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.

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Currency

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

Capital

Panama City

Official language

Spanish

Salary Cycle

Monthly

Our Employment Guide in Panama

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Paid Time Off Policy in Panama

Both full-time and part-time employees in Panama are entitled to 30 calendar days of paid time off (PTO) annually. This benefit accrues at a rate of 2.72 days per month. After completing 5.5 months of continuous service, employees become eligible for 15 calendar days of vacation leave.

National Public Holidays

Panama recognizes 8 official public holidays throughout the year. These include:

New Year's Day (January 1st)
Martyrs' Day (January 9th)
Carnival Monday and Tuesday
Good Friday
Labor Day (May 1st)
Independence Day (November 11th)
Christmas Day (December 25th)

Practical Implementation for International Employers

Companies like SailGlobal often implement these policies through automated HR systems that track accruals and eligibility. For multinational organizations, understanding local leave regulations is crucial for compliance and employee satisfaction. Many businesses supplement these mandatory benefits with additional leave options to remain competitive in the global talent market.

Comparative Regional Perspective

Panama's PTO provisions are relatively generous compared to other Latin American countries. For instance, neighboring countries typically offer between 15-20 days of annual leave. This makes Panama an attractive location for international talent seeking better work-life balance arrangements.

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