#Panama 🇵🇦 #BDS_LaborAlert: Labor Implications of the Reform to the Organic Law of the Social Security Administration
After nearly four months of intense discussions, Bill 163, initially filed by the Executive Branch...
May begins with a public holiday in celebration of Labor Day, also known as International Workers’ Day.
This day is a mandatory paid holiday in our country, as established under article 148 of the Labor Code.
Please note that for 2026, there is no legal provision allowing for the holiday to be moved. Therefore, it must be observed on Friday, May 1, resulting in a long weekend for employees who typically have weekends off.
Proper Compensation for Holidays
- Hourly-paid employees (non-commercial activities): Employers must pay for days actually worked and add one day’s regular pay for the mandatory holiday. If the employee works on said holiday, it must be paid at double the regular rate.
- Monthly, biweekly, or weekly-paid employees (commercial activities): Since the base salary already includes holiday pay, any work performed on the holiday requires an additional regular day’s pay to complete the double-time compensation.
In both cases, if an employee works overtime during the holiday, such hours must be compensated with a 50% surcharge on the double hourly rate, i.e., at double time and a half.
Under the Labor Code, employees are entitled to observe the holiday, except in the cases outlined in articles 150 and 151, where the employer may require work with prior notice.
Should you have any questions regarding holiday management within your company, please do not hesitate to contact us.
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