globaltaxnews.ey.comSign up for tax alert emailsPrintDownload

20 March 2020

Panama’s Ministry of Labor and Workforce Development issues regulations with temporary actions to stem the spread of COVID-19 in the workplace

In light of the national emergency due to the COVID-19 pandemic, Panama’s Ministry of Labor and Workforce Development has issued regulations with temporary actions to prevent further spread of the virus in workspaces.

The actions must be applied immediately and must continue until the Executive Branch lifts the national emergency.

Public sector regulations

The regulations require officials over 60 years of age or with chronic illnesses to be sent home with early vacations, compensatory time or special permits, as they are people at higher risk.

Officials diagnosed with coronavirus or in epidemiological surveillance must present to the Social Security Administration a certificate from the Health Authority indicating that they are incapacitated for the length of the recovery time or preventive surveillance.

The regulations also require the implementation of teleworking for officials who, given the nature of their responsibilities, can work from home as established in Law 126 of 2020, which regulates teleworking in Panama. Additionally, the regulations establish that occupational health, safety and hygiene committees must be formed to determine safe ways of working in the offices. The new rules will apply to those who, due to the nature of their work, must be physically on the premises.

Private sector regulations

The regulations establish that occupational hygiene, health, and safety committees must be formed by workers and employers who will carry out the hygiene plan in the workplace in accordance with their job functions.

The regulations also require telework for functions that do not require an employee to be physically in the office. Law 126 establishes the procedures and responsibilities of each party in the employment relationship.

Additionally, the regulations authorize the use of accumulated or advanced vacation time, and compensatory time so that workers over 60 years old or those with chronic diseases do not have to be at work. Employees with COVID-19 and those under epidemiological surveillance for COVID-19 will receive a certificate from the Health Authority indicating the amount of time they need to recover. The Social Security Administration will process claims for incapacity due to recovery time or preventative surveillance.

The regulations authorize the Ministry of Labor and Workforce Development, the Ministry of Health, and representatives of workers and employers to work together to establish the necessary hygiene, health and safety protocols that must be implemented for the three main sectors of Panama’s economy.

The regulations allow working hours to be reduced, if necessary, in accordance with the provisions of Article 159 of the Labor Code and its regulatory legislation (i.e., Executive Decree 171 of 13 March 2020).

The regulations also require companies, in agreement with their workers, to duly formalize any of the measures described in the regulations.

For additional information with respect to this Alert, please contact the following:

Ernst & Young Limited Corp., Panama City
Ernst & Young LLP (United States), Latin American Business Center, New York
Ernst & Young LLP (United Kingdom), Latin American Business Center, London
Ernst & Young Tax Co., Latin American Business Center, Japan & Asia Pacific

ATTACHMENT

Document ID: 2020-5413

 
 

The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.

 

Copyright © 2025, Ernst & Young LLP.

 

All rights reserved. No part of this document may be reproduced, retransmitted or otherwise redistributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, or using any information storage and retrieval system, without written permission from Ernst & Young LLP.

 

Any U.S. tax advice contained herein was not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.

 

"EY" refers to the global organisation, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.

 

Privacy  |  Cookies  |  BCR  |  Legal  |  Global Code of Conduct Opt out of all email from EY Global Limited.

 


Cookie Settings

This site uses cookies to provide you with a personalized browsing experience and allows us to understand more about you. More information on the cookies we use can be found here. By clicking 'Yes, I accept' you agree and consent to our use of cookies. More information on what these cookies are and how we use them, including how you can manage them, is outlined in our Privacy Notice. Please note that your decision to decline the use of cookies is limited to this site only, and not in relation to other EY sites or ey.com. Please refer to the privacy notice/policy on these sites for more information.


Yes, I accept         Find out more