G-P provides employer of record services for customers that want to hire employees and run payroll without first establishing a branch office or subsidiary in Guatemala. Your candidate is hired via G-P’ Guatemala PEO in accordance with local labor laws and can be onboarded in days instead of the months it typically takes. The individual is assigned to work on your team, working on your company’s behalf exactly as if he or she were your employee to fulfill your in-country requirements.
Our solution enables customers to run payroll in Guatemala while HR services, tax, and compliance management matters are lifted from their shoulders onto ours. As a Global PEO expert, we manage employment contract best practices, statutory and market norm benefits, and employee expenses, as well as severance and termination if required. We also keep you apprised of changes to local employment laws in Guatemala.
Your new employee is productive sooner, has a better hiring experience and is 100% dedicated to your team. You’ll have peace of mind knowing you have a team of dedicated employment experts assisting with every hire. G-P allows you to harness the talent of the brightest people in more than 185 countries around the world, quickly and painlessly.
Guatemala is in Central America and borders both the Pacific Ocean and the Caribbean Sea. It has the largest population of any Central American country with over 17 million people.
When negotiating terms of an employment contract and offer letter with an employee in Guatemala, it may be useful to keep the following in mind:
Employment Contracts in Guatemala
Employment contracts may be for fixed or indefinite terms.
It is legally required to put the employment contract in writing and to produce three copies. Each party retains one copy and one is given to the Directorate General of Labour within 15 days. The employment contract should be in the local language, and spell out the terms of the employee’s compensation, benefits, and termination requirements. An offer letter and employment contract in Guatemala should always state the salary and any compensation amounts in quetzals rather than a foreign currency.
Working Hours in Guatemala
The work week in Guatemala is 44 hours and overtime should be paid at 150% of the usual wage. Under no circumstances can an employee be required to work more than 12 hours in a day.
Holidays in Guatemala
Guatemala celebrates 11 national holidays:
- New Year’s Day
- Maundy Thursday
- Good Friday
- Holy Saturday
- Labour Day
- Army Day
- Independence Day
- Revolution Day
- All Saints’ Day
- New Year’s Eve
Vacation Days in Guatemala
Employees are generally entitled to 15 days of paid annual leave after working for at least 150 days. Vacations should be paid in advance.
Guatemala Sick Leave
Employees are generally entitled to at least 5 days of paid sick leave.
Maternity/Paternity Leave in Guatemala
Female employees are generally entitled to 12 weeks of paid maternity leave.
Fathers are entitled to 2 days of paid paternity leave.
Health Insurance in Guatemala
Guatemala has a public/private health care system.
Employees are generally eligible for the following bonuses:
- Annual bonus that is equal to one month of regular salary for Christmas and New Year’s
- Annual bonus of one month of regular salary paid in July
Termination/Severance in Guatemala
The first two months of an indefinite contract are considered probationary.
When terminating an employee, the employer must pay:
- Any salary owed up to the date of dismissal
- The proportional year-end bonus
- Applicable proportion of annual bonus
- Proportional amount of vacation owed
If the employee was terminated without just cause, severance pay may also be owed equal to one month’s salary for each year they worked for the company.
Paying Taxes in Guatemala
Employers contribute 12.67% of wages to social security, and employees contribute 4.83%.
This information is provided as generally accepted information and is not intended as advisory services.
Establishing a branch office or subsidiary in Guatemala to engage a small team is time-consuming, expensive and complex. Guatemalan labor law has strong worker protections, requiring great attention to detail and an understanding of local best practices. G-P makes it painless and easy to expand into Guatemala. We can help you hire your candidate of choice, handle HR matters and payroll, and ensure that you’re in compliance with local laws, without the burden of setting up a foreign branch office or subsidiary. Our Guatemala PEO and Global Employer of Record solution provides you peace of mind so that you can focus on running your business.
If you would like to discuss how G-P can provide a seamless employee leasing or PEO solution for hiring employees in Guatemala, please contact us.