The settlement is a benefit to which every employee is entitled when their employment relationship with their employee is terminated. This includes different concepts such as outstanding salaries, social benefits, parafiscal contributions, social security contributions, vacations, and compensation in certain cases.
(Also read: How can you settle your contributions online? We tell you).
The term that the employee has to make this payment is a subject of wide debate. According to Leonardo Mejía, director of Mejía López Abogados, for the El Empleo portal, there is no specific law that determines a term for the recognition and payment of the liquidation of social benefits, as this depends on how the employment relationship is concluded.
According to the expert, if the termination of the contract is by dismissal, mutual agreement or expiration of the term of duration, the payment must be made on the last day worked by the employee or, at the latest, the following business day.
On the other hand, Mejía distinguished, if the employment relationship ends due to the resignation of the worker without prior notice, the company could take up to three business days, time considered reasonable to process the necessary documentation, verify discounts, pending vacations, and even budget availability.
(Keep reading: Layoffs: what are they and how many types of them are there? We will tell you).
Employees have the obligation to give a settlement to their workers, once the employment contract ends.
But, what happens if the company takes too long to carry out the liquidation? According to article 65 of the Substantive Labor Code, in case of unjustified delay in the recognition and payment of the liquidation, a ‘moratorium compensation’ is applied.
This means that the employee must pay one day’s wages for each day of late payment of amounts owed, up to the day the payment is made.
Even if the company enters a reorganization process or is liquidated, the employees maintain their rights on the liquidation, since labor debts have priority in payment.
(Of interest: Labor compensation: these are the conditions under which it is paid and the term).
If a worker is in the situation of not having received his final settlement of social benefits and vacations, he can submit a letter requesting their recognition and, eventually, initiate an ordinary labor process, seeking full payment plus the late payment.
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*This content was made with the assistance of artificial intelligence, based on articles from El Empleo, and was reviewed by the journalist and an editor.
