Countries › Panama › Guide › 7. Labor and employment › Remote work in Panama: telework under Ley 126 de 2020, written and MITRADEL stamped agreements, reversibility, equipment and connectivity costs

Remote work in Panama: telework under Ley 126 de 2020, written and MITRADEL stamped agreements, reversibility, equipment and connectivity costs

Last verified: 2026-10-29 · Status: Stable

Ley 126 of 2020 regulates telework as a form of employment: it must be agreed in writing at hiring or by addendum, an office based worker may freely refuse it, and the employer may always call the worker back with the notice agreed in the contract. Telework contracts are signed in three copies and stamped by MITRADEL. Employers supply and maintain equipment, pay for above basic internet speeds, agree on other expenses (which are not salary), train the worker and remain responsible for health and safety.

Panama's currency, the balboa (B/.), is at par with the US dollar, which circulates as legal tender; the Superintendencia de Bancos states that the balboa's value is on a par with the US dollar (checked 29 October 2026). USD figures therefore equal the balboa figures.

Key facts

Telework statute	Ley 126 de 2020 Ley 126 de 2020, as of 2026-10-29 · in force
Written telework agreement stamped by MITRADEL required	yes Ley 126 de 2020 arts. 4 and 5, as of 2026-10-29 · in force
Employer provides and maintains telework equipment	yes Ley 126 de 2020 art. 16, as of 2026-10-29 · in force
Employer may require return to the office with agreed notice	yes Ley 126 de 2020 art. 3, as of 2026-10-29 · in force
Exchange rate used for USD conversions	1 PAB per USDBalboa at par with the US dollar (Superintendencia de Bancos), as of 2026-10-29 · in force

The rule

1. Telework is subordinate work performed without physical presence at the workplace using information and telecommunication technology through which control and supervision are exercised. It may be partial (at least one working day a week at the employer's premises) or complete.Ley 126 de 18 de febrero de 2020, arts. 2 and 6, 2020-02-18 official text · verified 2026-10-29

2. The parties may agree telework at the start of the relationship or later by an addendum. A worker hired to work in person may freely accept or refuse a move to telework, and refusal cannot be a ground for dismissal or adverse changes. The employer may at any time require the teleworker to return to the office, giving the notice agreed in the contract or addendum.Ley 126 de 2020, art. 3, 2020-02-18 official text · verified 2026-10-29

3. The telework contract must be written and state at least: its voluntary and reversible nature and the notice to reverse it, whether it is partial or complete, working hours, the worker's statement of adequate facilities, a confidentiality clause covering data handling, the job description, pay terms and the parties' addresses. It is signed in three copies, stamped digitally or physically by MITRADEL, with one copy filed at the Dirección General or a regional office.
Cost to do it: The law sets no filing fee for the MITRADEL stamp.Ley 126 de 2020, arts. 4 and 5, 2020-02-18 official text · verified 2026-10-29

4. Teleworkers are not obliged to work overtime unless the employer requires it and the individual contract provides for it; overtime follows the Código de Trabajo. On call emergency work requires the worker's consent, transport to the premises paid by the employer and payment of hours actually worked with the legal surcharges.Ley 126 de 2020, arts. 7 and 8, 2020-02-18 official text · verified 2026-10-29

5. The parties agree which expenses the employer will cover; those payments are not salary for calculating benefits. The employer must pay the extra cost of internet speed above the basic residential offer when the job requires it, and must provide, install and maintain the equipment and give technical support.
Example: If the job needs a 300 Mbps line and the basic home plan is slower, the employer pays the price difference; a B/.30 monthly home office allowance agreed in the addendum is not salary. / A US$30 allowance is not salary for severance or vacation calculations.Ley 126 de 2020, arts. 10, 11 and 16 numeral 4, 2020-02-18 official text · verified 2026-10-29

6. The employer must train the teleworker on equipment use and occupational risks, is responsible for their occupational health and safety, and must run periodic training on screens, ergonomics and preventive measures. Occupational illness from telework and accidents while traveling to and performing on call work at the premises are covered as work risks.Ley 126 de 2020, arts. 9, 12, 13 and 14, 2020-02-18 official text · verified 2026-10-29

7. The employer must inform the teleworker of data protection policies, equipment use restrictions and any monitoring system, which must be proportionate and never violate personal or family privacy. The teleworker keeps all rights under the Código de Trabajo and must return equipment in good condition when the relationship ends.Ley 126 de 2020, arts. 16, 17, 19 and 20, 2020-02-18 official text · verified 2026-10-29

Item	Rule	Article
Equipment and technical support	Employer provides, installs and maintains	art. 16 numeral 4
Internet above basic home speed	Employer pays the extra cost	art. 11
Other expenses (power, furniture)	As agreed; not salary	art. 10
Transport for on call emergencies	Employer	art. 8
Training on equipment and occupational risks	Employer	arts. 12 and 14

Who pays what in telework, Ley 126 de 2020.

Worked example

A regional headquarters lets an analyst earning B/.3,000 (US$3,000) work from home three days a week, a partial telework arrangement.
The company signs an addendum covering every art. 4 item, gets it stamped by MITRADEL, supplies a laptop and agrees a B/.40 (US$40) monthly allowance that does not count toward vacation, thirteenth month or severance.
A year later it requires the analyst back in the office full time, giving the 30 days' notice agreed in the addendum.

Step by step

Decide whether telework is partial or complete and draft an addendum with all art. 4 items.
Obtain the worker's free consent if they were hired to work in person.
Sign three copies and file one with MITRADEL for stamping.
Provide equipment, support and training, and document the health and safety program.
Write a monitoring and data protection policy and give it to the teleworker.

Common traps

A worker hired for the office cannot be forced into telework, and refusal cannot lead to dismissal.
Forgetting to set a return notice period in the contract invites disputes when the employer calls staff back.
Expense allowances should be written as such; otherwise they risk being treated as salary.
Monitoring tools must be disclosed and proportionate.

Sources

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