OECD Reviews of Labour Market and Social Policies: Colombia 2026

Colombia has seen a notable reduction in labour informality over the past decade, although recent trends suggest that this progress may be losing momentum. By the end of 2025, 57% of workers were not contributing to the pension system, compared to 70% in 2011. Since mid-2024, the decline in informality has halted, however, and rural areas continue to face especially acute challenges, with informality rates reaching 84% in 2025.

A central policy development in the past two years has been the adoption of a comprehensive labour market reform in 2025. This reform represents a major overhaul of the Colombia’s labour framework, with a strong emphasis on improving compliance with labour law and aligning working conditions with OECD standards. Built around the principles of decent work, legal certainty and social justice, the reform introduces wide‑ranging changes affecting employment relationships, enforcement mechanisms, and the regulation of emerging forms of work. It reflects a shift towards a more protective and compliance‑oriented labour regime, combining stricter rules with enhanced enforcement tools.

Complementing these regulatory changes, the government has placed increasing emphasis on strengthening the “Economía Popular”, which refers to small-scale and often informal productive activities. Greater institutional recognition for their contribution to social and economic policy was combined with a mix of financial support, training programmes and improved access to public procurement, as a way to bring informal activities closer to the formal sector and eventually formalise them.

Despite these advances, a key structural driver of informality – the high cost of formal labour – remains largely unaddressed. In fact, labour costs have risen as a result of the labour reform, potentially discouraging formal job creation. The recent stagnation in informality rates, coupled with persistently high levels in rural areas, underscores the need for renewed policy efforts to reduce the cost burden associated with formal employment.

Labour inspection has received a strong push under the current government, with targeted inspections in a few emblematic cases, more and higher imposed sanctions, and larger amounts of collected fines. Administrative efficiency has improved through upgrades to the SISINFO electronic case management system, reforms to the fines collection process, and the consolidation of the FIVICOT fund, all of which have strengthened the traceability and management of sanctions. In addition, the inspectorate has increased its focus on identifying disguised employment relationships and has reinforced the use of Labour Formalisation Agreements as a tool to bring workers into formal arrangements. A revision of the Rural Inspection Model expanded the presence of inspectors in remote and underserved areas.

However, structural constraints continue to limit the overall capacity of the labour inspectorate. The number of inspectors has declined gradually since 2022, and although new recruitment is planned, staffing levels remain below international benchmarks. Budgetary constraints further restrict operational capacity. While the number of inspection visits has increased, the volume of investigations and sanctioning procedures has decreased sharply over the past decade, raising concerns about the deterrent effect of enforcement. Looking ahead, consolidating recent progress will require sustained investment in human and financial labour inspection resources, improved alignment between preventive and corrective enforcement actions, and a renewed emphasis on investigations and timely sanctions. Strengthening these elements is essential to ensure that labour law enforcement effectively protects workers’ rights across all sectors and regions.

Collective bargaining and social dialogue remain very weak in Colombia. Trade union density stood at 4.7% in 2024, one of the lowest levels among OECD countries and below that of regional peers. Nonetheless, recent reforms indicate a move towards a more structured bargaining system. Colombia has begun to develop a two‑tier framework combining sectoral and firm-level bargaining, supported by new regulations for the public sector adopted in 2024 and for the private sector in 2026. Measures have also been introduced to reduce trade union fragmentation, encouraging multiple unions within the same entity to co‑ordinate through unified bargaining teams and work towards single collective agreements.

Despite these steps, significant challenges persist. The OECD recommends further reforms, including eliminating the use of collective pacts, extending the right to strike to higher-level unions, reconsidering restrictions on strikes in essential services – potentially through minimum service requirements – and promoting broader coverage of collective agreements. Expanding conciliation and mediation mechanisms could also help foster more constructive dispute resolution and reduce reliance on arbitration and litigation.

Strengthened social dialogue could, in turn, support a gradual recalibration of Colombia’s relatively high minimum wage, restoring its role as a wage floor rather than a general benchmark. In January 2026, Colombia raised the statutory minimum wage by 23%, far exceeding increases suggested by inflation, productivity, and economic growth, and even surpassing proposals from employers and trade unions. The adjustment aligns closely with a “living wage” estimate by the International Labour Organization (ILO) and continues a broader trend of sharp wage growth, with a cumulative increase of about 75% since 2023. While aimed at reducing poverty, its impact is limited as most working poor are informal. The high minimum-to-median wage ratio also compresses wages and may discourage formal hiring, potentially reinforcing informality.

Finally, Colombia has made important strides in addressing violence against trade unionists, an issue that has long affected the country. The Prosecutor General’s Office has adopted a more institutionalised and strategic approach, combining case prioritisation, specialised units, and enhanced inter-institutional co‑ordination. This has led to measurable improvements in prosecutorial outcomes. Resources for protection programmes targeting trade union leaders have been maintained, and collective protection mechanisms have been expanded. Reforms to public order management, including the transformation of the former ESMAD into the Unit of Dialogue and Maintenance of Order (UNDMO), have also aimed to reduce the excessive use of force during protests and promote dialogue‑based approaches.

Nevertheless, serious concerns remain. In 2025, 12 trade unionists were victims of homicide, an increase compared to the previous two years, although still below earlier levels. Threats against union leaders also persist, even if their number has declined. Addressing these challenges will require continued efforts to identify not only the perpetrators but also the intellectual authors of such crimes, as well as an assessment of existing legal procedures, including the mandatory conciliation phase in cases involving violations of freedom of association and assembly. Sustained commitment in this area remains essential to ensure that fundamental labour rights are fully protected in practice.