Doing business in Guatemala empowers firms to take advantage of a large, growing economy that’s rimmed with an increasing number of free trade agreements and a welcoming investment environment for foreigners.

Another prime benefit of Guatemala for doing business is a young, trainable workforce. Your organization relies on the strength of its team, and that’s why probation periods for new employees remain so critical.

In this guide, we discuss probation laws in Guatemala and the rights and responsibilities companies have when using them.

Definition of a Probation Period in Guatemala

Guatemala allows probation periods at the beginning of all indefinite-term contracts. It’s locally known as a “periodo de prueba” and is regulated under Código de Trabajo, Decreto 1441. These periods allow employers to evaluate the skills and cultural fit of their new hires, while employees can see whether the role fits their expectations.

Under Guatemalan law, the maximum probation period is two months. Like in other countries, employers are free to terminate the relationship during the probation period without cause and without paying any severance. The only requirement is to provide notice of the termination in writing.

All probation periods must be outlined in writing within the employment contract itself. If there’s no probation clause in place, the law will count the relationship as starting with a formal indefinite-term contract from day one.

Note that fixed-term contracts for temporary, project-based, and seasonal work may also include probation periods, but the same two-month probation period applies.

Lengths of Probational Periods in Guatemala

Probation periods may be no longer than two months, or 60 calendar days, as outlined in the country’s labor code. It’s a limit that applies to every employment role, regardless of qualifications or seniority.

Companies may only consider a probation period legally recognizable if it’s formally written into the employee’s employment contract at the time of hiring. Without it, the contract is automatically considered indefinite from day one, which provides all the employment rights of permanent staff.

Permanent or Indefinite Contracts

Permanent contracts allow for a two-month probationary period for employees in Guatemala. Workers automatically receive the legal rights and protections provided under Guatemalan law, but the ability to terminate the contract is far more flexible.

Employers don’t have to provide any prior notice or offer severance pay if they wish to terminate the relationship during the probation period. If the probation period concludes without a termination, the contract is automatically converted into a full indefinite-term contract. No registration or form-filling is needed by either side.

Fixed-Term or Definite Contracts

Fixed-term contracts are ideal for time-bound projects, such as seasonal work. However, the maximum two-month limit continues to apply. The contract length does not impact how long the probation period can be, unlike in other countries.

For example, even if the contract is a mere three months, employers could still impose the same two-month probation period, as they would with indefinite-term contracts. Note that rehiring the same worker within a short period does not allow employers to restart the probation period. This is to prevent unscrupulous companies from using trial phases to avoid their employment obligations.

Legal Considerations for Probation Periods in Guatemala

The Guatemalan Código de Trabajo (Decreto 1441) defines all the legal aspects of probation periods. It’s enforced by the Ministerio de Trabajo y Previsión Social and protects the rights of workers while offering clarity and fairness to businesses.

Regulations in Guatemala focus on the concept of good faith, ensuring that companies are using it to legitimately evaluate workers, rather than as a way to circumvent employment regulations.

Pay and Working Conditions

All probationary workers are entitled to receive the relevant minimum wage. In Guatemala, the minimum wage differs depending on the sector and region of the country. Each year, the minimum wage increases, which is controlled by the Consejo Nacional del Salario Mínimo.

As of this writing, the monthly minimum wage in the Department of Guatemala is Q3,347.21 per month for export/maquila workers and Q3,800.60 for all non-agricultural workers in this area. In the rest of the country, the monthly minimum wage is set at Q3,436.86 and Q3,550.60 for agricultural and non-agricultural workers, respectively.

In Guatemala, the standard working hours are eight hours per day, six days a week, with 30-minute breaks mandated for all workers with shifts of more than six consecutive hours. Outside of regular work hours, overtime is paid at 150% the usual rate. In contrast, workers must be paid 200% of their usual salary if required to work on designated public holidays.

Note that night shift workers may only work 36 hours a week, or six hours per day. Mixed shifts can only cover 42 hours a week, or 7.5 hours per day.

Social security contributions are also required and must be paid to the Guatemalan Institute of Social Security (IGSS). Employees pay 4.83% of their salaries, whereas employers contribute 10.67% of the workers’ salaries.

Additionally, 1% of each employee’s salary must be paid to the Guatemalan Technical Training Institute (Intecap) and the Institute of Recreation of Workers of the Private Company of Guatemala (IRTRA).

Termination and Notice

Probationary workers may be terminated at any point during the probationary period. Companies are not required to prove cause, provide notice, or offer severance pay. However, the decision must be made in good faith. The only form of notice is a formal written document stating that the employee is being terminated.

Employees still have to be paid for all of the days they actually worked. Interestingly, Guatemalan law doesn’t require employers to pay the following if a probationary employee is terminated:

  • Proportional vacation pay
  • Bonuses
  • Severance

Vacation / Holidays

Guatemala has as many as 19 public holidays. However, not all these holidays are necessarily recognized days off because they fall within the annual leave period. Generally, only 12 of these days provide employees with a day off.

Examples of holidays in Guatemala include Maundy Thursday, Assumption Day, and All Saints Day. Note that employees can be asked to work on public holidays, but they must be paid double their usual rate.

All public holidays are classified as independent from vacation time. As standard, employees are entitled to 15 paid working days of vacation time every year after they’ve completed a full year of service. Essentially, a second-year employee receives 27 paid days off each year (12 + 15).

In Guatemala, vacation time must be provided in uninterrupted blocks. By mutual agreement, it may be split into a maximum of two distinct segments.

Benefits of Probation Periods in Guatemala

Probationary periods benefit both employers and employees when used in the way they were intended. Here are the advantages of leveraging probation periods in Guatemala:

  • For Employees

Employees receive a formal period where they get to experience their new work environment and decide whether it meets their expectations.

Employees gain the flexibility to walk away from a role if they choose to resign during their probation, while still receiving wages for all days worked.

Employees still have the same rights and protections under the law from the first day of probation.

  • For Employers

Employers can evaluate a worker’s performance before committing to a permanent contract. It allows them to walk away if the relationship does not match the expectations of both sides.

Employers gain more flexibility over termination, allowing them to terminate probationary employees without pay, severance, or notice.

Employers don’t take on the financial and legal risks of hiring somebody new during the probationary period because of the flexibility they have to terminate unsuitable hires.

Conclusion

Guatemala represents the best of the up-and-coming part of Central America. International businesses have a prime opportunity to take advantage of a young, skilled workforce. Of course, Guatemala still has a robust range of employee protections, and managing those issues can be difficult for new entrants into this market.

Hiring top talent is the bedrock of any successful company, but sourcing it is a challenge. At Remote People, our consultants support you in not only managing the local labor laws but also hiring and onboarding your talent, so you can focus on running your business.

Schedule your consultation with one of our Guatemala hiring consultants to get started today.

Frequently Asked Questions

Probation periods aren’t mandatory. Employers are free to hire people and start them on an indefinite-term contract immediately. Probation periods are only legally valid if they are expressed in writing within the employment contract itself, per the Guatemalan labor code.

The maximum probation period is 60 calendar days in Guatemala. These apply to indefinite-term and fixed-term contracts alike. Under the law, any repeated trial periods or periods longer than 60 days are not recognized or enforceable in Guatemala.

Yes, employers are entitled to terminate employees at will during the 60-day probation period. No notice, cause, or severance is required. The only formal procedure employers must go through is providing evidence of termination in writing.

Guatemalan workers all receive the same rights and legal protections, including during their probation periods. It includes the right to the minimum wage, pension contributions, and holiday pay. Note that probation workers aren’t entitled to vacation bonuses or severance pay if they’re terminated before the end of their probation.