The Internship Program: what it means for your company

Law 513 of 2026 and its implementing regulations under Executive Decree No. 1 of 2026.

Law 513 of 2026 responds to a familiar circle: without experience there is no job, and without a job there is no way to acquire experience. A young graduate from secondary school, ITSE, INADEH or university competes for vacancies that almost always require years of a track record no one has given them the chance to build.

The law does not stand alone. It continues a line of public policy that includes Law 4 of 2018, promoting decent work for young people, and Law 121 of 2019, which created the Aprender Haciendo project and the Mi Primer Empleo Program. Its foundation lies in article 64 of the Constitution, which entrusts the State with promoting conditions of access to employment, and in ILO Convention 122 on employment policy, to which Panama has been a party since 1970.

As of 31 August 2026, the legal framework of the Internship Program created by that law is complete. Your company may now take on young people between 18 and 25 years of age for a stipend of B/.450.00 per month, without this giving rise to an employment relationship or to social security contributions. Participation is voluntary. Below is what you need in order to decide.

In four lines

• Direct cost: B/.450.00 per month per intern, plus an insurance policy.
• It is not salary: no CSS contributions, no statutory benefits, no tax withholdings.
• The amount paid is a deductible expense for the company.
• Maximum duration: one year per intern; the Program runs until March 2029.

How many interns may you have?

It depends on the size of your payroll as registered with the CSS:

Need more? You may request an exception authorization from MITRADEL. If it is not issued within 30 days, it is deemed granted.

What the company takes on

1. Insurance policy. Before the internship begins, the company must take out an occupational risk or accident policy with an insurer authorized in Panama. The intern is not covered by the CSS occupational risk regime.

2. Enrollment and online registration. The company registers on the MITRADEL portal with its notice of operation (issued at least one year earlier), tax and social security clearance certificates (or payment arrangement), the current payroll and a copy of the policy. Each intern is registered individually and the internship may not begin without the participation agreement on file.

3. A designated tutor. Someone on your team guides, supervises and assesses the intern, and delivers an induction at the outset.

4. Quarterly reporting. Data must be updated on the portal within 15 days following the close of each quarter.

5. Certification at closing. At the end, the company issues a certificate stating duration, areas, functions and competencies, recognized as work experience for all purposes.

6. The underlying limit. An intern may not replace a formal position or cover permanent operational needs. Doing so carries a fine of B/.250.00 to B/.500.00 and, on repeat breach, suspension from the Program.

Hours of work: a maximum of 40 hours per week, on day or mixed shifts Monday to Friday, and day shifts only on Saturdays. Overtime, public holidays and days of national mourning do not apply.

Is it right for your company?

The Program tends to pay off where several of these conditions hold:

• You have support functions with genuine training value, distinct from those of a permanent role.
• You recruit junior profiles regularly and want to assess them before hiring.
• You have supervisors willing to take on the tutor role.
• You are current with the tax authority and the CSS, or have a payment arrangement in place.
• Your notice of operation was issued more than a year ago.

If the vacancy you have in mind is a permanent position in disguise, the Program is not the route. The law expressly prohibits it and labor inspectors may visit the internship site to verify compliance.

What does not change: Law 513 does not affect internships, professional practice or social service programs run by universities and schools, nor the Mi Primer Empleo Program under Law 121 of 2019. They are parallel schemes and may coexist.

What the young person receives

• An income while training, with nothing withheld.
• An assigned tutor who guides and assesses them, not just a desk.
• A certificate from the company that the law recognizes as work experience for all purposes.
• A way in: if the company offers employment at the close, it is formalized by contract under the Labor Code at no less than the legal minimum wage.

MITRADEL has also taken on an active promotional role: it will publicize the Program in public and private schools, with emphasis on final-year secondary students, and will publish an annual report with implementation statistics. For the participating company that means a flow of candidates with institutional support behind it, and a contribution to youth training that is genuinely measurable.

Would you like to assess it for your operation?

We can review your payroll and current vacancies to determine how many interns you may take on, and prepare the enrollment documentation before MITRADEL. Contact us at info@lovill.com.

Legal basis

This publication provides a high-level summary and does not constitute legal advice, nor does it create an attorney-client relationship. The application of these rules depends on the circumstances of each company.