Employer of Record Guide in 

Guatemala

Vacation Leave

• Standard Entitlement: 15 working days after one year of continuous service
• Accrual: Proportional accrual during the first year
• Vacation Pay: Regular salary plus 50% bonus (1.5× normal pay)
• Payout Rules: Must be paid out on termination if unused

Sick Leave

• Paid Sick Leave: Covered by Social Security (IGSS) after 3 days
• Employer Responsibility: First 3 days at employer's expense
• Duration: Up to 26 weeks for the same illness
• Medical Certification: Required from IGSS-approved physicians

Maternity Leave

• Pre-natal Leave: 4 weeks before expected delivery
• Post-natal Leave: 10 weeks after delivery
• Total: 14 weeks of paid maternity leave
• Payment: Covered by Social Security (IGSS)
• Job Protection: Position guaranteed upon return

Paternity Leave

• Duration: 2 days of paid leave
• Timing: Must be taken within 15 days of birth
• Payment: Employer responsibility

Bereavement Leave

• Duration: 2 days for immediate family members
• Payment: Employer responsibility
• Documentation: Death certificate required

Other Leave Types

• Marriage Leave: 5 days paid leave
• Study Leave: Available for work-related education
• Civic Duties: Time off for voting, jury duty, military service

Summary

Termination Types

Termination With Cause:

• No severance required
• Must involve serious misconduct defined in Labour Code
• Requires proper documentation and process

Termination Without Cause:

• Requires severance payment
• Must provide proper notice
• Cannot be discriminatory

Notice Period Requirements

Guatemala requires immediate payment in lieu of notice rather than working notice periods.

Severance Pay

Calculation: One month's salary for each year of service Minimum: One month's salary regardless of tenure Maximum: No legal maximum Payment: Must be paid immediately upon termination

Probationary Periods

• Duration: Up to 2 months for most positions
• Extension: Can be extended to 6 months for technical positions
• Termination: Either party can terminate without cause during probation

Final Pay Requirements

Employers must pay all outstanding amounts immediately upon termination:

• Final salary
• Proportional 13th and 14th month bonuses
• Unused vacation pay (with 50% premium)
• Severance pay (if applicable)

Anti-Discrimination Laws

Employees cannot be terminated for:

• Pregnancy or maternity leave
• Union activities
• Filing labour complaints
• Discrimination based on race, gender, religion, or political beliefs

National Holidays

Regional Holidays

Some municipalities may observe additional local holidays, particularly patron saint festivals.

Holiday Pay Rules

• Eligibility: All employees entitled to holiday pay
• Rate: Regular daily wage
• Working on Holidays: Double pay plus regular holiday pay

Required Documents for Employment

• Employment Contract: Must be in writing and include all mandatory terms
• Personal Documents:
  • National ID (DPI) or passport
  • Tax ID number (NIT)
  • Social Security registration
• Professional Documents:
  • Educational certificates
  • Professional licences (if applicable)
• Banking Information: For salary payments

Work Authorisation

• Guatemalan Citizens: No restrictions
• Foreign Workers: Must obtain work permits and residence visas
• Documentation: Apostilled documents required for foreign credentials

Employment Contracts

Mandatory Elements:

• Job description and responsibilities
• Salary and payment terms
• Working hours and schedule
• Probationary period (if applicable)
• Termination clauses

Language: Contracts must be in Spanish

Social Security Registration

• IGSS Registration: Mandatory for all employees
• Timeline: Must be completed before or on the first day of work
• Employer Responsibility: Registration and monthly reporting

Tax Registration

• Employee NIT: Required for tax withholding
• Employer Obligations: Monthly tax withholding and reporting
• Documentation: Proper records must be maintained

Onboarding Timeline

Worker Classification

Guatemala distinguishes between employees and independent contractors:

• Employees: Subject to Labour Code protections, entitled to benefits
• Contractors: Governed by Civil Code, responsible for own taxes and benefits
• Tests: Dependency, subordination, and exclusivity determine classification

WRITER NOTE: Please verify current worker classification criteria with Guatemalan labour authorities.

Union Rights

• Freedom of Association: Constitutional right to form and join unions
• Collective Bargaining: Recognised for unionised workplaces
• Strike Rights: Legal with proper procedures
• Employer Obligations: Cannot interfere with union activities

Cultural Considerations

• Language: Spanish is the primary business language
• Hierarchy: Respect for authority and seniority is important
• Relationships: Personal relationships often influence business dealings
• Time: Punctuality expectations may be more flexible than North American standards

Remote Work

• Legal Framework: Limited specific regulations for remote work
• Equipment: Employer typically responsible for providing necessary tools
• Health and Safety: Employer obligations extend to home offices
• Tax Implications: May affect tax residency for foreign workers

What We Handle

Borderless AI manages all aspects of Guatemalan employment compliance:

• Employment contract preparation and execution
• IGSS registration and ongoing compliance
• Monthly payroll processing and tax withholding
• Statutory bonus calculations and payments
• Leave management and tracking
• Termination procedures and severance calculations
• Local labour law compliance monitoring