Teleworking Law


Panama enacts Law regulating Teleworking

Through Law 126 dated February 18, 2020, published and in force since February 19, 2020, the Republic of Panama regulates Teleworking as a recognized modality of the employment relationship.

Teleworking has been defined as the providing of labor without physical presence in the workplace, through computers, telecommunications and similar means, through which control and supervision of the work is also exercised. The work can be carried out from the workers own home allowing them to perform the labor via information, technology and telecommunications.


The modality of Teleworking can be agreed upon at the beginning of the employment relationship or later, if the worker accepts it. The parties will agree on what is necessary for the cessation of work under the modality of Teleworking.

The employment contract must state the voluntary nature of Teleworking, its reversibility and the manner in which it will be provided. It will also include a description of the equipment that will be provided by the employer and the description of the protection of data, information and files. The employer must subsidize the speed of the worker's home internet network in case a higher speed than the basic speed offered is required. The employer will also cover other work-related costs, which will not be considered as salary in respect to the worker’s compensation calculations.


Despite providing work remotely, the economic dependence and legal subordination of the employment relationship is fully recognized. The right to compensation by the Social Security Fund is recognized for work-related accidents, as are all rights and obligations established in the Labor Code. The new Law modifies the Labor Code to allow salaries to be paid by bank wire transfer, provided that the worker can open or use his own account, and there is availability of a nearby ATM.

Teleworking may be partial, when the worker is at least one day a week in the employer's premises, or complete, when the worker is always in a place other than the employer's premises. It also establishes a special regime for emergency work, called "On Duty", with payments made in accordance to the surcharges established by the Labor Code.

The creation of this law promotes the development of work through information and communications technologies (ICT), allowing the use of resources, tools, equipment, software, applications, networks and media that permit the compilation of processing and transmission of information such as voice, data, video text and images. Author: Joaquín De Obarrio

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