The recent reform to Panama’s Social Security Law has had a significant impact on both employers and employees. This legislative update aims to strengthen the financial sustainability of the Caja de Seguro Social (CSS) and improve the medical and financial benefits available to insured individuals.
Among the most notable changes are the gradual increase in the retirement age and the new contribution rates that will affect both workers and employers. These adjustments seek to address the financial pressure facing the system due to an aging population and shifting demographic trends.
In addition, the reform introduces enhanced enforcement mechanisms to reduce evasion and avoidance of contributions. Employers will now need to be even more diligent in meeting their obligations, as penalties and surcharges have been updated and increased.
Another important aspect is the expanded coverage for certain groups of workers, including improvements in access to medical services, sick leave, and disability benefits. This represents a significant advancement in labor rights and social protection in Panama.
At FAB Abogados, we strongly recommend that all our clients review their internal compliance policies and make the necessary adjustments to their payroll systems. Our firm is providing specialized legal advisory to ensure proper implementation of these reforms and to help mitigate any legal risks.