Colombia implements labor reform amid high informality

Colombia is undergoing significant labor market changes following the implementation of Law 2466 of 2025, known as the labor reform. The law establishes indefinite contracts as the primary employment modality, restricts temporary contracts, and modifies regulations regarding working hours, night shifts, and holiday surcharges.

Key provisions include a gradual reduction of the maximum workweek toward 42 hours and an increase in surcharges for working on mandatory rest days, which reached 90% in July 2026 and is projected to reach 100% by July 2027.

Despite these legislative efforts to align with international standards, high levels of informality remain a major challenge. According to DANE, the informality rate was 54.6% between May and July 2026, rising to 83.2% in rural areas. Additionally, the OECD has noted a loss of momentum in reducing informality, with data showing that approximately 57% of workers were not making pension contributions by the end of 2025.