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COVID-19: Temporary Employment Protections
New Legislation Enacted
Author: Irma Marcela Montenegro Vásquez, Associate – BDS, Member of Littler Global
Law 157, which became effective on August 3, establishes various temporary measures. The law covers companies that closed their operations, totally or partially, from the beginning of the State of National Emergency through December 31, 2020. Among other things, under Law 157, companies that suspended employee contracts may proceed to reinstate them and cannot hire new employees to replace those suspended employees.
Further, companies may maintain the suspensions of labor contracts until December 31, 2020, and request to extend them month to month. Prior to the temporary suspension, companies must present the employee with a proposal of mutual agreement, giving him or her two business days to respond. Otherwise, the proposal will be considered rejected. Additionally, under Law 157, a different formula is applied to calculate seniority, maternity leave and compensation.