Guatemala, a constitutional democratic republic located in Central America, is bordered by Mexico to the north, the Pacific Ocean to the west, Belize and the Caribbean Sea to the east, and Honduras and El Salvador to the south. It is divided into 22 geographic departments.

Guatemala, which won its independence in 1821, is the most populous of the Central American countries and the largest economy. Famed for its volcanoes, lakes, textiles, Mayan ruins, and temperate climate in the highlands, more than half of Guatemala’s economic activity takes place in four sectors: manufacturing, commerce, private sector, and agriculture. The economy is largely informal, with estimates upwards of 70% of employment, which is one of the reasons that the tax revenue is the lowest in the region. 

 

*Please note that the official currency is the currency of remuneration when employed through WorkMotion in Guatemala.

Capital :
Guatemala City
Currency :
Quetzal (GTQ, Q)
Languages spoken :
Spanish
Population :
17.36 million (2022 est.)
Minimum wage 2022 :
GTQ 2,959.24 Monthly, Non-agricultural sector
Cost of Living index :
$$$ (74 of 139 countries)
Payroll Frequency :
Monthly
VAT - standard rate :
12%
GDP - real growth rate :
7.5% (2021 est.)

Statutory Holidays

The national holidays mentioned below are valid for the year 2022.

In addition to the listed holidays, Guatemala city observes an additional holiday for Assumption Day on August 15.

 

 

Date
Holiday Name
Extra Information
January 1
New Year’s Day
April 14
Maundy Thursday
Movable - The Thursday before Easter Sunday
April 15
Good Friday
Movable - The Friday before Easter
April 16
Easter Saturday
Movable - The Day before Easter
May 2
Labor Day
In lieu of May 1
July 28
Army Day
Movable - The Monday near June 30
September 15
Independence Day
October 20
Revolution Day
November 1
All Saints Day
December 24
Christmas Eve
Noon onwards
December 25
Christmas Day
December 31
New Year’s Eve
Noon onwards

Contract Sharing Time


The approximate time for sharing the contract with an employee in Guatemala is 10 business days assuming no special requests or changes to our standard employment contract. Any such requests or changes would need to undergo internal and external review, directly leading to a time delay.

NOTE: This number is subject to change and is only an estimation of the Contract Sharing Time. The estimated Contract Sharing Time begins from the moment that WorkMotion has received all required information from both the client and the employee.

What You Need To Know


  • The use of foreign languages ​​is prohibited in the orders, instructions, notices, or provisions given to workers. Managers and supervisors should either use Spanish or an indigenous dialect if its use is widespread in the region.
  • Employers are prohibited from employing less than 90% of Guatemalan workers and paying them less than 85% of the total wages earned in their respective companies, except for jobs of national priority, technical jobs, managerial and administrative positions, or any other specific needs determined and ratified by the Ministry of Labor and Social Security or executive body.
  • It is prohibited to enter into contracts with Guatemalan workers (except for qualified persons or those with qualifications for technical jobs) for the provision of services or execution of works outside the territory of the country without prior permission from the Ministry of Labor and Social Welfare and paying for the cost of migration.
  • Every employer, who permanently employs 10 or more workers in their company, is obliged to draw up and put into effect their respective internal work regulations that are approved by the General Labor Inspectorate.

Labor Conditions


Working Hours

The ordinary working hours are eight hours a day and 48 hours a week. Night shifts (6 pm to 6 am) can be a maximum of six hours a day and 36 hours a week. The ordinary working day of mixed effective work may not exceed seven hours a day or exceed a total of 42 hours a week. The ordinary working day can be continuous or divided into two or more periods with rest intervals that are rationally adopted according to the nature of the work in question and the needs of the worker. 

 

Overtime

Any time over 44 hours in one workweek is considered overtime and is paid at a rate of 150% of the regular pay. The effective work that is executed outside the time limits determined for the ordinary working day, or that exceeds the lower limit that is contractually agreed, constitutes extraordinary working hours or days. Ordinary and extraordinary days cannot exceed a total of 12 hours a day, except in exceptional cases that are determined in the respective regulations or are due to an accident or imminent risk to people, establishments, machines, and facilities.

Probation Period

In any contract for an indefinite period of time, the first two months are deemed to be a trial, unless the parties agree to a shorter period for mutual convenience. During the trial period, either party may terminate the contract, of their own free will, with or without just cause, without incurring any liability.

 

Termination Notice Period

 

The worker who wishes to terminate their contract without just cause or attending only to their own will must give prior notice to the employer in accordance with the following:

 

Duration of Continuous ServiceNotice Period
Less than 6 months1 week
After 6 months but less than 1 year10 days
After 1 year but less than 5 years2 weeks
More than 5 years1 month

 

Termination notices must always be given in writing.

Leave / Time Off

Annual Leave

Every worker, without exception, has the right to a period of paid vacation after each year of continuous work in the service of the same employer, the minimum duration of which is 15 working days. In order to be eligible, the worker must have at least 150 days of service in the preceding year. Vacations cannot be accumulated from year to year in order to later enjoy a longer rest period. However, the worker at the end of the contract can claim cash compensation for leave that has been missed in the last five years.

Sick Leave

If the employee is covered under the benefits of the Guatemalan Social Security Institute, the employer only needs to pay the fees ordered by the regulations issued by the Institute. In cases where the employee is not eligible for social security benefits and the employer is not found to be liable for the temporary incapacity to perform work or cause an occupational illness, the employer should still provide leave to the employee as per the following regulations: 

 

Employment DurationSalary to be Paid
After 2 months and less than 6 months50% of salary for a month.
6 or more months and less than 9 months50% for 2 months.
9 or more months50% for 3 months.

Parental Leave

There is no statutory provision for parental leave in Guatemala. 

 

Maternity Leave

The working mother enjoys a paid rest with 100% of her salary during the 30 days preceding the delivery and the following 54 days. The days that cannot be enjoyed before childbirth are accumulated to be enjoyed in the postpartum stage, in such a way that the working mother enjoys 84 effective days of rest during that period. The woman who has been granted the rest has the right to have her employer pay her salary unless she receives the benefits of the Guatemalan Social Security Institute.

 

Paternity Leave

Two days of paid leave on the birth of a child is paid by the employer.

 

Adoption Leave

The worker who adopts a minor has the right to postpartum leave so that both can enjoy a period of adaptation. In this case, the leave starts from the day immediately following the day on which the minor is adopted. To enjoy this right, the worker must present the corresponding documents stating the adoption process. 

Other Types of Paid Leave

Voting Leave

The employer is obliged to provide the employee with paid time off to vote. The duration of this time is not specified.

 

Miscellaneous

The following table provides for the paid leave to be provided by the employer:

CauseDuration
Death of spouse, or partner, or parents, or children3 days
Marriage5 days
Leave provided in internal regulations or collective bargaining agreementAs per the regulations or collective bargaining agreement
To respond to court subpoenasThe time that the appearance takes provided that it does not exceed half a day within the jurisdiction and one day outside the department in question.
Union functions for executive committee members only6 days in a calendar month

Unpaid Leave

Apart from the six days per calendar month of paid leave provided by the employer for members of the executive committee of the union, there is also provision for leave without pay to executive committee members who request it, for the time necessary to attend to the attributions of their position.

Statutory Benefits

Employees of firms with at least three workers have to be registered with the Institute for Social Security (Instituto Guatemalteco de Seguridad Social, IGSS). Employees contribute 4.83% of their monthly salary and employers contribute 12.67% of their monthly payroll to social security. This contribution is broken down as:

 

CategoryEmployerEmployee
Old Age, Disability, and Survivors’ Benefits3.67% of gross monthly covered payroll1.83% of gross monthly covered earnings
Sickness and Maternity4% of gross monthly payroll2% of gross monthly earnings
Work Injury3% of gross monthly earnings1% of gross monthly earnings
INTECAP*

(Entity in charge of the training of workers)

1%None
IRTRA**

(Entity responsible for providing recreation and space to workers and their families)

1%None
Total12.67%4.83%

 

*Instituto Técnico de Capacitacion y Productividad.

**Instituto de Recreación de los Trabajadores de la Empresa privada de Guatemala.

Health Insurance

The beneficiary must have at least four months of contributions in the last six months. The eligible dependents include a dependent wife or cohabiting partner and children younger than seven years. Benefits include general, specialist, and dental care, maternity care, surgery, hospitalization, medicine, laboratory services, X-rays, appliances, transportation, rehabilitation, and retraining. Unemployed persons may receive medical benefits for up to two months after ceasing employment. Free medical benefits are provided to uninsured persons in an emergency and until the condition stabilizes.

Other Insurances

Accident Insurance

 

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

For temporary disability due to a work injury or occupational illness, 66.7% of the insured’s average daily earnings in the three months before the disability began is paid from the second day of incapacity until recovery. For a permanent disability due to a work injury or occupational illness, a lump sum is paid based on the assessed degree of disability as per the medical board of the Social Security Institute.

Unemployment Insurance

 

Apart from the severance pay paid to all workers dismissed through unfair dismissal or just cause, there are no employer contributions to unemployment benefits.

Public Pension

The employer contributes 3.67% of gross monthly covered payroll while the employees pay 1.83% of gross monthly covered earnings. Pension benefits include old age pension, settlement, disability pension, survivor’s pension, and funeral grant.

Other Statutory Benefits

Employer-paid Benefits on Employee’s Death

If at the time of the employee’s death, they did not enjoy the protection of the Guatemalan Social Security Institute, or if their economic dependents are not entitled to their corresponding benefits for any reason, the employer’s obligation is to cover the dependents with the amount as presented below:

 

Employer EmploysBenefitMaximum Limit
20 or more workersOne month’s salary for each year of services renderedA maximum limit of 15 months
Less than 20 workersOne month’s salary for each year of services renderedA maximum limit of ten months

 

This compensation must be covered by the employer in monthly payments equivalent to the number of wages that the worker earned for the same period.

Benefits for Workers Employed Abroad

 

If the worker is hired to provide their services or carry out work within the territory of the Republic, but in a place other than the one in which said worker habitually lives at the time the contract is signed, these rules must be observed, provided that the separation between the two sites is greater than 15 kilometers:

  • a) When the worker is asked to make daily round trips, the employer must pay them the reasonable fares or expenses that this demands; 
  • b) When the worker is compelled to live in the place where the work is to be carried out, the employer must only pay the reasonable expenses of going and coming back before and after the validity of the contract.

Disclaimer

The information contained in this Country Guide is provided for informational purposes only and should not be construed as legal advice on any subject matter. The contents of this Country Guide contain general information and may not reflect current legal developments or address your situation. You should not act or refrain from acting on the basis of any content included in this Country Guide without seeking the advice or representation of a licensed attorney. WorkMotion Software GmbH disclaims all liability for actions you take or fail to take based on any content included in this Country Guide.

Information provided in this Country Guide is provided “as is” without warranty of any kind, either express or implied, including without limitation warranties of merchantability, fitness for a particular purpose, or non-infringement. WorkMotion Software GmbH periodically adds, changes, improves, updates, or removes information without notice, and assumes no liability or responsibility for any errors or omissions in the contents of this Country Guide. This Country Guide may contain links to other websites. WorkMotion Software GmbH disclaims all liability for the privacy practices or the content of such websites.

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