On March 20, 2026, Law 513 was enacted, creating a new Internship Program aimed at encouraging the formal incorporation of young individuals into the private sector in Panama. The law establishes a specific legal framework intended to facilitate early workforce integration and the development of practical skills through structured learning experiences within private companies.
The program is voluntary and is designed for students and young individuals undergoing academic or technical training, allowing their participation under a structure distinct from a traditional employment relationship. In this regard, the Law expressly provides that internships do not constitute an employment relationship and therefore do not generate labor rights or employment benefits associated with an employment contract.
Participants will receive a monthly compensation of US$450.00, which the Law defines as a subsidy rather than salary. Consequently, such amount will not be subject to social security contributions or tax deductions and may be treated as a deductible expense for tax purposes by participating companies.
Law 513 also establishes specific parameters for the implementation of the program within the private sector. Internships may have a maximum duration of one (1) year, with schedules of up to forty (40) hours per week. In addition, limits are established regarding the number of interns companies may incorporate, depending on the size of their workforce, ranging from two (2) interns to a maximum equivalent to 3% of the total workforce in larger companies.
Companies must ensure that internships maintain a strictly educational nature and may not use them to replace existing employees or fill permanent positions. Additionally, companies will be required to execute a participation agreement with the intern and maintain occupational risk insurance coverage.
The Ministry of Labor and Workforce Development (MITRADEL) will oversee the supervision of the program, including registration, monitoring, and the handling of complaints. Upon completion of the internship period, companies must issue a certification of participation, which will be recognized as work experience.
Law 513 represents a new regulatory framework for the incorporation of young individuals into Panama’s labor market through structured training schemes within the private sector.
Read the Official Gazette: HERE
