Guide to employment, payroll and benefits in

Guatemala

Rivermate offers complete payroll, benefits and compliance services for

Guatemala

01. Overview

Last updated: 

August 19, 2021

Currency
Guatemalan Quetzal
Capital
Guatemala City
Ease of doing business
62.6
Language
Spanish
Population
17915568
GDP growth
2.76%

02. Grow your team in

Guatemala

with Rivermate

Payroll, benefits, taxes, and compliance can be difficult to manage in

Guatemala

, particularly if you don't have established local relationships. You can hire employees in

Guatemala

effectively, conveniently, and in full compliance with all relevant labor laws using Rivermate's global employment solution. We handle the responsibilities and legal risks associated with foreign employment so you can concentrate on growing your company.

03. Summary

Guatemala, formally the Republic of Guatemala, is a Central American country bordered on the north and west by Mexico, on the northeast by Belize and the Caribbean, on the east by Honduras, on the southeast by El Salvador, and on the south by the Pacific Ocean. It is the most populated country in Central America, with an approximate population of 17.2 million people, and the 11th most populous country in the Americas. Guatemala is a representative democracy with Nueva Guatemala de la Asunción, also known as Guatemala City, as its capital and largest city. The heart of the Maya civilization, which spanned Mesoamerica, was historically centered in what is now Guatemala. The Spanish seized much of this territory in the 16th century and claimed it as part of the viceroyalty of New Spain. Guatemala gained independence from the Federal Republic of Central America in 1821, but it disbanded in 1841. Guatemala experienced persistent turmoil and civil unrest from the mid- to late-nineteenth century. It was governed by a series of dictators supported by the United Fruit Company and the United States government beginning in the early twentieth century. A pro-democratic military coup deposed authoritarian leader Jorge Ubico in 1944, launching a decade-long revolt that resulted in sweeping social and economic reforms. From 1960 to 1996, Guatemala was engulfed in a brutal civil war waged between the US-backed government and leftist insurgents, which included genocidal massacres of the Maya population committed by the military. Guatemala has seen economic development and competitive democratic elections since a peace agreement signed by the United Nations, but it still faces high rates of poverty and crime, as well as drug cartels and instability. Guatemala is ranked 31st out of 33 Latin American and Caribbean countries on the Human Development Index, with many endangered species, contributing to Mesoamerica's designation as a biodiversity hotspot.

04. Public holidays

05. Types of leave

Paid time off

In their first year of employment, employees are entitled to 15 days of leave.

Public holidays

Guatemala recognizes twelve public holidays.

Sick days

Sick insurance is charged at half the daily pay rate that is paid by either the employer or social security, depending on the cause for the illness.The duration of sick leave is determined by the period of service:1 month of paid sick leave after 2–6 months of work6–9 months of work + 2 months of paid sick leave3 months of paid sick leave after 9 months of workIf the employee does not return at the end of the sick leave, the work arrangement is permanently terminated (called a "absolute suspension"), and all workplace and employee duties are suspended. In this case, the plaintiff has the right to cancel the work arrangement, but the employer cannot do so unless there is good reason.Furthermore, the contractor may seek to fill the employee's responsibilities on a contractual basis, and may be dismissed until the employee returns.

Maternity leave

Beginning 30 days before the scheduled due date, mothers are entitled to 84 days of maternity leave.The mother is entitled to 42 days of paid leave in the case of a miscarriage or stillbirth.

Paternity leave

Guatemala currently has no provisions in the law regarding paternity leave.

Parental leave

Guatemala currently has no provisions in the law regarding parental leave.

Other leave

In the case of the loss of a partner or infant, bereavement leave is a three-day paid leave.Employee wedding – 5 days paid time for the employee's wedding.A member of a labor union's executive committee can take up to six days of paid leave to perform union duties. A individual in this situation may be entitled to extra unpaid leave.A judicial summons entails a half-day paid leave.

06. Employment termination

Termination process

Except for giving written notice and for reasonable cause, Guatemala lacks a standardized termination procedure. However, there are few instances in which an employer must request permission to terminate an employee: if the person is pregnant or nursing; if the employee is active in the creation of a union; and if the employee is involved in “collective conflict” under collective bargaining.

Notice period

The duration of the notice period is determined by the length of employment. The notice period is one week for jobs lasting less than six months. The notice period is at least 10 days for jobs lasting six months to one year. The notice period is at least two weeks for employees who have been with the company for one to five years. There will be a month's notice period for employees who have worked for more than 5 years.

Severance pay

Severance payments are only made when a court rules that an employee was terminated without cause. The employee may be reinstated, and will receive back pay from the date of termination, or he or she may receive severance pay equal to one month's salary for each year worked. Additionally, if an employee receives non-cash benefits such as use of an employee vehicle, a mobile phone, or meals, they are entitled to 30% of their income for each year of service.

Probation period

The probationary period in Guatemala usually lasts for two months.

07. Working hours

General

The standard work week is 44 hours long and includes eight hours of sleep. This can be increased to a maximum of 48 hours per week by adding two hours per day. Managers and supervisors are permitted to work a maximum of 12 hours per week. Employees are entitled to 30 minutes of rest per day and one day of rest after five days, but the law makes no reference to a specific day.


Nighttime work is limited to 36 hours per week, divided into six six-hour shifts between 6 p.m. and 6 a.m. If the shift includes daytime work, the cap is increased to 42 hours.


Employees under the age of 14 are not permitted to work nights or overtime. Their workweek is limited to 38 hours, with a maximum of seven hours per day.

Overtime

Overtime is defined as hours worked in excess of 44 in a workweek and is compensated at 150 percent of the standard rate. Employees in hazardous environments are not permitted to work overtime. Overtime pay is paid to employees who work on a rest day or a public holiday.

08. Minimum wage

General

The minimum wage in Guatemala varies by sector, according to the country's compensation laws. Non-agricultural employees, for example, earn 92.88 Guatemalan quetzals per day as of January 2021. Employees in export-sector factories should be paid 84.88 quetzals per day. Employees earning the minimum wage should be required to receive a monthly bonus of 250 quetzals. Salaried employees should also receive two mandatory yearly bonuses, each equal to one month's salary.

09. Employee benefits

General

Probationary period, annual leave, public holidays, sick leave, maternity leave, paternity leave, overtime pay, severance pay, and 13th month pay are among the mandatory benefits stipulated by Guatemalan labor law.

Social security benefits are also included in statutory benefits.

10. Why Rivermate as your Employer of Record / PEO?

Establishing an entity in

Guatemala

to hire a team takes time, money, and effort. The labor law in

Guatemala

has strong worker employment protection, requiring great attention to details and a thorough awareness of local best practices. Rivermate makes expanding into

Guatemala

simple and effortless. We can assist you with hiring your preferred talent, managing HR and payroll, and ensuring compliance with local legislation without the hassle of establishing a foreign branch office or subsidiary. Our PEO and Global Employer of Record solutions in

Guatemala

give you peace of mind so you can focus on running your business.

Please contact us if you'd like to learn more about how Rivermate can help you hire employees in

Guatemala

via our Employer of Record / PEO solution.

Ready to get started? Our friendly staff is ready to assist you with all your questions, let's connect.