Sick leave in Colombia: who pays and how it is settled

Sick leave in Colombia: who pays and how it is settled

An employee hands in a ten-day medical certificate and whoever runs payroll has to settle three things before closing the period: whether those days are paid, who pays them and on what amount they are calculated. Both wrong answers are common and expensive. Paying all ten days at 100 % out of the company's own funds turns a two-hundred-thousand-peso event into a cost with no reimbursement. Deducting them as an unjustified absence turns sick leave into a claim. Here are the three cases — ordinary illness, work accident and leave — the settlement for each, a full ten-day example and the documents that support the payment.

What sick leave is and which types exist

Sick leave is the medical finding that a person cannot perform the service for a given period. It does not break the contract: what is suspended is the obligation to work, not the relationship. That difference has practical consequences. If the relationship stays alive, the employee keeps certain protections and the company keeps its obligations.

Four situations land in the same inbox and are not settled the same way. Ordinary illness, work accidents and occupational illness are sick leave. Maternity and paternity leave are a different figure, with a different duration and a different payer. Treating them as a single block is where most payroll mistakes on this subject begin.

None of the four is an unjustified absence. Sick-leave days are not deducted as an absence, are not flagged as a no-show and are not offset against vacation. When payroll treats them as an absence, the employee loses the payment and the company gains a problem it did not have before.

Ordinary illness: the employer's three days and the 66.67 %

This is the most common case and the one most often settled badly. The first three days are borne by the employer, at 100 % of salary. From the fourth day the EPS (the health insurer) pays, recognising 66.67 % of the contribution salary base. It is not a punishment or a penalty: it is a sharing of risk. The company takes the short event, which is frequent and cheap; the system takes the long event, which is less frequent and can last weeks or months.

That 66.67 % equals two thirds of the salary base. The consequence for the employee is direct: during the days the EPS pays, one third of the base stops arriving. If the company chooses to top up the difference, that is its own decision and not an obligation deriving from that split; it is worth putting in writing, because a voluntary payment repeated over time becomes an expectation and is later claimed as a right.

Two clarifications that prevent arguments. First: the change of payer happens on day four, not on day three or day five; miscounting the start date shifts the entire bracket. Second: the percentage applies to the contribution salary base, not to what the employee sees in the bank.

Work accidents and occupational illness: the ARL from day one

There is no three-day gap here. When the origin is a work accident or an occupational illness, the ARL (the occupational risk insurer) pays from the first day and at 100 % of the salary base. The employer does not take the opening bracket, and the employee does not lose the third that is lost under ordinary illness.

The difference between an accident and an occupational illness lies in how it manifests, not in who pays. An accident is a sudden event, with a date and a time: the fall, the blow, the cut. An occupational illness is gradual deterioration associated with repeated exposure at work. In both cases the payer is the ARL and the percentage is the same; what changes is how the origin is documented.

That origin is the most expensive decision in the whole process. A case classified as ordinary illness when it was in fact an accident costs the employee 33.33 % of the base and shifts the first three days onto the company. That is why reporting the accident to the ARL is not paperwork: it is the act that opens the coverage.

Maternity and paternity leave: paid differently, which is why they get confused

Maternity leave is 18 weeks paid at 100 %, and a multiple birth extends the period. Paternity leave is 2 weeks. The EPS pays them, charged to the system, not the company out of its own funds. Even so, they go through the same filing window as sick leave, which is why they end up mixed into payroll.

The typical mistake is to settle them as if they were vacation or as if they were ordinary sick leave. They are neither: they are not accumulated rest, and they do not carry the 66.67 %. They are leaves at 100 %, with a fixed duration that the company neither negotiates nor extends on its own initiative.

One detail gets overlooked: the period is counted in full weeks, and when the birth is multiple the extension moves the return date. That date is what triggers reinstatement, the replacement and the accrual for the position. Handling it by eye produces overpayments, underpayments and refunds nobody reconciles afterwards.

How the base is calculated and why net pay does not work

The settlement base is the contribution salary base: the same amount on which contributions are paid, not the net pay that reaches the pocket. This is the most widespread confusion and the one that produces underpayments. If the company settles on net pay, the employee receives less than due and the difference sits as a silent liability that surfaces in a claim.

The reasoning is simple. Deductions — the employee's contributions, withholding and other withholdings — do not reduce the contribution base; they are applied after that base has been determined. An employee with a base of 2,000,000 may see considerably less in the bank, but the sick leave is settled on 2,000,000.

When income is variable, because there are commissions, overtime or variable payments, the base changes from one period to another. In that case the settlement must take the base of the corresponding period, not an average the company invents. If the case is complex, the short path is to confirm the certified base with the accountant before settling.

A full example: ten days of sick leave for ordinary illness

Contribution salary base: 2,000,000. Sick leave for ordinary illness: 10 days. First, the value of one day is obtained by dividing the base by 30: 2,000,000 / 30 = 66,666.67. That daily value is the piece that repeats in both brackets.

Days 1 to 3, borne by the employer, at 100 %: 66,666.67 × 3 = 200,000. Days 4 to 10, borne by the EPS, at 66.67 %: 66,666.67 × 7 = 466,666.67, and that amount multiplied by 0.6667 gives 311,133. The total recognised is 511,133.

The last calculation is the one almost nobody does and the one that explains the claim. Had the employee worked the ten days, the payout would have been 666,667. It is 511,133. The difference, 155,534, is the third of the base lost across the seven days the EPS pays. It is not a company error or a deduction: it is the effect of the percentage.

The same case as a work accident

The same 2,000,000, the same 10 days, the same employee. The origin changes: instead of ordinary illness, it is a work accident. Now the ARL pays from day 1 and at 100 %. There is a single calculation: 2,000,000 / 30 × 10 = 666,667.

Compare the two outcomes. The employee receives 155,534 more for the same time away from the job. The company pays 200,000 less, because it does not take the first three days. The event is identical in duration and different in origin; the economic effect flips for both parties.

What happens to vacation, service bonus and severance during sick leave

During sick leave no vacation accrues for those days. Vacation entitlement feeds on time actually worked, and a sick-leave day is not that. What does happen is that vacation already accrued is preserved: sick leave does not erase rest the employee has already earned.

That rule has an accounting consequence that shows up months later. If the company keeps accruing vacation as if the person had been at the job, it builds a liability that does not correspond and discovers it when the employee leaves and the final settlement is done. Fixing it then costs more than doing it right at the time.

With the service bonus and severance (cesantías) the brief does not fix a single rule, so improvising is a bad idea. The recognised amount enters the payroll for the period and its effect on each accrual depends on how the settlement was configured. Before deciding, confirm with your accountant how that payment is reflected in each accrual; it is a ten-minute conversation that avoids an adjustment spanning several months.

What is not open to argument is treating the days as an absence. They are not deducted from the attendance bonus if the company has one, and they are not flagged as a no-show. Deducting them is the mistake that turns into a claim fastest, because the employee sees it on the payslip and has the certificate in hand.

The employer's duties: report, file and pay on time

The company has three fronts and none of them is optional. First, report the accident to the ARL: that report is what activates coverage and fixes the date of the event. Second, manage the sick leave before the EPS: file the certificate and follow up until the benefit is recognised. Third, pay on the usual date the days that correspond to it.

The file is what sustains all of the above. The sick-leave certificate, the accident report, the filing and the responses from the EPS or the ARL must stay on record. When the case is argued a year later, the company with a complete file argues about criteria; the one without it argues about whether the event happened at all.

One point of judgement: it is not advisable to make the employee's payment conditional on the EPS reimbursing first. They are two different moments, and mixing them leaves the employee without income over a procedure the employee does not control.

The employee's duties: the certificate and contributions up to date

The employee provides the sick-leave certificate; without that document the company has no support to pay or to file. A late delivery delays the whole circuit and opens the argument about who assumes the lost time. The practical recommendation is to set an internal deadline in writing and state it in the internal rules, rather than improvising case by case.

The other requirement belongs to the system, not the employee: to recognise the benefit the EPS requires contributions up to date and the certificate. A company that files with contributions in arrears receives an objection and payment stops, even if the sick leave is legitimate and the certificate is in order. Arrears do not only hurt the company: they leave the employee waiting for money that should already have been received.

Dismissal, protected status and the risk of deciding in the heat of the moment

An employee cannot be dismissed for being on sick leave or for their state of health. Doing so exposes the company to compensation and a penalty. The prohibition does not depend on whether the sick leave is short or long: health status is not a valid cause for terminating the contract.

In certain cases the employee retains protected status, and there the company's room to manoeuvre narrows further. Where protection applies, dismissal is not resolved by paying compensation: the validity of the termination itself is argued. That is why these cases become expensive even when the company believes it has arguments.

The pattern repeats every time. The company needs to replace the person, someone suggests terminating and rehiring once they recover, and the conversation happens in the very week the certificate is in force. That is the worst possible moment. If the replacement is urgent, the route is different: a temporary replacement, a temporary assignment or a redistribution of tasks, with the relationship intact.

Mistakes that end in lawsuits

Mistakes on this subject are not found in the audit, they are found in the claim. Almost all have the same shape: a decision taken quickly, in payroll, without checking the support. These are the ones that repeat most and what they cost.

There is one procedural mistake that feeds all the others: leaving no trace. The company that decides by phone, pays without filing and archives nothing is left with no defence when the case is reviewed. Documentation is not bureaucracy; it is the only proof that the decision was the right one.

An honest close before deciding

This text is not legal advice and does not replace review by a labour lawyer or by your accountant. The percentages and weeks cited are those of the brief behind this article; values and calendars that change every year must be checked against the value in force for the year the case occurs.

There are situations where this does not apply as written. If the origin is in dispute — an accident reported as an illness, or the reverse — the problem stops being a payroll one and becomes a matter of classification, with medical and legal criteria. If contributions are in arrears, the circuit breaks before it starts. If the employee has protected status, any decision about the relationship needs prior review.

What you can do today, without depending on anyone, is put the file in order: certificate, report, filing and response, case by case. When payroll, accounting and inventory work on the same data, that order sustains itself; Kardex Tauro covers those three areas for Colombian small and medium businesses and leaves the employment file where your accountant can find it.

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