Panama Employment Guide

Panama is located in Central America, connecting the Atlantic Ocean and the Pacific Ocean. It holds an important strategic position in international trade due to the Panama Canal. With a population of approximately 4.3 million, its economy is dominated by services, logistics, banking and finance, transportation, and tourism. Panama City, the capital, serves as the political, economic, and cultural center. Panama’s labor laws require employment contracts to be in writing, with a standard 48-hour workweek. Employers are obligated to provide a minimum wage, social insurance, and paid leave. Dismissals must comply with legal procedures and involve compensation payments to employees. The country has a relatively well-established labor relations system, is friendly to foreign-funded enterprises, and maintains a stable employment environment.

Check recruitment costs

Currency

Panamanian Balboa (PAB) and United States Dollar (USD)

Capital

Panama City

Official language

Spanish

Salary Cycle

Monthly

Our Employment Guide in Panama

Browse the following tags to learn all about hiring employees in Panama

Maternity Leave Policy

Employees who have completed at least 60 consecutive days of service and are pregnant are entitled to 14 weeks of fully paid maternity leave. Four of these weeks must be taken prior to the child's birth. The employee receives 100% of their average salary during this period, with social security covering the payment.

At the employer's discretion, an extension of unpaid leave may be granted.

Paternity Leave Benefits

Employees are eligible for 7 days of fully paid paternity leave, which must be used after the child's birth. The employer is responsible for paying 100% of the employee's average salary during this leave.

Parental Leave Options

Both parents have the right to 12 weeks of parental leave, which can be taken by either parent. This leave must be utilized before the child turns 2 years old and can be taken all at once or in segments, provided it is completed within the first year after the child's birth or adoption.

Sick Leave Entitlements

Employees are entitled to paid sick leave, with durations of either 18 or 36 days depending on their length of service.

Case Study: Implementing Family Leave at SailGlobal

At SailGlobal, we've seen how clear parental policies boost retention. For example, after introducing flexible parental leave, employee satisfaction rose by 30% in one year, reducing turnover costs.

Hire easily in Panama

Compare employee hiring costs across over 100 countries worldwide, helping you accurately calculate labor costs. Try it now

Cost Calculator

Please select the country/region you wish to recruit from, and the calculation can be done with just a few clicks.