemalan labor law provides specific protections and benefits for pregnant employees, ensuring both financial support and job security during maternity.

Duration

• Employees are entitled to 12 weeks (84 days) of paid maternity leave.
• In Case of Miscarriage or Stillbirth: The employee is entitled to 42 days of paid leave.

Timing The leave is typically divided into:

• 6 weeks before the expected delivery date
• 6 weeks after childbirth
• With medical approval, the employee may choose to allocate more time postpartum, as long as the total leave does not exceed 12 weeks.

Payment

• During maternity leave, the employee is entitled to 100% of her regular salary (30 days before and 54 days after childbirth).
• This is generally covered by the Guatemalan Social Security Institute (IGSS) for employees who are registered and have made sufficient contributions.
• In some cases, the employer may be required to supplement the IGSS benefit to ensure full salary coverage, depending on company policy and the employee’s eligibility.

Job Protection

• Employees on maternity leave are protected from dismissal.
• Termination is only permitted for just cause unrelated to pregnancy or maternity leave, and must be authorized by the labor courts.

Paternity Leave

Guatemala does not have statutory paternity leave & parental leave. Some employers, particularly multinational companies or those with collective agreements, may offer theses leaves or flexible arrangements as part of their benefits package.

Parental Leave

Guatemala does not have statutory paternity leave & parental leave. Some employers, particularly multinational companies or those with collective agreements, may offer theses leaves or flexible arrangements as part of their benefits package.

Sick Leave

Sick leave in Guatemala is governed by both the Labor Code and the Guatemalan Social Security Institute (IGSS).

• Eligibility: Employees are entitled to paid sick leave if they are unable to work due to illness or injury.
• Payment Responsibility:
  • IGSS covers sick pay if the employee is registered and the illness qualifies under IGSS regulations.
  • If not covered by IGSS, the employer is responsible for paying sick leave.

Sick Leave Duration and Pay:

• 2–6 months of service: 1 month of sick leave at 50% pay
• 6–9 months of service: 2 months of sick leave at 50% pay
• 9+ months of service: 3 months of sick leave at 50% pay 1

Employers may temporarily fill the employee’s position during their absence, with the arrangement ending upon the employee’s return.

Termination Requirements

At this time, Vensure does not have termination requirement details available. For related information, see Notice Period below.

Notice Period

Under Guatemalan labor law, notice periods for termination depend on the length of service and the reason for termination. While individual or collective agreements may establish specific terms, they must comply with or exceed the minimum standards set by law.

Standard Notice Periods (Employer-Initiated Termination):

• Up to 6 months of service: Minimum 1 week’s notice
• 6 months to 1 year: Minimum 10 days’ notice
• 1 to 5 years: Minimum 2 weeks’ notice
• More than 5 years: Minimum 1 month’s notice

Employers and employees may agree to different notice periods (up to a maximum of six months), provided they are documented in the employment contract or governed by a collective agreement.

Severance Pay

Employees are entitled to severance pay if they are terminated without just cause. Key provisions include:

• Claim Period: Employees have 30 days from the date of termination to file a claim in labor court.
• Compensation: If the employer cannot justify the dismissal, the employee may receive up to 12 months of severance pay.
• Reinstatement: The employee is not entitled to reinstatement even if the dismissal is found to be unjustified.

Special Protections Against Termination: Employers are prohibited from terminating the following employees without prior court authorization:

• Pregnant employees or those on maternity leave
• Trade union members or leaders
• Employees involved in a collective labor dispute
• Employees affected by an illegal business closure

Termination Due to Force Majeure or Economic Reasons: In cases such as company closure, economic hardship, or the employee’s death:

• Severance is typically negotiated and may range from two days to four months’ salary, depending on the circumstances.

Unemployment Insurance

Guatemala does not provide government-funded unemployment compensation to individuals who lose their jobs. There is no national unemployment insurance program administered by the Guatemalan Social Security Institute (IGSS) or any other public agency

Anti-Discrimination Practices

Guatemalan labor law strictly prohibits discrimination in employment based on a range of protected characteristics. Employers are legally barred from engaging in discriminatory practices in any aspect of the employment relationship, including:

• Recruitment and hiring
• Promotion and training opportunities
• Compensation and benefits
• Disciplinary actions and termination
• Protected Characteristics Include:
• Race
• Ethnicity
• Sex
• Marital status
• Religion
• Political opinion
• Economic status
• Disability

Workplace Safety Standards

Under Guatemalan labor law, employers are legally required to ensure a safe and healthy working environment for all employees. This obligation is grounded in the Labor Code and enforced by the Ministry of Labor and Social Welfare (MINTRAB).

Key Employer Responsibilities Include:

• Identifying and mitigating workplace hazards through regular risk assessments.
• Providing appropriate personal protective equipment (PPE) and safety training tailored to job-specific risks.
• Maintaining machinery, tools, and facilities in safe working condition.
• Establishing and enforcing internal health and safety policies, including emergency procedures.
• Promptly investigating workplace accidents and reporting them to the relevant authorities, including MINTRAB and IGSS when applicable.

Employee Rights and Protections Employees have the right to:

• Refuse to work in conditions that pose an imminent and serious risk to their life or health, provided they notify the employer of the danger.
• Receive training and information about workplace hazards and safety protocols.
• Access medical care and compensation through IGSS in the event of a work-related injury or illness.

Workers’ Compensation

Occupational Injury or Illness If an employee suffers a work-related injury or illness, IGSS provides:

• Medical care and hospitalization
• Rehabilitation services
• Temporary disability payments (a percentage of the employee’s salary)
• Permanent disability compensation, if applicable

Workplace Fatalities

• In the event of a fatal workplace accident, IGSS provides:
• Survivor benefits to eligible dependents
• Funeral expenses

Employer Responsibilities

• Register employees with IGSS from the first day of employment.
• Pay monthly contributions based on a percentage of the employee’s salary.
• Report workplace accidents or illnesses promptly to IGSS.
• Maintain a safe work environment in compliance with Governmental Agreement 229-2014, which outlines occupational health and safety standards.

Labor Law Sanctions

Minimum Wage: Employers must adhere to the minimum wage regulations. Failure to comply can result in fines and sanctions.

Working Hours: The standard working week is capped at 44 hours, with night shifts limited to 36 hours per week. Violations of these limits can lead to penalties.

Occupational Safety: Employers are required to ensure safe working conditions. Non-compliance with safety standards can result in sanctions.

Labor Contracts: Employers must provide clear and legally compliant employment contracts. Infractions related to contract terms can attract fines.

Social Security Contributions: Employers must make appropriate social security contributions for their employees. Failure to do so can lead to sanctions.