All About Employee Leave & PTO in Panama
Learn what you need to know about leave requirements in Panama and how Justworks EOR can help streamline hiring.
How an EOR Can Help with Employee Leave & PTO
Before hiring in Panama, it’s important to understand the country’s labor standards for time off and paid leave. These benefits are legally enforced and keep employees happy and your business compliant.
Justworks helps you comply with Panama’s leave and PTO requirements by managing time-off policies through our EOR service. From sick leave to maternity benefits, we handle the local complexity, so you can focus on your team.
Employee Leave & PTO Expectations in Panama
Panamanian law offers generous leave protections, including paid vacation, state-subsidized parental leave, and public holidays.
Vacation Leave
Employees are entitled to 30 calendar days or 22 business days of paid annual leave after completing 11 months of continuous work. Vacation must be taken within the following year and is paid at the employee’s regular salary rate.
Sick Leave Â
Employees are entitled to 18 paid sick leave for illness or injury, provided they are covered by Panama’s Social Security Fund (CSS). Medical certification from CSS is required. Employees receive sick leave compensation through their employer for the first three days, then CSS covers the remaining days.
Maternity LeaveÂ
Pregnant employees are entitled to 14 weeks of paid maternity leave, six weeks before the due date and eight weeks after childbirth. Before taking leave, pregnant employees must provide medical certification for time off approval. The CSS provides pregnant employees full compensation for maternity leave.
Paternity Leave
New fathers are entitled to three working days of paid paternity leave following the birth of a child. This leave must be taken immediately and is paid by the employer.
Other Types of Leave
Panama labor law provides for additional leave, including:
Public holidays: 12 national public holidays per year
Bereavement leave: Three days paid
Marriage leave: Three days paid
Union activities and civic duties: Special leave as authorized by law
Leave for professional exams (in some cases): Two days per exam for university or technical students
Public Holidays in PanamaÂ
Panama recognizes 12 official public holidays, including:
New Year’s Day – January 1
Martyrs’ Day – January 9
Carnival Tuesday – February/March (date varies)
Good Friday – Date varies
Labor Day – May 1
Independence Day – November 3
Flag Day – November 4
Colon Day – November 5
First Call for Independence – November 10
Independence from Spain – November 28
Mother’s Day – December 8
Christmas Day – December 25
Note: If a holiday falls on a Sunday, it may be observed on the following Monday.
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