What Happened
On 20 March 2026 President José Raúl Mulino sanctioned Law 513, which establishes a regulated program of paid internships aimed at strengthening early work experience for young people between 18 and 25 years old. The law sets a monthly retribution of $450 to be paid by participating companies or non-profit entities; that payment is treated as a subsidy and is not considered salary for tax or social security deductions.
Key Provisions
Under Law 513, internships may not exceed 40 hours per week and each individual internship has a maximum duration of one year. The program itself will run for three years from its entry into force and may be extended once for an additional three years by executive decree.
To prevent displacement of formal jobs, the law caps the number of interns a company can engage based on payroll size: companies with up to 50 employees may have up to two interns; those with between 100 and 200 employees may take up to six interns; and companies with more than 200 employees may engage up to 3% of their workforce as interns. Firms that exceed these limits or substitute formal positions with interns face fines of $250 to $500.
The law clarifies that internships are not a formal employment relationship and do not generate social benefits. Participating employers must, however, purchase occupational risk insurance for interns. If a company decides to hire an intern at the end of the placement, it must formalize that hire with an individual contract in accordance with the Labor Code; minors require parental or guardian consent.
Background
The new measure is presented by authorities as a response to longstanding unpaid internships and as a route to increase practical work opportunities for youth. La Prensa’s coverage of related economic issues includes a linked report noting recent unemployment figures in Panama.
What This Means
The law creates a regulated framework intended to expand paid, time-limited practical training while limiting risks that firms will replace salaried roles with interns. Employers will need to adjust payroll planning and compliance processes, and young people may gain clearer, paid entry routes into the labor market. Enforcement details and requests for additional intern slots require evaluation and authorization by the Ministry of Labor and Development (Mitradel).
Labor Minister Jackeline Muñoz, quoted in coverage, framed the law as a matter of justice for young interns: “Esta ley es justicia para todos esos jóvenes pasantes que durante mucho tiempo trabajan dentro de las empresas sin una remuneración, y esto es una muestra más de que la generación de empleos solamente se construye desde la empresa privada y no desde el gobierno”.