The implementation of the new Internship Law in Panama introduces an alternative that allows young people to gain experience in private companies while enabling organizations to actively participate in their professional development.
With Law 513 of March 20, 2026, and its subsequent regulations, Panama establishes a specific legal framework for this type of internship. For companies, including those located in Colón and the Colón Free Zone, understanding the conditions of the program is important before bringing young people into their organizations under this arrangement.
Although an internship does not constitute a formal employment relationship under this law, it does create certain obligations for participating companies.
What does the new Internship Law in Panama establish?
Law 513 creates the Internship Program as an initiative designed to facilitate the entry of young people into the labor market through practical experience within the private sector.
The program is primarily intended for young people between 18 and 25 years of age from secondary schools, universities, and vocational or technical training institutions. It also provides for certain cases involving individuals under the age of 18 who have already obtained a secondary education diploma.
Participation by companies is voluntary and takes place under the supervision of the Ministry of Labor and Workforce Development (MITRADEL).
How much must a company pay an intern in Panama?
One of the factors companies should consider before joining the program is its cost.
Participating companies must provide interns with a monthly allowance of B/.450.00 throughout the internship period.
Under Law 513, this allowance is not considered a salary and is not subject to tax or social security deductions. However, the company must additionally obtain a private insurance policy covering occupational risks to which the young participant may be exposed during the internship.
The law also allows the amount paid to the intern to be reported by the company as a tax-deductible expense, in accordance with the provisions established in the law.
Does an internship create an employment relationship between the company and the young participant?
This is likely one of the most important issues for companies.
Law 513 establishes that participation in the Internship Program does not constitute an employment relationship.
However, this does not mean that internships may be used to replace regular employees or indiscriminately fill positions that should otherwise be subject to an employment contract.
How long can an internship last?
An internship may last for up to one year, while the participant’s work schedule may not exceed 40 hours per week.
The terms of participation must be established through the corresponding agreement between the company and the young participant, using the instrument established by MITRADEL.
At the end of the internship period, the company must issue a certificate confirming the experience acquired by the participant.
How many interns can a company have?
The permitted number depends on the size of the company’s workforce.
Organizations with up to 50 employees may incorporate up to two interns; those with between 51 and 100 employees, up to four; companies with more than 100 and up to 200 employees, up to six; and companies with more than 200 employees may incorporate interns representing up to 3% of their workforce.
The regulations also provide the possibility of requesting authorization from MITRADEL to exceed these limits when justified circumstances exist.
Internship Law and Mi Primer Empleo: Are they the same?
No.
This is an issue that may create confusion among employers.
The new Internship Law does not eliminate the Mi Primer Empleo Program. Law 513 itself establishes that its provisions do not affect or limit professional internships carried out by educational institutions or the program created under Law 121 of 2019.
Therefore, different mechanisms currently exist to promote the integration of young people into the labor market.
One important difference lies in their financial structure. Under the new Internship Program regulated by Law 513, the company assumes responsibility for the B/.450.00 monthly allowance and the corresponding insurance policy.
Under Mi Primer Empleo, the program maintains a different participation structure between the Government and the company, subject to its own conditions and requirements.
Before incorporating a young person under either of these arrangements, companies should correctly identify which program will be used and which obligations apply to the employer.
What should companies in Colón review before incorporating interns?
For a company located in Colón, Panama, participating in an internship program may represent an opportunity to develop young talent and cultivate future employees. However, the process should be implemented under clearly defined parameters.
Before starting, companies should verify the applicable arrangement, the participation agreement, the duties the intern will perform, the schedule, the financial allowance, occupational risk coverage, and the number of interns permitted based on the size of the organization.
It is also important to correctly distinguish an internship from an ordinary employment relationship, particularly when the duties assigned to the young participant form part of the company’s regular operations.
Proper structuring from the outset can help reduce potential liabilities and facilitate compliance with the obligations established under Panamanian law.
Labor Compliance for Companies in Colón, Panama
Incorporating young people through internship programs can represent an opportunity both for companies and for individuals seeking to obtain their first professional experience. However, it is important to understand that each arrangement has different requirements and legal consequences.
Before implementing an internship program in Colón or anywhere else in Panama, companies should carefully review the conditions established by Law 513, its implementing regulations, and the applicable provisions issued by MITRADEL.
At Coronell, Lam & Asociados, we provide legal counsel to companies in Colón, Panama, on labor, contractual, and legal compliance matters, helping them evaluate their obligations and prevent potential liabilities in their relationships with employees and participants in workforce training programs.
Is your company considering bringing in interns or young participants through Mi Primer Empleo? Contact us to review the applicable arrangement and the obligations your company should consider before beginning the process.
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