Employment law, understood as establishing mandatory and non-renounceable minimum benefits and conditions in favor of employees, applies only to those in subordinate employment, i.e., under the direction and dependence of an employer. Other types of activities, such as so-called self-employment, liberal professions, etc., are not regulated by employment or labor law.

The employment contract may be:

1. Indefinite, when no date is specified for its termination.
2. Fixed-term, when a date or event is foreseen as ending the employment relationship. When the event is the conclusion of a work, the contract will be fixed-term if it contemplates the employee’s activity as such and not the work’s result.
3. For specific work, when the employee’s services are rated based on the conclusion of a work, considering its result. 

Based on their schedule, contracts may be full-time or part-time. 

While the Labor Code requires employment contracts to be in writing, to contain certain provisions, and to be registered before the Labor Ministry, contracts shall be valid and have full legal effect with the sole start of the employment relationship, i.e. the fact itself of an individual (over the age of fourteen) performing services or executing work under the continued dependence and the immediate or delegated direction of an employer, in exchange for any kind of retribution.

Therefore, under Guatemalan labor law, employment is mainly a reality, and the applicability of employment law will follow the facts, regardless of whether the parties fulfilled the required formalities. However, failure to meet such formalities will result in, most importantly, a shifting of the burden of proof if an employee files suit in labor courts, and may also lead to the imposition of administrative fines on the employer. 

Yes, part-time employees are afforded the same rights as full-time employees, in proportion to their schedule as applicable. However, certain rights and benefits will not be proportional, such as the minimum vacation (paid time off) entitlement. 

Employment contracts cannot be assigned without prior express consent from the employee and, in such cases, will not be assigned to the employee’s detriment. For example, they will maintain all rights and benefits arising from seniority. Assignment will not require employee consent when it derives from the sale of the enterprise of which the employment contracts are legally a part.

As explained above, the Labor Code’s protective rule does not apply to enterprise transfers.

By extension, it also does not apply to the transfer of a company since, in such a case –and unlike an enterprise transfer–, the company as employer will still be the same legal entity, i.e., there occurs no subjective change in the employment relationship. 

As explained above, there are no statutory rights for employees on the change of control of an employer.

Unilateral changes can only be made without affecting, to the employee’s detriment, any of the elements classified by the Labor Code as essential to the employment relationship: the matter or object of the service or work, the manner of carrying it out, the time of its execution (schedule), the place of execution (workplace) and the retributions to which the employer is obligated (salary and applicable benefits). Any unilateral change to an essential element in detriment of the employee will constitute an indirect dismissal, in which case the employee may cease work and sue the employer for unlawful termination, seeking payment of severance, damages and litigation costs.

Some employment contracts may foresee an employer’s ability to make certain unilateral changes to essential elements. For example, the employee may be assigned to a different workplace if the employer has various locations. Unilateral changes to essential elements can also be made if they benefit the employee: for example, an increase in salary. Otherwise, all changes to essential elements will require the employee’s consent.

Changes that do not affect an essential element to the detriment of the employee fall under the employer’s right to direct work and thus may be decided unilaterally. 

The employer has the right to terminate employment at any time. However, if there is no just cause for termination, the employee is entitled to severance. Severance is equivalent to one month’s salary for each year of continuous service (or proportionally if work was less than one year). The monthly salary, for this purpose, is not limited to basic or nominal salary, but calculated on the employee’s last six months of salary including all payments received, such as bonuses and benefits.

Yes. As explained, dismissal without cause entitles the employee to payment of severance. If severance is not paid, the employee may seek payment of severance, plus damages and litigation costs, before a labor court. In some specific cases when termination is prohibited (such as pregnant or nursing female employees, or employees participating in the formation of a labor union), the remedy available from labor courts is to be reinstated in the job from which they were wrongfully terminated. 

There is no specific legislation on whistleblower protections. However, any action or dismissal in retaliation for exercising the right to report crimes could, at least in theory, be argued as wrongful termination, though we know of no precedent attempting this in practice.   

There is no specific regulation of the right to privacy for employment purposes. However, it is a right recognized as constitutional through binding precedent from the Constitutional Court and, therefore, must also be guaranteed and respected in private contexts by private parties. The Court has recognized the action for constitutional protection (amparo) as a direct remedy available for protection of the right to privacy, including against private parties. However, we know of no precedent where such an action has been brought in employment contexts.

Yes. The Labor Code specifically prohibits discrimination in very broad terms. There is also specific legislation protecting categories of employees such as the elderly or persons living with HIV. Some forms of discrimination may constitute crimes under the Penal Code. 

Yes, there are statutory rights to vacation, medical leave, and parental leave. There have been no changes to leave benefits in the past 12 months. There is a bill pending before Congress (No. 5924) seeking to introduce leave entitlements and extend some already existing ones for parents to accompany their wives during pregnancy and upon birth of their child. Another bill (No. 6727) seeks to extend certain holidays that already exist during Christmas, New Year’s, and Holy Week, although technically these are not leave benefits.

The Commercial Code classifies as unfair competition the hiring of someone who has undertaken the obligation not to carry out a specific activity for a certain time within a certain region, if the contract has been registered at the Commercial Registry. Other than this provision, there is no specific regulation on restrictive covenants, besides the general (civil) rule that it is possible to contractually assume negative obligations and to agree penalties for violation or non-performance. In this sense, it is usual to include restrictive covenants in employment contracts, especially for high positions, and it is best practice to specify them by place, duration and scope. Although the validity of such covenants has been questioned in some cases, we have no knowledge of one that has reached a publicly available final decision from a court regarding validity. They have, instead, focused on procedural aspects.   

Refusing to sign a restrictive covenant is not a justified cause for termination. Furthermore, they are usually signed as part of the employment contract, at the beginning of the labor relationship. If an employee were to be terminated for such refusal once the labor relationship is already underway, it would be a termination without cause and thus give rise to severance. There is no rule or precedent on what serves as consideration for a restrictive covenant. In various cases, it is formalized as monetary compensation.  

Yes. Both employer and employee must pay contributions to the Guatemalan Institute of Social Security ("IGSS", by its Spanish acronym). These are charged at a rate of 15.5% of salary, of which 10.67% must be paid by the employer and 4.83% by the employee. The employer withholds the employee’s contribution and pays for both. Social security contributions are deductible from income tax. IGSS pensions and services cover not only retirement but also other things such as disability, illness, medical attention, and maternity.

Additionally, employers pay 1% of salary as a contribution to the Institute for the Recreation of Private Enterprise Employees ("IRTRA", by its Spanish acronym), and another 1% of salary as a contribution to the Technical Institute for Training and Productivity ("INTECAP", by its Spanish acronym).

Yes. The main statutory benefits required by law are:

1. Incentive Bonus, at a minimum rate of Q.250.00 per month. 
2. Christmas Bonus, equivalent to one month’s salary. It is usually paid in full in December, although the law allows for 50% to be paid in January.
3. Mid-year Bonus, commonly known as Bonus 14, equivalent to one month’s salary but paid in July.  
4. Paid vacation for a minimum of 15 days after each year of continuous work.
5. One day’s rest after each week of continuous work. 

No. Retirement is always optional for the employee, although there are specific rules governing severance payment when termination arises from retirement, depending on whether the employee will receive a pension from the Social Security system and, in such case, the amount of said pension. 

No. IGSS pays an old-age pension arising from reaching a certain age and from having paid a certain number of contributions, not from retirement in the sense of ceasing all types of work. Employees who reach the age at which they are eligible for the pension may not only continue working, opting to claim the pension later, but also continue working after they have already claimed the pension and are receiving it. In this case, the working pensioner has the right to request the employer to no longer withhold the contribution destined to old-age pension, but only the portion destined to IGSS healthcare programs. Private benefits or insurance schemes may have different rules, but they are in addition to, not in lieu of, mandatory IGSS contributions and benefits. 

This will depend on the provisions of each employment contract, which in practice have varied under work-from-home and other models that became more widespread after the COVID-19 pandemic. However, under the traditional legal framework and in normal circumstances, the employee is obligated to carry out work in the place established by contract. Failure to attend the workplace without the employer's permission or justified cause, during two full consecutive working days, or during six half days within the same calendar month, constitutes just cause for termination, after the employee has formally required the employee to return to work or to justify the absence.