Employ Candidates Compliantly in Paraguay

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  1. Overview: Paraguay
  2. Global HR Compliance
  3. Global PEO and payroll
  4. Work permit for hiring expats via PEO
  5. Contractor vs. employee: which is better?
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Global HR Compliance in Paraguay

If you hire international workforce, or plan to hire, then Hiring and Firing Workforce in Paraguay Guide below will help you understand the nuances of labor legislation in the country.

There are two main reasons for companies hiring foreign workforce:

  • Expanding into foreign markets to sell company product or products there. In this case, companies hire sales representatives who would exclusively represent their product in the target market and sell it to their local client base.
  • Hiring the right foreign talent with a unique expertise, often related to IT sphere that cannot be found in the home country or that costs less compared to local specialist with similar skills.

After you have found the right candidate, the question is how to hire and provide compensation to this person so you as a business remain 100% compliant when working with global workforce. Another thing to consider is whether you want to keep the talent long-term and how you can do that.

If you need to hire foreign workforce in Paraguay so you can expand there, then our Global Employer of Record solution may be of help. We help you legally hire and reward your foreign workforce by making them employees via a global employment outsourcing service. This is simple as employ your in-house workforce with the only difference that workers can live anywhere in the world and Acumen International would be their legal employer on your behalf. This means we would bear all employment risks, not you. Also, we manage bonuses, vacations, sick leave and can rent the office and a car for your foreign sales representatives if that is what you need.

With our solution, you can test new foreign markets before deciding whether you are going to get established there. You gain flexibility and expand with reduced costs, and easily withdraw from the unattractive countries.

We are experts in global workforce employment in Paraguay, and our goal is to become your single provider. Instead of working with numerous local staffing agencies and legal advisors, Acumen International can solve your global business challenges and save you time, costs, and resources.

Our team of English-speaking professionals frees you from working through language nuances. Acumen International works 24/7 and can assist you whenever you need, regardless of time zones. Our goal is to create tailored labor solutions for you that are managed legally and in full compliance with the local employment laws.

With our knowledge and deep understanding of local nuances, you easily satisfy your need for skilled professionals in your global industry. With our qualified local partners, you can trust that your global workforce satisfies all local tax, social security, and immigration requirements in Paraguay.

See the guide below for a general overview of labor rules and regulations in Paraguay. Or contact us if you need to employ workers in Paraguay or would like to get more details.

Hiring and Firing Workforce in Paraguay Guide

If you hire international workforce, or plan to hire, then Hiring and Firing Workforce in Paraguay Guide below will help you understand the nuances of labor legislation in the country.

Companies hire international workforce for various reasons but in most cases they are:

  • entering the foreign markets to sell company products. To do so, the company hires sales representatives who would represent their product and sell it to their local client base.
  • hiring a global talent with unique skills that is unavailable in the local market or costs the company less than the talent with similar skills hired in the home country.

Before entering a certain foreign market or engaging a global talent, it is crucial for the company to understand how it can make local hires and reward its workers on a monthly basis. Growing companies often face a challenge of paying benefits and bonuses to the commission-based independent sales representatives they are working with.

If you intend to hire and pay your foreign workforce in full compliance with labor laws and regulations of Paraguay, then the Global Employer of Record service from Acumen International may be the best way for you to go. We are an International PEO company and we specialize in global employment, meaning we can employ your employees in Paraguay and act as their legal employer on your behalf. We will payroll your foreign workforce monthly and provide benefits to them through our global network so you don’t have to set up your own legal entities there.

See the guide below for a general overview of labor rules and regulations in Paraguay or contact us if you need to employ workers in Paraguay or would like to get more details.

# Employment contracts
The contracts can be, either, written or verbal. If the payment is more than the applicable legal minimum wage, the contract must be written and there should be as many copies of the same as the number of parties.

On this note, please bear in mind that verbal contracts are generally used whenever the work of the employee is temporal, not permanent. All employment relationships are considered to be contractual, whether or not it is formalized in written.

Please find below the types of agreements considering the different criterions:
Agreement:

  • Written;
  • Oral;

Duration:

  • Definite Period;
  • Undefined Period;
  • Piece of work or to provide services;

Method of Payment:

  • Salary;
  • Daily;
  • Commission Basis;
  • Piece of work;
  • Participation;

According the employees:

  • Individual;
  • Team;
  • Collective.

# Minimum (Statutory) Employment Rules and Regulations in Paraguay

# Hours of work:
According to the Article 194 of the Labour Code, the standard time of the daily office work cannot exceed eight hours per day or forty-eight hours per week, unless the work is related to special cases anticipated.

Likewise, the working hours cannot exceed seven hours per day nor forty-two hours per week if the same is perform during the night. There is a specific regime for minor´s working hours. Section 123 of the Labour Code prohibits work of minors between 12 and 15 for more than four hours per day and 24 per week and between 15 and 18 for more than six hours per day and 36 hours per week.

# Probation period:
The time frame of the trail period varies according the type of employee. Please note as follows:

  • Thirty working days for the domestic work and not qualified employee.
  • Sixty working days for the qualified employee and apprentices.
  • Being the case of technical employee highly specialized; the parties could convene in a period different from above, according to the work to be performed.

During this period, either party can end the contract without assuming any responsibility. Likewise, during this period, the employee will have all the rights established in the law, except for prior notice and dismissal compensation.

# Annual leave:
Workers have right to a paid vacations period after each year of continuous work for the same employer.
Holidays will depend on the seniority of the worker:

  • 1 year to 5 years = 12 working days;
  • 5 to 10 years = 18 working days;
  • 10 years or more = 30 working days.

# Parental leave:
The parental rights are protected by our Constitution, especially the maternity rights. Now, if any risk of danger for the woman or son, the mother cannot provide services or perform duties during the pregnancy or lactating period, also, the mother cannot work in night shift at industries, commercial establishment or services, after 10 PM.

Upon notification to the employer of the woman’s pregnancy and, whilst the employee is on maternity license, notice of dismissal and dismissal are considered null. The pregnant employee will have no less than12 weeks for maternity license once the child is born. Likewise, our Constitution establishes the right for paternity, although no legislation has regulated this matter. Moreover, and in order to support the family, the employer is obligated to pay an allowance to the employee considering the number of children the employee has.

The law grants to the pregnant employee a protection against arbitrary dismissal as long as the employee is aware of her pregnancy. The employee absent due maternity and disability leave are entitled to collect their salary.

# Sick leave:
An employee who is ill or disabled and covered by the health insurance license cannot be fired. During the period of illness or disability the social security system is obliged to pay wages.

# Overtime:
Overtime is allowed under special circumstances but they cannot exceed three hours per day, three days per week, or 57 hours per week, and must be paid extra. Not allowed for employees under 18.

# State minimum salary:
Paraguay’s minimum wage is 1,824,055 Paraguayan guaraníes per month ($330). A special minimum wage of 40% of the regular minimum wage is set for domestic workers, and deductions are made for housing and food. Paraguay’s minimum wage was last changed in March 2014.

# Employee dismissal:
In regards to the ending of a contract, either party (employer and employee) must duly notify the other party of the dismissal. The notice can be written or verbal. The time frame of the same depends on years spent at the industry/firm/corporation. Please note, that for a cause to be considered justified, it has to be proven before the competent Labour Authority. If this is not done, it will be considered unjustified and the employer will forced to pay the dismissal compensation along with the salary of one month to his employee. Moreover, the contract of an employee who has been working within the company over the last ten years without interruption can only end if the employer has proven a legal cause of dismissal before the Labour Authority.

If no justified cause is proven, the employer is obligated to reintegrate said employee to his work. If the reintegration of the employee is not possible due to a misunderstanding with the employer, or legal representative of the company and it is proven before Labour Authorities, the employee is entitle to receive a compensation.

This compensation will be equivalent to the double of the dismissal compensation he would have received if fired under unjustified cause. Harassed employees are entitled to terminate as with just cause the employment contract and pursue indemnification from their employers under the Labour Code. Employers may dismiss a harasser with just cause, but must judicially prove such conduct.

In the case of terminating an employee for a justified cause not proved in a legal proceeding, the employer shall pay all salaries, compensation and fines levied upon during the suspension of the contract, or terminate the labour contract, in which case he is entitled to the indemnification for unfair dismissal. If the worker has achieved labour stability (10 years or more seniority), he cannot be subject to dismiss except by reason of just cause approved by decision of a Judge in Labour Jurisdiction.

Neither party to a labour contract may terminate the contract without prior notice. The prior notice must be given according to the following rules, depending on seniority:

  • Up to one year, 30 days’;
  • up to five years, 45 days’;
  • Over ten years, 90 days’.

Acumen International can help you fast-track your possibilities of entering and expanding your business in Paraguay by providing you with our Employer of Record services. Our unique mix of PEO/EOR solutions will enable you to jumpstart your global operations almost immediately, cost-effectively and compliantly without any need to set up a legal entity first or afterwards.

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