Managing employee leave and vacation entitlements is a critical aspect of compliance and employee satisfaction when operating in Panama. The country's labor code outlines specific requirements for various types of leave, ensuring employees receive adequate time off for rest, personal matters, and health needs. Understanding these regulations is essential for employers to maintain legal compliance and foster a positive working environment.
Panama's labor laws provide clear guidelines on minimum leave entitlements, including annual vacation, public holidays, sick leave, and parental leave. Adhering to these standards is mandatory for all employers operating within the country.
Annual Vacation Leave
Employees in Panama are entitled to paid annual vacation leave after completing a certain period of service. The minimum entitlement is set by law.
- Accrual: Employees accrue one day of vacation for every eleven days of work.
- Minimum Entitlement: This accrual rate results in a minimum of 30 calendar days of paid vacation per year after 11 months of continuous service.
- Timing: Vacation must generally be taken within the 11 months following the period in which it was accrued.
- Payment: Vacation pay must be calculated based on the employee's average ordinary salary earned during the last 11 months of service. It must be paid before the employee begins their vacation.
- Accumulation: Vacation leave can be accumulated for up to two consecutive periods with the employee's agreement, but this requires prior authorization from the Ministry of Labor and Labor Development (MITRADEL).
Public Holidays
Panama observes several national public holidays throughout the year. Employees are generally entitled to a paid day off on these holidays. If an employee is required to work on a public holiday, they are typically entitled to premium pay.
Here are the public holidays observed in Panama in 2025:
| Date | Holiday |
|---|---|
| January 1 | New Year's Day |
| January 9 | Martyrs' Day |
| March 4 | Carnival Tuesday |
| April 18 | Good Friday |
| May 1 | Labor Day |
| November 3 | Separation Day from Colombia |
| November 4 | Flag Day |
| November 5 | Colon Day |
| November 10 | First Call of Independence |
| November 28 | Independence from Spain |
| December 8 | Mother's Day |
| December 25 | Christmas Day |
Note: Some holidays falling on a Sunday may be observed on the following Monday.
Sick Leave
Employees in Panama are entitled to paid sick leave when they are unable to work due to illness or injury. Specific regulations govern the duration and payment of sick leave.
- Certification: Sick leave must be certified by a medical professional.
- Payment: The employer is responsible for paying the employee's salary during sick leave for the first two days. Starting from the third day, the Social Security Fund (Caja de Seguro Social - CSS) typically covers a portion of the salary, provided the employee is registered and meets the CSS requirements.
- Duration: The duration of paid sick leave covered by the employer is limited. The CSS covers longer periods based on medical certification and contributions.
Parental Leave
Panamanian law provides specific entitlements for maternity, paternity, and adoption leave to support new parents.
- Maternity Leave: Female employees are entitled to 14 weeks of paid maternity leave. This leave typically begins six weeks before the expected delivery date and continues for eight weeks after childbirth. Payment during maternity leave is primarily covered by the Social Security Fund (CSS), provided the employee meets the contribution requirements.
- Paternity Leave: Fathers are entitled to three days of paid paternity leave upon the birth of a child.
- Adoption Leave: Employees who adopt a child under the age of five are entitled to paid leave equivalent to maternity leave (14 weeks), starting from the date the child is granted to them. Payment is also typically covered by the CSS.
Other Types of Leave
Beyond the main categories, Panamanian labor law recognizes other specific circumstances that may entitle employees to leave.
- Bereavement Leave: Employees are typically granted paid leave in the event of the death of an immediate family member (spouse, parents, children, siblings). The duration is usually three working days.
- Study Leave: While not a universal entitlement for all employees, some collective bargaining agreements or company policies may grant paid or unpaid leave for employees pursuing further education or training related to their work.
- Union Leave: Employees who are union representatives may be entitled to paid time off to attend union meetings or activities as stipulated by law or collective agreements.
- Civic Duty Leave: Employees are entitled to paid leave to fulfill civic duties, such as serving on a jury or voting.
