The Agreement in question, published on January 16, 2023, repeals Agreement 1123 of the Board of Directors of the Guatemalan Social Security Institute, which regulated the registration of employers.
As a consequence of this repeal, as of January 16, 2023, the exemption enjoyed by salaries paid to legal representatives registered in the IGSS and who were also shareholders of corporations disappears.
The new Regulation for Registration in the Social Security Regime creates the Single Social Security Registry and establishes the mandatory registration for all employers and workers. That is to say, registration is mandatory for the sole condition of being an employer (previously there was an obligation to register as from 3 workers), except for exceptions contained in other regulations issued by the social security.
For the construction sector, the regulation establishes that the owner of the building will have the status of employer when there is no construction contract. The contractor will have the status of employer as long as there is a written contract.
When the employer is not registered, the IGSS may make the registration ex officio and it will be understood that the salaries paid to the workers have been 35% of the total value of the work.
In the agricultural sector, the lessee of a farm is defined as an employer for the term of the lease.
Finally, employers must register within 30 days after the agreement becomes effective. The agreement became effective on January 16. Employers already registered do not need to take any further action.
For further information, please contact our Labor Law specialist, Federico Zelada at fzelada@consortiumlegal.com.