BOGOTA, Colombia — (AP) — Colombian President Gustavo Petro signed into law on Wednesday a controversial labor overhaul with the potential to profoundly shift the balance of power from employers to workers, a key victory for the left-wing leader even as Congress compelled him to scale back his more radical ambitions.
The enactment of the law marks a milestone for a president who has struggled to deliver on his promises to reduce inequality in one of the region's most unequal nations. But it's faced opposition from business leaders and Colombian government bonds have suffered as markets worry about the fiscal and economic effects.
The law increases overtime pay for salaried workers and limits the use of short-term contract workers, while requiring companies to provide medical coverage and social security for gig workers like food delivery drivers. It also promises student interns proper contracts and benefits like vacation time and severance pay.
Many of Petro's efforts to vastly expand social programs have stalled in Congress, with lawmakers shooting down this labor law twice. Lawmakers let the legislation squeak by last week after Petro's moved to call a public referendum.
Petro signed the legislation at the historic home of 19th-century war hero Simón Bolívar, who led South America's fight against imperial Spain.
He posted on social media platform X: “I sign the labor reform into law before Bolívar and the working people.”
“We must elect a government that will uphold this law and enforce it,” Petro said, alluding to the 2026 presidential elections.
The reform was cheered by trade unions and Petro's political allies Wednesday.
But his push to strengthen worker protections has proved controversial, as the expensive benefits are expected to hike up costs for business owners. Petro’s government has promised to push through a new bill to help small businesses, though the details remain unclear.
Opposition lawmakers have painted a nightmare scenario of mass layoffs that will push more workers into Colombia’s already vast informal economy.
Many say that the mandated reductions in working hours, increases in overtime pay for Sunday and holiday shifts will especially squeeze small and medium-sized businesses.
Already, his government’s increased spending and reduced tax income have challenged fiscal stability.
Critics also say that the changes won’t help informal workers without contracts, who represent over half of Colombia’s total labor force, according to the latest figures. The legislation guarantees health and pension benefits for only some gig workers, such as app-based delivery workers.
Then there’s the question of compliance. “I want to tell those employers who say they won’t implement the labor reform that they’re not intelligent,” Petro said on Wednesday.
Even as he hailed the law, it fell short of Petro's ambitions. He was forced to compromise on some key provisions to push it through a hostile Congress.
Provisions stripped from the final version included extended paternity leave, paid leave for women with debilitating menstrual pain and some collective bargaining rights for unions.
The signing of the law comes at a tumultuous time for the third largest nation in Latin America, with a wave of bombing attacks shaking the northeast and an assassination attempt on conservative presidential hopeful and senator Miguel Uribe stunning the country. Uribe remains in intensive care.
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