Chapter 5: Employer's Guide to Hiring Guatemalans
In Guatemala, employers have specific legal obligations to fulfill when hiring employees, aimed at protecting workers’
rights while maintaining fair employment practices. Here’s a comprehensive look at what you need to know:
5.1 Employment Contracts
Guatemalan labor law requires a written employment contract for all employees, which should be signed in three copies:
one for the employee, one for the employer (Plutus), and one for the Directorate General of Labor. These contracts must
clearly define job responsibilities, compensation, working hours, leave entitlements, and termination conditions. By law, the
contract should also be in Spanish and use local currency (quetzales) for any financial terms..
5.2 Wages and Payroll Obligations
The average wage for a professional in Guatemala is between Q4,000 to Q20,000, depending on the market for that
position. In addition, employers are obligated to deduct and submit employee income tax and social security contributions
to the relevant authorities. Employers must register all employees with the Guatemalan Social Security Institute (IGSS) if
they have more than three employees, ensuring social security coverage for health, maternity, and pension benefits.
5.3 Working Hours and Overtime
The standard work week in Guatemala is 40 hours, typically divided into eight-hour days over five days, with daily hours
not exceeding 12. Any hours worked beyond these thresholds are considered overtime and should be compensated at 1.5
times the employee’s standard hourly wage. Night shifts (from 6 p.m. to 6 a.m.) and holiday shifts also have specific
regulations for compensation.
When working with Plutus, we suggest our employers to not ask your employee to work over 44 hours a week, unless
strictly necessary and under very strenuous circumstances. We also suggest not to make your employee work weekends
(unless that is their normal schedule) except in strictly necessary circumstances (like a high season or emergency delivery
of a project).
5.4 Paid Leave
Employers are required to provide employees with 3 weeks of paid annual leave after one year of service. Additionally,
employees are entitled to 12 weeks of maternity leave (six weeks before and six weeks after childbirth), two days of
paternity leave, and various other paid leaves, including bereavement and marriage leaves. Public holidays are also
observed and must be compensated. These entitlements aim to support work-life balance and offer adequate time for
family or personal events.
With Plutus, our Guatemalan employees have 4 weeks of paid vacation. We suggest our employers to give the week between December 24th and January 1st as a fourth paid vacation week to their employees.
Vacation Request Process:
We have a standard process in place for employees to request vacation time but are happy to adapt to your existing procedures to ensure seamless integration. We kindly ask employers to notify us via email whenever an employee will be out ofthe office. This allows us to make the necessary updates to their benefits package promptly and accurately.
Maternity and Paternity Leave:
We also suggest our employers to offer longer maternity and paternity leaves than what Guatemalan laws require. Our
suggestion is 4 months maternity leave and 1 month paid paternity leave. However, it is up to you if you want to provide
this extra benefit.
5.5 Holidays in Guatemala
Guatemala observes seven official holidays and three additional days during Holy Week (typically in March or April), during which employees are entitled to time off. If an employee is required to work on a holiday, the employer must either:
- Compensate the hours worked at 1.5 times the regular hourly rate, or
- Allow the employee to take a different day off in exchange for the holiday worked, with prior agreement from the employee.
It is against the law to require employees to work on a holiday without compensation or agreement. For your convenience,
a table with holiday dates and records of alternative days off will be provided.
5.6 Sickness and Accidents
Guatemala’s social security system (IGSS) is designed to protect employees by covering their salary during periods of
illness, scheduled treatments, or accidents. A specific process must be followed to ensure IGSS takes responsibility for
these payments. During this time, employers are not required to pay the employee’s salary. If a temporary replacement is
needed during the employee’s absence, this will incur an additional charge.
5.7 Termination and Severance
Terminating an employee in Guatemala requires adherence to clear legal guidelines. Severance pay is mandatory in most
cases unless termination occurs due to justifiable causes, such as a breach of contract. Severance is typically calculated
as one month’s salary for each year worked. When hiring with Plutus, all of the severance cost is already included in your
monthly payment.
5.8 Social Security and Healthcare
Employers are responsible for contributing to Guatemala’s social security system, which covers employee health,
maternity, and pensions. Employers pay a significant portion of these contributions, which provides essential benefits and
healthcare support for employees, a critical factor in employee retention and satisfaction.
When you hire with us, we pay the employer’s part for Social Security and provide your employees with private medical
insurance that covers most common conditions and emergencies.
5.9 Start Date and Onboarding Day
At Plutus, we ensure your new employee is set up for success from day one through a comprehensive onboarding process. This includes an introduction to the fundamentals of North American business culture, tailored to your team’s
specific location. For example, we provide additional training on cultural nuances unique to regions like Quebec or Florida.
To guarantee your employee is fully prepared, we conduct IT checks on their Plutus-provided hardware and software, ensuring all systems are functional and ready.
To facilitate a smooth onboarding, we kindly request that you share any necessary software and access credentials in at least one week in advance, so everything is set up by the employee’s start date.
Once an offer is accepted, we collaborate with you to determine a start date. Please note that this date may be adjusted if
the employee needs to serve a two-week notice period with their current employer.
For companies unfamiliar with Guatemala’s employment regulations, working with an experienced partnerlike Plutus Solutions can simplify the process. Plutus handles all compliance, onboarding, and payroll obligations, allowing businesses to focus on growth while ensuring their Guatemalan employees receive all the rights and benefits they are entitled to under local laws.
