Employ Candidates Compliantly in Uruguay

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  1. Overview: Uruguay
  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 Uruguay

If you hire international workforce, or plan to hire, then Hiring and Firing Workforce in Uruguay 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 Uruguay, 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 Uruguay 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.

We are experts in global workforce employment in , 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 Uruguay.

Hiring and Firing Workforce in Uruguay Guide

# Employment Contracts

There are no formal prescriptions as to what form an employment contract must take. However, it is a normal practice for contracts of employment-definite or indefinite- to be concluded in writing.

# Minimum statutory employment rights

# Hours of work
Generally, employees in the industrial sector are entitled to no more than 8 hours per normal working day and 48 hours per normal working week. Employees in the commercial sector are entitled to no more than 44 normal working hours per week. Those who are under the working age, who work in telecoms, with hazardous conditions or as apprentices are entitled to a maximum workweek of 36 hours.

Employees must be provided with a daily rest time of between 2 and 2.5 hours, which must be taken not later than after five continuous hours of work. Employees in the industrial sector must be granted a 24-hour of weekly rest period, while those in the commercial sector are entitled to a 36-consecutive hour of weekly rest.

# Probation period
As a rule, employees may be placed on no more than 3 months of probation period to assess their suitability for the job.

# Annual leave
All employees are entitled to take 20 days of paid leave each year, after the first year of employment, and one additional paid day per years for every 5 years of employment. Employees are obligated to use their annual leave consecutively or in two evenly divided periods, in the case of mutual consent.

# Parental leave
Female employees are entitled to 6 weeks of paid maternity leave before childbirth and additional 8 weeks after delivery, all to be paid in full by the Institute of Social Security (BPS). After maternity leave, new mothers must be given two 30 minutes break per day to nurse their newborn.
Male employees have the right to take 13 days paternity leave, one day leave on the day their child is born and 12 days leave afterwards.

# Sick leave
Employees are entitled to paid sick leave from the first day of hospitalization or the fourth day of absence due to sickness. Employees on sick leave are entitled to receive 70 percent of their normal wage for up to a period of one year from the BPS.

# Overtime
Every work that is performed in excess of the standard working hours must be remunerated at two times normal pay if it is done on a working day or at two and a half times normal pay if it is done on a non-working day.

# State minimum salary
The government of Uruguay fixed the amount of the base salary, for the current year, at $431. It should be considered that in Latin America, Uruguay has the highest inflation level -without counting Venezuela- with an average of 6.88%. Employees’ wage must be paid on a weekly, fortnightly or monthly basis. Employers are obligated to remunerate their employees on a monthly basis, within the first five and no later than the first 10 business days; or on a weekly basis.
Since 1960 every employer is required to pay a supplementary annual salary known as the thirteenth month pay, amount which equals one-twelfth of the total annual payments made by the employer.

# Employment termination
Rural employees who live on the business premises are entitled to 30 days’ notice before termination.
When the relationship is terminated by the employer employees must be provided with a termination pay that is equal to one-month of pay for each year of service up to six months period.  The exceptions to this are in cases of serious misconduct (but this can be very difficult to prove), seasonal workers and those on probation.
Additional payments on termination are due in some cases e.g. firing of a pregnant woman, firing for illness or after a work accident or for union related activity. Terminated employees are entitled to receive unemployment papers from their employers within the 10 days of termination.

Acumen International can help you fast-track your possibilities of entering and expanding your business in Uruguay by providing you with our Employer of Record solutions that allows you to jumpstart your global operations almost immediately, cost-effectively and compliantly.

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