Bill 342.

Summary.

The bill creates an Internship Program for young people who are studying or have completed secondary, university, vocational, or technical education and are between eighteen and twenty-five years of age, or are minors holding a secondary education diploma. Its purpose is to enable them to develop skills and practical experience in businesses or nonprofit entities, apply for formal employment, and contribute to reducing unemployment in the Republic of Panama (República de Panamá). Participation by domestic or international businesses and nonprofit entities established or based in the country would be voluntary.

The number of interns would depend on workforce size: up to two for a workforce of up to fifty people; up to four for fifty-one to one hundred; up to six for more than one hundred and up to two hundred; and a maximum of three percent (3%) of the workforce for two hundred or more people. Hosts could not replace formal jobs with interns. The applicable limit would be based on the payroll registered in the current month or the month before the application, as appropriate. A host seeking to exceed that limit would have to submit a substantiated formal request to the Ministry of Labor and Labor Development (Ministerio de Trabajo y Desarrollo Laboral) for evaluation under the implementing regulations.

An internship would last no more than one year and would create neither an employment relationship nor the employment benefits and other social rights associated with one. The intern would receive minimum monthly compensation of four hundred fifty balboas (B/.450.00). The bill provides that this payment would not constitute wages or be subject to tax or social security deductions; the host could report the amount paid as a deductible expense. The terms would appear in a participation agreement prepared by the Ministry of Labor and Labor Development and signed by both parties. The internship would comprise forty hours per week. The host would purchase occupational risk insurance because the intern would not receive that coverage from the Social Security Fund (Caja de Seguro Social).

If the host offers employment when the internship ends, it would have to enter into an individual employment contract under the Labor Code (Código de Trabajo), at no less than the legal minimum wage. Employment of a minor would require consent from a parent or legal representative. The host would issue a certificate of the internship period, recognized as experience for employment purposes. The Ministry of Labor and Labor Development would implement, administer, and supervise the program, maintain a register of participants, and receive information every three months on interns entering and completing it. The program would last three years and could be extended only once by executive decree for three additional years. The Executive Branch (Órgano Ejecutivo) would issue implementing regulations. The proposed law would be declared a matter of public order and social interest and would take effect the day after its promulgation. Its provisions could concern the Ministry of Labor and Labor Development, the Social Security Fund, businesses, nonprofit entities, young people in education, and insurers.