How to prepare your company's payroll for labor reform?

With the entry into force of Law 2466 of 2025, which structurally reforms the Substantive Labor Code, companies in Colombia face a new legal landscape that requires immediate adjustments to their labor management processes, especially in payroll settlements, taking into account the new salary and contractual adjustments that will apply to employees.

Although some changes will be implemented gradually, several provisions are already in effect, and failure to comply with them could lead to penalties, cost overruns, or operational failures. Therefore, timely preparation, rather than an obligation, is a key preventive strategy for mitigating financial and legal risks.

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New rules that impact payroll

According to experts from Alegra, a firm specializing in accounting and administrative matters, the changes in this law, known as the labor reform, establish open-ended contracts as a general rule, restricting the use of temporary contracts such as fixed-term or project-based contracts. This requires a careful review of the current contracting modalities in each organization.

Additionally, night work is being redefined. Starting December 25, 2025, it will begin at 7:00 p.m. (previously, it was 9:00 p.m.). This change will immediately impact the calculation of night surcharges, directly affecting the payroll of many work shifts.

Regarding Sunday and holiday work, the reform establishes a phased increase in the surcharge, which will reach 80% starting July 1, 2025; in 2026, it will rise to 90%; and starting in 2027, it will reach 100%, which represents a substantial change from the current 75%.

"In addition, paid leave is being expanded, detailed records of hours worked are being required, and the employment relationship with digital platform workers is being formalized, and they must now be covered by the social security system," they emphasized.

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Andrés Torres, Director of Tax Innovation and Digitalization at Alegra.com, argued that, on the other hand, the apprenticeship contract is being redefined, requiring the payment of social benefits and social security contributions, which increases labor costs for those who hire apprentices.

"The reduction of the working week to 42 hours, as provided for in Law 2101 of 2021, also remains in effect and will take full effect starting July 15, 2026," he stated.

Practical recommendations

Faced with this new regulatory framework, Alegra experts recommend that companies take five key actions to align their payroll systems with the law:

1. Audit your current payroll system: Review whether the procedures, templates, and tools used incorporate the new rules. If they are managed manually or with outdated systems, a transition to more flexible solutions will need to be evaluated.

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2. Labor cost simulation: Before implementing changes, running simulations allows you to anticipate the financial impact and adjust budgets. This is especially useful in sectors with high turnover or night shifts.

3. Training of the human talent team: Personnel in charge of hiring and payroll must be aware of legal changes to avoid errors in settlements, contributions, or formalizing new employment relationships.

4. Implementation of detailed work records: The obligation to keep rigorous records of hours worked requires improvements in clocking, attendance control, and time validation mechanisms, especially in flexible or remote work arrangements.

5. Phased change planning : Some standards will go into effect in December of this year, while others will not do so until 2026 or 2027. Establishing an internal implementation schedule will prevent improvisation and allow adjustments to be communicated to all levels of the organization.

Relevant information: Employers are expected to hire fewer people in the remainder of 2025 due to concerns about labor reform.

“Beyond compliance, this reform represents an opportunity for companies to modernize, digitize their processes, and strengthen their human talent management. Our goal is to support SMEs and accountants in this transition, offering them AI-powered, up-to-date, and 100% cloud-based solutions,” commented Andrés Torres.

This expert concluded by saying that being prepared now will not only ensure compliance with the law, but will also allow us to move toward a more orderly and equitable work model that is aligned with the new demands of the Colombian workplace.

DANIEL HERNÁNDEZ NARANJO Portfolio Journalist