The state hires poorly, people exploit the system and taxpayers pay millions, analysts say

The Guatemalan state can hire someone for a few months and end up paying that person for years. A series of labor lawsuits has exposed how temporary contracts can become million-quetzal liabilities for the public treasury after court rulings.

Former workers from different government institutions have gone to court seeking reinstatement, back wages, benefits or compensation. The group includes a minister, a congresswoman, two appellate judges, relatives and associates of former officials, as well as workers with no known political ties. Some have won their cases, while others are still litigating.

The cost is already built into the national budget. The executive branch paid Q724 million for labor judgments in 2025. In Congress, where contracts under budget category 022 increased by 95% over a decade, legislative president Luis Contreras said reinstatement lawsuits had cost more than Q35 million this year. The figures were cited alongside a report from the Alliance for an Efficient Congress.

Analysts consulted by La Hora said the problem begins before a dispute reaches court. They pointed to institutions that use arrangements designed for temporary work over many years, classify positions incorrectly and fail to plan the civil service properly. They also said such contracts can, in some cases, create incentives to place favored personnel in government bodies.

Labor lawyer Alejandro Argueta placed responsibility on the institutions that decide how people are hired and classified. Meanwhile, the National Civil Service Office, known as Onsec, said it provides technical leadership and advice, while each government authority remains responsible for its hiring practices. The result, analysts argue, is a system in which administrative decisions can produce large bills for taxpayers.

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The state keeps bleeding because of the large number of lawsuits it faces.