Table of Contents

Peru

Table of Contents

Currency

Peruvian Nuevo Sol (PEN)

Payroll Frequency

Monthly

Employer Taxes

9%

About Peru

The Republic of Peru is a country in the western part of South America, bordered by the Pacific Ocean to its west. It has a diverse habitat with the Andes mountains to its north and southeast to the tropical Amazon region to its east. Although Peru was conquered by the Spanish Empire in the 16th century, its ancient history boasts the Inca Empire, the largest state in pre-Columbian America, going all the way back to the 4th millennia BCE. As an emerging market economy with representative democratic republic governance, Peru has a high level of human development and is one of the region’s most prosperous economies. Its economic focus includes mining, manufacturing, agriculture, and fishing. Peru has a population of approximately 32 million, and Spanish is the primary spoken language, although a number of Peruvians also speak Quechua or other native tongues. Peru is considered a megadiverse country and has over 20,000 species of plants and animals, including the puma, jaguar, and spectacled bear.

Employment Relationship

• Permanent Employment

According to Peru's labor law, employment contracts made for an indefinite period grant an employee all the statutory rights and benefits of a permanent employee. Unless an employment contract specifically states otherwise, it is presumed to be for an indefinite term.

• Fixed-Term or Specific-Purpose Contracts

Peru's labor law permits the use of employment contracts concluded for a specific duration or a specific job in the following circumstances: During the launch of a new company or the start of new business activity (maximum duration of three years) During a time of increased production or market need During a time of business restructuring During an emergency. Peru also allows the use of fixed-term contracts for the substitution of an absent worker as well as for intermittent or seasonal work. Fixed-term contracts must be in writing and must generally have a maximum duration of five years.

• Temporary Employment Contratcs

Peru's labor law permits the use of temporary work contracts for the fulfillment of urgent market needs, business reorganization, or for seasonal work. The employment contract must be in writing and clearly state that its purpose is for temporary hiring. Temporary contracts made for meeting urgent market needs can be concluded for a maximum duration of five years. Temporary employment agreements concluded for business reorganization may be concluded for a maximum duration of two years. Seasonal contracts must be made for transitory needs, and their maximum duration is for six months in any year. Employers must register temporary contracts with Peru's Labor Ministry.

Probationary Period

According to Peru's labor law, the default probationary period lasts 3 months, after which time the employee gains the right to protection against arbitrary dismissal. The parties may agree to a longer probationary period if justified by the nature or degree of responsibility, training, or adaptation necessary for the role. The extension of the probationary period must be in writing and may not exceed (together with the initial period of 3 months) 6 months for positions requiring qualifications or trust and 1 year for business directors and officers.

Working Hours

Peru's labor law stipulates that the standard workweek is 48 hours and that daily working hours cannot exceed eight hours. Employers are authorized to establish ordinary working days in agreement with the trade union. Employees can work more hours in a week to make up for missed work during holidays by agreement. The work of adolescents between the ages of 12 and 14 shall not exceed four hours daily or 24 hours a week. Work by adolescents between the ages of 15 and 17 cannot exceed six hours a day or 36 hours a week. Adolescents under 18 are prohibited from working between the hours of 7:00 p.m. and 7:00 a.m.

Holidays / PTO

• Statutory Holidays

New Year’s Day – January 1; Holy Thursday and Good Friday – Dates variable; Labor Day – May 1; San Pedro and San Pablo – June 29; Independence Day – July 28 and 29; Santa Rosa de Lima – August 30; Combat of Angamos – October 8; All Saints – November 1; Immaculate Conception – December 8; Christmas – December 25.

• Paid Annual Leave

According to Peru's labor laws, to be eligible for annual leave, employees must complete one year of service with the employer. Employees who work for six days a week must have worked for at least 260 days in a year, and employees who work for five days in a week must have worked for at least 210 days in a year. Employees are entitled to at least 30 calendar days of paid annual leave. Employers should note that the 30 calendar days include weekly rest days, public holidays, and other non-working days. The annual leave can be reduced from 30 to 15 days by providing compensation for the 15 days. The employee is to be paid their regular compensation for the leave period. Annual leave compensation is to be paid before the start of the employee's annual leave.

• Sick Leave

According to Peru's labor code, employees are entitled to 20 days of sick leave paid by their employer. After these 20 days, qualified employees are eligible to receive, after a one-day waiting period, 100% of their average daily earnings over the last four months for up to 11 months and ten days. Alternatively, they may receive these wages for up to 540 nonconsecutive days within a three-year period. The National Social Security Fund pays benefits from the 21st day. To qualify for the social insurance sick leave benefit, most insured persons must have three consecutive months of contributions or four non-consecutive months within the six months before the month in which the disability began. Agricultural workers must have three consecutive months of contribution or four non-consecutive months in the last 12 months before the month in which the disability began. Fishing workers must have two consecutive or nonconsecutive contributions paid in the six calendar months before the month in which the disability began. Insured independent artisanal fishermen and fish processors must have three consecutive monthly contributions paid.

• Maternity Leave

Pregnant employees are entitled to 49 days of paid leave before delivery and 49 days after delivery. In the case of multiple births or birth with a disability, the maternity leave is extended by 30 days. If the delivery occurs before the expected date, the remaining days are added to the postnatal rest. Qualified insured employees receive 100% of their average daily earnings over the last four months from the social insurance fund, up to a maximum earnings level, for all 98 days. The benefit is extended for multiple births or the birth of a child with a disability. To qualify for maternity benefits from the state social insurance fund, mothers must have at least three consecutive months of contributions or at least four months of contributions in the six months before becoming pregnant. Dock and agricultural workers must have at least three consecutive months of contributions or at least four months of contributions in the 12 months before becoming pregnant. Also, they must have contributed during the month in which the child is born.

• Paternity Leave

According to Peru's law, employees have the right to ten calendar days of paternity leave in instances of natural birth or cesarean section. For premature and multiple births, the leave is increased to 20 calendar days. For births resulting in terminal congenital disease, severe disability, or serious complications to the mother's health, paternity leave is 30 calendar days. Paternity leave starts from the day of birth or 3 days before the date of birth. Employees must inform their employers of this leave at least 15 days before the expected date of delivery. Paternity leave cannot be substituted with compensation.

Termination of Employment

• Notice Period

Peru's labor law requires employers to give employees written notice of at least six calendar days in cases of dismissal due to conduct and a notice period of 30 calendar days for cases of dismissal due to lack of employee capacity. The employer notification letter must specify the cause of dismissal and the date of the effective termination. Employees need to provide 30 days' notice if they terminate their contract.

• Severance Benefits

According to Peru's labor law, employees who are justifiably dismissed for their conduct or capacity are not eligible to receive severance compensation. In cases of arbitrary dismissal, employees are eligible for a severance payment equal to 1.5 months' salary for every year of service, up to a maximum of 12 months' payment. Parts of years are paid proportionally to the months (1/12) and days (1/30) worked. There is no provision for severance pay in the case of termination due to collective dismissal. In addition, a special payment must be made to the employee upon the termination of the employment contract, regardless of the cause for termination. This payment, called "Compensación por Tiempo de Servicio," is equivalent to one monthly average salary per year of service.