- Overview: Peru
- Global HR Compliance
- Global PEO and payroll
- Work permit for hiring expats via PEO
- Contractor vs. employee: which is better?
Global HR Compliance in Peru
If you hire an international workforce, or plan to hire, then Hiring and Firing Workforce in Peru Guide below will help you understand the nuances of labor legislation in the country.
When the company is planning to enter a new foreign market of Peru and has a need to employ a local national there, the first question to answer is how it is going to make local hires.
We have designed a Global Employer of Record service to help you outsource global employment of your foreign workforce to companies like ours.
This solution helps you employ your global sales force in Peru as well as in other 180+ countries of the world, and provide pay and benefits to your employees, as well as administer any business expenses with our help.
Our solution is different from other hiring modes in that it helps you engage your foreign workforce in full compliance with the local labor legislation. This means you are protected from any non-compliance and employee misclassification risks while we bear all employment risks, not you.
So, it looks very much like hiring your in-house sales force in your home country. However, you focus on only on your global business development while we admin your global HR. In addition, you don’t need to open your own entities in the foreign countries and can leverage our infrastructure in Peru instead. With our service, you can become a global company with reduced costs and minimized time and effort on your end.
Your employed foreign sales force will devote 100% of their time to your company product and may stay with you longer than foreign independent sales reps.
Global Employer of Record solution is 100% compliant solution that guarantees you and your employees fully compliance with local legislation in Peru .
We are experts in global workforce employment in Peru, 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 Peru.
See Hiring and Firing Workforce in Peru Guide below for a general overview of labor rules and regulations in the country. Or contact us if you need to employ workers in Peru or would like to get more details.
Hiring and Firing Workforce in Peru Guide
Peru is one of the fastest growing economy in Latin America with a relatively stable economy and a lot of investment in the development of their infrastructure, ecosystem and business environment at large. Despite these facts, doing business in Peru can be difficult and sometimes discouraging, especially for foreigners who may know little or nothing about the business environment of the country. Here are a few tips to be aware of that will help you when conducting business in Peru.
# Employment Contracts
An indefinite contract may not be provided in writing. Definite term contract and all the employment contract for expatriate workers must be concluded in writing. A definite term contract must be given up to a maximum period of 5 years. The maximum duration of any employment contracts to expatriate employees is 3 years, but can be renewed afterwards by up to the same maximum duration. It is important to remember that foreign employees shouldn´t exceed 20% of the whole workforce, and the total salary received by foreign employees shouldn´t exceed 30% of the total company payroll. Exceptions regarding a higher salary can be made in the case of technical employees or management positions.
# Minimum statutory employment rights
# Hours of work
The normative daily working hours in Peru is 8 hours and 48 hours per week.
# Probation period
Employers have the right to try their new employees for 3 to 12 months, depending on the qualification of the employees, and only after a successful probation can they obtain a legal right against unjustified dismissal.
# Annual leave
Peruvian workers have the right to about 12 public holidays: New Year’s Day, Australia Day, Good Friday, Labor Day, Feast of Saints Peter and Paul, Independence Day celebrations, Saint Rosa of Lima Day, Naval Battle of Angamos, All Saints’ Day, Immaculate Conception, Christmas Day; and any other regional holidays provided for by provincial governments.
Employees are entitled to 30 days of paid leave annually for every complete year of services they provided to the employer. Employees on annual leave have the right to receive a leave benefit that is equivalent to their monthly wage.
# Parental leave
Female employees are eligible for 98 days of paid maternity leave, with 49 days taken during pregnancy and the remaining 49 days used after child delivery. After the official 98 days period, the lactation period begins. Until the new-born is 1 years old, the mother has the right to be away from the workspace for 1 hour per day, to breastfeed the child. Male employees whose partner had just put to bed are entitled to 4 days of paid paternity leave.
# Sick leave
The duration of the sick leave depends on the employee’s disability for working.
For the first 20 days of disability, the employer has to pay the corresponding salary to cover the sick leave. After this period the Social Security Service pays – in fact, the employer pays and is later reimbursed by the Social Security Service – the sick leave with the amount of the disability subsidy for 11 months and 10 days.
Overtime is considered any hours that are in excess of the regular 8 working hours per day and 48 hours per week. Employers are required to appropriately compensate for every overtime, or otherwise be faced with a fine. Overtimes are paid with a surcharge to be agreed but for the first 2 hours it may not be less than 25% per hour, calculated on the remuneration received by the employee. For the remaining hours, it shall not be less than 35% per hour. Employers must pay their employees at higher rate for any job performed at night. The employees cannot be paid less than the monthly minimum wage plus a surcharge of 35% as minimum for night work.
# State minimum salary
Effective May 2017, the statutory monthly minimum wage for Peruvian employees is 850 PEN.
Bonus: An employee gets two bonuses per year, one on Independence Day of Peru (1st of July) and the second on Christmas. The wage of the bonus is equivalent to the monthly salary.
Compensation for Time of Service (CTS – Compensacion por Tiempo de Servicios):
This law is a social benefit to protect the existence of the employee after the termination of employment. This amount is accrued over time starting on the first day of work. To assure that the compensation is available, the employer must deposit the CTS twice a year (on the 15th of May and -November) to a bank account that can be elected by the employee. For each completed calendar month, 1/12 of the wage must be deposited in the bank account. Therefore, at the end of the year, the whole deposit should be approximately equal to one monthly salary. To benefit from the CTS, the employee has to have been in the company for at least a full month.
# Employment termination
An employee is eligible to get at least 6 days up to 30 days’ notice in writing before the employer can terminate his contract of employment. Employees whose contracts are canceled for objective reason(s) are entitled to receive a compensation fee up to a maximum of 12 months period and a letter of reinstatement (for invalid dismissal). Also, the employer is required to give the employee a written note that states the reasons for the decision and the intended date of termination. An employee who is dismissed with no just cause must be given a severance pay, of which the amount depends on his previous work history. Those who are dismissed on the basis of gross misconduct may not be given any prior notice before their dismissal and severance pay. In the case of illegal dismissal of an employee, the employer will be required to compensate the employee with an amount equivalent to his average monthly pay for every month he worked in the company up to 12 months period.
Acumen International can help you fast-track your possibilities of entering and expanding your business in Peru 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.