Hiring Employees – PEO versus Entity Setup in Panama

Panama remains one of the top commercial jurisdictions in Latin America, and rightly so. The region has extremely favorable foreign investment laws and an attractive business environment. Additionally, Panama’s strategic geographic location and being home to the Panama Canal have made the country a key platform for international trade in America and around the globe. Depending on your business needs, you may hire employees through a local legal entity, or through a Professional Employer Organization (PEO).

Having a large working population with a good pool of candidates is appealing to new companies trying to expand into the market of Panama. However, there are general employment rules in Panama that have to be considered before hiring employees.

Panama labor law specifies that day time workers are employed between 6 a.m. to 6 p.m. while night employees work between 6 p.m. to 6 a.m. While an employee can work during the day and night shift, if he works for 3 or more hours during the night shift, he is considered a night time employee who will earn more than a day time employee.

The maximum hours for a day shift employee are 8 while a night time worker is 7 hours. The day time work week maximum is 48 hours. The night shift works a maximum of 42 hours per week. Overtime is charged for longer than the maximum daily or weekly hours. An additional charge of 25% over the hourly wage is paid for day workers and 75% for night workers.

Biz Latin Hub can act as your local employer of record and assist you to successfully operate in this region. We invite you to learn more about our accounting and legal experts, our Hiring and International PEO solutions and hiring support that we can provide in Panama by reviewing our presentation below. This presentation was designed by our local experts and contains all the information you need to know when choosing to hire employees in Panama.

If you have any more questions about how to hire employees in this vibrant country, reach out to our friendly team in the Panama office today.

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