Working Hours and Overtime in Panama

What Are The Standard Working Hours In Panama?

An employee whose age is 17 or younger has a maximum of 6 hours per day and 36 hours per week. An employee whose age is 18 or older is allowed to work 48 hours per week. A minimum meal interval of 30 minutes must be observed by employees who work more than 6 hours in a day. In typical working hours, Monday through Friday, the hours are 8:00 to 17:00.

Maximum Working Hours In Panama

Under Panamanian law, the standard daytime workday is 8 hours and the standard daytime workweek is 48 hours. Night work is limited to 7 hours per day and 42 hours per week, while mixed shifts that include part of the night are capped at 7.5 hours per day and 45 hours per week. You must structure schedules so that employees do not exceed these statutory limits unless overtime rules are correctly applied.

Collective bargaining agreements or internal policies may establish shorter daily or weekly limits, and in that case you must comply with the more favorable standard. Any modification to standard hours, such as compressed workweeks or rotating shifts, must still respect the maximum daily and weekly limits for the applicable type of schedule. You are required to keep accurate time records to demonstrate compliance in the event of an inspection or dispute.

Industry-Specific Exceptions

Companies hiring in sectors like healthcare, transportation, manufacturing, or hospitality may be subject to special scheduling rules. In Panama, continuous operations or services that cannot be interrupted may use rotating or split shifts, but you must still respect the daily and weekly caps for daytime, nighttime, or mixed schedules. Any exception should be grounded in the Labour Code or a duly approved collective agreement, not just internal custom.

• Healthcare professionals may work 12-hour shifts with extended rest periods.
• Transport workers must comply with EU-aligned rest and driving limits.
• Manufacturing and security staff often rotate through night or weekend shifts.

Even in these sectors, you must ensure the average weekly limit is respected over a reference period. In Panama, this means that when you use irregular or rotating schedules, the average hours over the agreed cycle cannot exceed the statutory weekly maximum for the type of work performed. You should document the reference period and the method used to verify compliance.

Managerial And Exempt Employees

In Panama, senior managerial employees and those in positions of trust may be excluded from some working time limits and overtime entitlements, provided their responsibilities and decision-making authority are clearly defined. These roles typically involve autonomy over schedules and a higher level of remuneration that already reflects extended availability. However, you should not assume that a job title alone creates an exemption.

To rely on an exemption, you must describe the managerial or trust nature of the role in the employment contract and ensure that the employee genuinely exercises those functions. Misclassifying employees as exempt when they do not meet the legal criteria can expose you to back pay claims for overtime and related benefits. When in doubt, treat the employee as covered by standard working time rules.

Statutory Full-Time Working Hours In Panama

Statutory full-time work in Panama is generally based on 48 hours per week for daytime schedules, 42 hours per week for night schedules, and 45 hours per week for mixed schedules. Most full-time employees work 8 hours per day over 6 days, or 8 hours per day over 5 days with a shorter day on Saturday, depending on the sector. You may agree to shorter full-time hours in contracts or collective agreements, but not longer.

Part-time arrangements are permitted as long as the agreed hours are clearly stated and do not exceed the applicable daily and weekly limits. When employees regularly work close to full-time hours, you should review whether their status and benefits remain appropriate under Panamanian law. Transparent documentation of full-time and part-time schedules helps reduce disputes about entitlements and overtime triggers.

Overtime Regulations In Panama

In Panama, you must pay overtime whenever employees work beyond the statutory daily or weekly limits for their type of schedule, and you are required to keep precise attendance and payroll records to prove compliance. Failure to document overtime correctly can lead to claims for unpaid wages, surcharges, and administrative fines. Robust timekeeping systems and clear internal approval procedures are essential to control costs and reduce legal risk.

What Counts As Overtime In Panama?

Overtime in Panama is generally any time worked beyond 8 daytime hours, 7 nighttime hours, or 7.5 mixed hours in a day, or beyond 48 daytime hours, 42 nighttime hours, or 45 mixed hours in a week. Work performed on the employee’s weekly rest day or on a public holiday is also treated as overtime and attracts higher premium rates. You should specify in writing how overtime is requested, authorized, and recorded to avoid disputes about whether extra hours were genuinely required.

Unscheduled or unapproved extra hours can still be considered overtime if you knew or should have known that the work was being performed. In Panama, courts tend to favor employees when records are incomplete, which can result in overtime being presumed in their favor. To mitigate this, you must ensure supervisors enforce cut-off times and that all additional hours are captured in your systems.

Maximum Overtime In Panama

Panamanian law limits overtime to a maximum of 3 hours per day and 9 hours per week per employee, regardless of the type of schedule. This means that even when business needs are high, you cannot lawfully require more than 3 extra hours on any given day or more than 9 extra hours in a week. You must organize staffing levels so that peak workloads are covered without breaching these caps.

In exceptional circumstances, such as emergencies or force majeure, temporary deviations may be tolerated, but they must be justified and documented, and you should return to normal limits as quickly as possible. Systematic use of overtime close to the 9-hour weekly cap can attract scrutiny from labor inspectors in Panama. Consider hiring additional staff or reorganizing shifts if overtime becomes a structural feature rather than an occasional measure.

Overtime Payout Rates In Panama

In Panama, overtime worked on regular working days must be paid at a minimum of 125% of the employee’s ordinary hourly rate, which is a 25% premium. Overtime performed at night must be paid at 150% of the ordinary hourly rate, reflecting a 50% premium. When overtime is worked on a weekly rest day or Sunday, the minimum rate is 150% of the ordinary hourly rate, and if it is also overtime beyond normal hours, the higher applicable premium applies.

Work performed on public holidays must be paid at 150% of the ordinary hourly rate, and if the work also qualifies as overtime, the combined effect can reach 175% or more depending on the circumstances. You should configure your payroll system to apply at least 1.25x, 1.5x, or the higher combined rate automatically based on the day and time the hours are worked. Clearly communicating these numerical rates in contracts and policies helps employees understand their entitlements and reduces pay disputes.

Rest Periods And Breaks In Panama

In Panama, employees typically work up to 8 hours per day and 48 hours per week on daytime schedules, with lower weekly limits for night and mixed shifts, and rest periods and breaks are designed to protect health within these limits. Meal breaks must interrupt the working day once a minimum number of hours has been worked, and daily and weekly rest periods must be respected regardless of workload. As an employer, you must plan rosters so that these breaks are actually taken and not just recorded on paper.

• Meal Break: In Panama, employees who work more than 6 consecutive hours must receive at least a 30-minute unpaid meal break, and many employers grant 60 minutes by policy or agreement. You should schedule this break roughly in the middle of the shift and ensure employees are free from duties during this time.
• Daily Rest: Employees in Panama are entitled to a minimum uninterrupted daily rest period of 9 to 11 hours between shifts, depending on the type of schedule. You must avoid back-to-back shifts that would reduce this rest window below the legal minimum.
• Weekly Rest: Panamanian law guarantees at least 24 consecutive hours of weekly rest, usually on Sunday. If business needs require Sunday work, you must provide a substitute rest day and pay the applicable Sunday or rest-day premium.
• Minors: Workers under 18 in Panama have shorter maximum working hours and must receive adequate rest and breaks tailored to their age. You should avoid scheduling minors for night work or split shifts that could interfere with schooling or recovery time.
• Employer Duty: Employers in Panama are responsible for organizing work so that statutory breaks and rest periods are actually observed, not waived. Labor inspectors may review schedules and time records, and failure to provide proper rest can lead to sanctions and back-pay claims.

Night Shifts And Weekend Regulations In Panama

Night and weekend work are legal in Panama but subject to additional employer responsibilities and employee protections. You must pay specific statutory premiums for qualifying hours and ensure that working time limits and rest periods are respected. Proper planning and documentation are essential to avoid non-compliance when operating outside standard daytime schedules.

Night work in Panama is legally defined as work performed between 6:00 p.m. and 6:00 a.m., and any shift that falls entirely within this window is considered a night shift. Mixed shifts that cover both day and night hours are treated as night work if at least 3 hours fall within the night period. These definitions apply across roles and sectors, so you must classify and compensate affected hours correctly.

• Premium Pay: In Panama, night work must be paid at a minimum of 125% of the employee’s ordinary daytime rate, reflecting a 25% premium, and if the night hours are also overtime, the combined rate reaches at least 150% or 1.5x. Sunday or weekly rest-day work is paid at a minimum of 150% of the ordinary rate, and public holiday work is also paid at 150% or 1.5x, with higher combined rates when overtime is involved.
• Health Monitoring: While Panamanian law does not mandate periodic medical exams for all night workers, you are expected to protect employee health and safety through risk assessments and appropriate measures. Many employers offer voluntary health checks and fatigue management programs for regular night staff to reduce accidents and long-term health risks.
• Workplace Restrictions: In Panama, minors are generally prohibited from night work and from employment in hazardous conditions, which includes many late-hour operations. Pregnant workers should not be assigned to night shifts or heavy weekend work where this could endanger their health, and you must consider medical recommendations when adjusting their schedules.

Weekend work in Panama is regulated through the requirement of at least 24 consecutive hours of weekly rest, usually on Sunday, and any work performed on that rest day must be compensated at a minimum of 150% of the ordinary rate or 1.5x. If employees work on their designated rest day, you must also grant a substitute rest day during the week and ensure that total weekly hours, including overtime, do not exceed legal caps. Clear policies on Sunday and holiday scheduling help you manage staffing needs while remaining compliant with Panamanian labor law.