Peru – PEO & Employer of Record
COVID-19 Status Update: Globalization Partners HR specialists in Peru report that the country has encouraged social distancing. A curfew has been implemented and will continue until the situation is under control. As the situation develops, and employees begin to work remotely/from home, Globalization Partners continues to advise our clients on how to preserve employees while keeping business intact, and how to empower employees to work from home and stay productive. Our clients continue to request our solution for their global expansion needs, although companies are slowing down hiring and/or recruitment activities at this time.
Globalization Partners provides employer of record services for clients that want to hire employees and run payroll without first establishing a branch office or subsidiary in Peru. Your candidate is hired via Globalization Partners’ Peru 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.
Table of Contents
- Peru Holidays
- Bonus in Peru
- Working Hours in Peru
- Vacation in Peru
- Sick Leave in Peru
- Maternity/Paternity Leave in Peru
- Termination/Severance in Peru
- Peru Tax
- Health Insurance in Peru
- Additional Benefits in Peru
- Employment Contracts in Peru
- Why Globalization Partners
Our Global Employer of Record Platform™ and Global PEO service enables clients to run payroll in Peru 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 Peru.
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. Globalization Partners allows you to harness the talent of the brightest people in 170 countries around the world, quickly and painlessly.
Peru is located in western South America, bordering the Pacific Ocean. The Andes, the longest continental mountain range in the world, extend the length of Peru. 31 million people live in Peru, and their official languages are Spanish and the Amerindian languages Quechua and Aymara.
When negotiating terms of an employment contract and offer letter with an employee in Peru, it may be useful to keep the following in mind:
Peru celebrates 12 national holidays:
- New Year’s Day
- Maundy Thursday
- Good Friday
- Labor Day
- Saint Peter & Saint Paul
- Peruvian Independence Day (2 day holiday)
- Saint Rose of Lima
- Battle of Angamos
- All Saints Day
- Immaculate Conception
Bonus in Peru
In general, employees are entitled to a bonus in July and a second bonus in December, each of which should be equivalent to a month of salary.
Employees are also generally entitled to receive an extraordinary bonus of 9% of the bonuses received in July and December.
Additionally, employees are generally entitled to Compensation for Length of Services, a benefit that is usually equivalent to 1.16 of the employee’s monthly salary, 50% to be paid in May and 50% in November.
Finally, employers with more than 20 employees must share profits among their employees.
Working Hours in Peru
The standard workweek is eight hours per day with a maximum of 48 hours per week.
Vacation in Peru
In general, employees are entitled to one month of paid leave each year.
Sick Leave in Peru
Employees are generally entitled to at least five days of paid sick leave annually.
Maternity/Paternity Leave in Peru
Female employees are generally entitled to 14 weeks of paid maternity leave, seven to be taken before the birth and seven after.
Fathers are entitled to 10 consecutive days of paid paternity leave.
Termination/Severance in Peru
Probationary periods of three months to one year are permitted.
Employees may be terminated on objective grounds or for cause, with documentation. In general, employees should get at least six calendar days of written notice so that the employee can respond in writing with a defense, or 30 calendar days to prove his/her capability. The employer must also provide in writing to the employee, and trade union if applicable, the dismissal decision and the reason for the dismissal.
Employees dismissed without cause are generally entitled to severance pay for up to 12 months.
- 9% of payroll to the National Health System (RPS), although if they provide supplemental health plans to their employees, they can get a credit for some of that expense.
- An average of 11.5% of gross salary to ASPs, private entities that manage pension funds which provide employees retirement and disability pensions and funeral costs.
Employers also are required to have supplementary insurance for risky work.
Employees contribute 13% of their salaries to the National Pensions System, but they may switch to a Private Pension System.
Health Insurance in Peru
Peru has a public/private healthcare system.
Additional Benefits in Peru
Employers commonly provide supplemental health insurance.
After four years of service, employees are generally entitled to life insurance.
Employment Contracts in Peru
Fixed-term contracts are permitted for up to five years, must be in writing, and must be registered with the Labour Ministry.
Legally, employment contracts in Peru can be written or verbal, but it is best practice to put a written employment contract in place in Peru, in the local language, which spells out the terms of the employee’s compensation, benefits, and termination requirements. An offer letter and employment contract in Peru should always state the salary and any compensation amounts in Peruvian soles rather than a foreign currency.
This information is provided as generally accepted information and is not intended as advisory services.
Why Globalization Partners
Establishing a branch office or subsidiary in Peru to engage a small team is time-consuming, expensive and complex. Peruvian labor law has strong worker protections, requiring great attention to detail and an understanding of local best practices. Globalization Partners makes it painless and easy to expand into Peru. 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 Peru PEO and Global Employer of Record Platform provides you peace of mind so that you can focus on running your business.
If you would like to discuss how Globalization Partners can provide a seamless employee leasing or PEO solution for hiring employees in Peru, please contact us.