Inauguration of the President-Elect on July 1: Important matters employers should know.

The Political Constitution of the Republic of Panama, in its article 181, establishes that the President and Vice President of the Republic of Panama shall take office before the National Assembly on the first day of July following their election. This year, July 1, 2024, is a Monday.

The Labor Code, in its article 46, states that the day the elected President of the Republic takes office is a mandatory holiday due to a national celebration. It is a mandatory rest day paid by the employer, whose payment is included in the monthly salary received from the employer.

In the event that an employee works on this day, the surcharges established in the Labor Code in article 49 will apply, which are as follows:

• 150% surcharge on the salary: Employees who work on Monday, July 1, 2024, must be paid a 150% surcharge on the ordinary workday salary, without prejudice to the worker’s right to be granted another rest day as compensation during the week. The 150% surcharge includes remuneration for the rest day.
• Compensatory rest day: Employees who work on this day must be granted a compensatory rest day during the week for having worked on the national holiday. However, when the employee works on the day that should be given as compensatory, they must be remunerated with a 50% surcharge on an ordinary workday.

For more information, please contact please contact our Labor & Employment Law team at [email protected].