Who can work in Panama?

There are some professions that are reserved to Nationals by Law and that may hinder the intention of foreigners to apply to professional visas, as follows:

Security Agent

Law 56 of 2011


Executive Decree 257 of 1965

Surveyor Law 53 of 1963
Engineer - Architect Law 15 of 1959
Agronomist Law 22 of 1961
Civil Engineer Executive Decree 257 of 1965
Agrostologist Law 22 of 1961
Mining Engineer Executive Decree 257 of 1965
Dental Assistant Law 21 of 1994
Electrical Engineer Executive Decree 257 of 1965
Medical Assistant Decree 32 of 1975
Geology Engineer Executive Decree 257 of 1965
Barber and
Law 4 of 1956
Mechanical Engineer Executive Decree 257 of 1965
Agriculture Botanist Law 22 of 1961
Chemical Engineer Executive Decree 257 of 1965
Agricultural Scientist Law 22 of 1961
Lab Technician Law 74 of 1978
Accountant Law 57 of 1978
Foreman Law 53 of 1963
Forestry Specialist Law 22 of 1961
Physician / Doctor Executive Decree 196 of 1970
Lawyer Law 9 of 1984
Veterinarian Law 3 of 1983
Economist Law 7 of 1981
Nutritionist Decree 362 of 1962
Law 22 of 1961
Dentist Law 22 of 1956
Edaphologist Law 22 of 1961
Psychologist Law 56 of 1975
Vocational Professional
Law 22 of 1961
Chemist Law 45 of 2001
Nurse Law 1 of 1954
Agricultural Chemist Law 22 of 1961
Pharmacist Law 24 of 1963
Chiropractic Decree 8 of 1967
Physiotherapist Law 47 of 1984
Medical radiologist Law 42 of 1980
Phyto-geneticist Law 22 of 1961
Sociology Law 1 of 1996
Phyto-pathologist Law 22 of 1961
Agricultural Sologist Law 22 of 1961
Therapists, and Similar
Law 34 of 1980
Horticulturist Law 22 of 1961
Agricultural Engineer Executive Decree 257 of 1965

What are the main sorts of labour contract that exist in Panama?

Definite contracts, Indefinite contracts, and Contracts for a certain work.

What are the main features of each of them?

Definite contracts:  are those in which the end of the labour relationship is duly established in the contract.

Indefinite contracts:  are those in which there is no due date of the labour relationship.  However, they can be interrupted if there are causes related to a worker’s bad conduct.

Contracts for a certain work:  are those in which the duration of the labour relationship ends when the work, as agreed-upon, is done.

What information should employees be given in Panama?

Employees should know about the existence and understand the content of the Rules of Procedure or Bylaws, about their specific duties, rights, the social or private security plan, the existence of unions within the company, vacation system, incentives, in case they are not mentioned in the labour contract.


What are the main employment rights in Panama?

All employees have the right to salary, thirteenth month, vacations, payment for extra hours, seniority premium, and indemnity right (the last two when the labour relationship ends).

What are the maximum permitted daily, weekly, monthly and annual working hours?

Daily:  8 hours; Weekly:  48 hours; Monthly: 192 hours; Yearly: 2,304 hours.

After these maximum limits, payment for extra hours apply.

Are there any minimum number of hours required?

The minimum of weekly hours that an employee can work without causing inconveniences to the Company is 20 weekly hours.  Less than this amount will cause an immediate surcharge of 10 cents over minimum wage.

What is the minimum holiday entitlement?

Every person has the right of one day off per week; additionally, the following are public holidays:

• January 1st and 9th
• Tuesday of Carnival
• Good Friday
• May 1st
• November 3rd and 5th
• November 10th and 28th
• December 8th and 25th
• The day the President takes office.

Additionally, the Executive Branch can give other holidays (days of mandatory rest).  “Bridge holidays” are common in the country –  they are usually given a Monday when the special date is in the middle of the week and the purpose is to give a long weekend to the citizens. 

Also, days of remembrance or mourning, as deemed appropriate.  In both cases, these days are to be paid as usual, according to the Labour Code.  If a person works this day for the Company, it has to be paid according to the rate for holidays and days of mourning.

Can a contract be modified while still valid and in force? If so, under which circumstances?

Yes, it is possible to modify a labour contract while still valid and in force but only if the modifications do not affect the rights the employee has at the moment of the change.

Are any particular employment relationships subject to special protection?

• Electoral Immunity:  Persons who hold a public position, by means of election by the citizens or within a political party, can only be fired by judicial authorisation.
• Trade Union Immunity:  People who hold seats in trade unions can only be fired with a judicial authorisation.
• Maternity Immunity:  Pregnant women under an indefinite contract relation can only be fired with a judicial authorisation.
• People with chronic, reactive, or degenerative illnesses that may produce labour disability, can only be fired with a judicial authorisation.

Are there any obligations to consult with a works council and/or to undertake collective bargaining?

Yes, collective negotiations should be filed and approved by the Ministry of Work and Labour Development and can be subject to arbitration as a way to solve the collective conflicts.


When and how can an employer terminate an employment relationship?

An employer can terminate a labour relationship at any moment and without cause, paying the indemnity right established by Law.

However, the employer can terminate the relationship at any moment with cause, when the act committed by the worker is no older than two months starting with the exact day it happened.  In cases involving criminal conduct, this period starts from the date the Company was informed of the act.

When and how can an employee terminate an employment relationship?

An employee can terminate an employment relationship by just cause or without cause.  A just cause is when the employer commits any of the faults described in Article 223 of the Labour Code, amongst which are change of the labour conditions agreed upon, mistreatment, security and health issues, sexual harassment, etc.

Additionally, the employee can terminate the labour contract without just cause, according to Article 222 of the Labour Code, which determines that he/she has to give a 15-day notice (regular employee) or a 2-month notice (technical employee); otherwise, a week-worth may be discounted.

What are the economic consequences in each case?

In the case of layoff or termination of a contract without cause, the employer may indemnify the employee, according to the table established by the Labour Code, plus the pay due in relation to any vacations, thirteenth month, last fortnight of salary, and seniority There is a premium when it is an indefinite worker with more than two years of service.

In the case of layoff or termination of a contract with cause, the employer only has to pay the lawful rights, i.e. vacations, last fortnight of salary, thirteenth month, and seniority premium.

Are there any situations in which an employment relationship would terminate automatically and without the need for action by either party? If so, what are they?

There is no labour relationship that can terminate in an automatic form without the need of an action from the parties.