Peru
Knowledge Base
Frequently asked question, important data and information on EOR.
General information
1025 PEN per month
Labor Law
Laws that regulate Labor Relationship
General Labor Law (LGT)
Onboarding guide
Requirements for a labor contract
• The functions corresponding to the job position must be expressly indicated.
• Workday indicating the days and hours of work.
• Trial period.
• Salary
• Specify whether the contract is a fixed-term or indefinite-term contract.
• Vacations
• Penalties
• Rights and duties
• Dispute resolution
• Productivity agreement
• Confidentiality agreement
• Non-competition agreement
• Exclusivity agreement
• Permanence agreement
Pre-hire Medical exam
Not mandatory
Types of contracts
• Indefinite term
• Fixed-term: grant employees all the rights and benefits established for employees hired for an indefinite term.
• Part-time Employment Contracts: work schedules with a weekly average of less than four (4) hours per day.
• Home work contract: The worker works from home or another place without direct and immediate supervision of one or more employers.
• Remote work contract: Regulates tasks done without the physical presence of the worker at one of the company’s offices or work sites. The employee stays connected through a computer, telecommunications, or similar means, through which the control and supervision of the tasks are exercised.
• Foreign employment contract: Employers may only hire foreign personnel up to 20% of the total workforce. The employment contract with foreigners must be in writing and by a predetermined duration. It cannot exceed three years at a time, although successive contracts are possible. The contract must stipulate the worker’s obligation to train national personnel in the same occupation.
Probation Period
At least 3 months for all employees, up to 6 months for qualified or trusted employees or 12 months for management employees. To be valid for more than three months, the probationary period must be in written in the contract.
Are offer letters mandatory in the country?
Not mandatory
Are digital signatures in labor contracts valid?
Permitted
Mandatory onboarding documents
• Resume
• Copy of Work Certificate
• Copy of Certificate of Professional or Technical Study
• Original Police Certificate
• Affidavit of address
• Copy of a utility bill
• 2 copies of valid ID
• AFP Affiliate Code
• 2 copies of ID of the wife or partner, if applicable
• Copy of Birth Certificate and DNI of the children, if applicable
• 2 passport-size photos
• Certificate of fifth category remuneration and withholdings
Statutory benefits
Annual Bonus
One month’s salary without discounts paid in July and one month’s salary without discounts in December.
It must be paid in the first fortnight of July and December. Likewise, the worker must have worked for a full semester, that is, from January to June or July to December, to receive a bonus equivalent to a full salary. (Law 27735)
Additional bonus
An extraordinary bonus that workers receive in the payment of legal bonuses granted for Christmas holidays and national holidays, which according to the provisions of the law is equivalent to 9%, if they are affiliated with EsSalud, or to 6.75 % if they are affiliated with the Health Provider Entity (EPS)
Leaves (medical, maternity, paternity, etc.)
• Maternity leave: 90 days, 45 days of parental rest and 45 days of postnatal rest.
• Breastfeeding: 1 hour per day ( Law 27240 and 27403)
• Adoption leave: 30 calendar days. (Law 27409 and 26981, regulation DS 010-2005-Mimdes)
• Paternity leave: 10 days of paid leave
• Sick Days: 365 days of paid sick leave. The employer must pay the first 20 days of sickness, the remaining 245 days are paid by social security
• Bereavement Leave: 5 working days for the death of spouse, parents, children and siblings and 8 days for the death of wife or partner before, during, or after their child birth
Annual Leave (days per year)
30 calendar days of annual leave for one year of service. By written agreement between the parties, vacation days may be brought forward, or split in as follows:
1) fifteen calendar days, which can be enjoyed in periods of seven and eight uninterrupted days; and, 2) the rest of the vacation period can be enjoyed in a fractional way in periods including less than seven calendar days and as a minimum of a calendar day.
Legislative decree 713.
How do vacation days expire?
Unused vacations expire when they are not taken during 1 year after one year of service. For expired vacations, the employee is entitled to receive an additional payment, equal to a triple vacation pay.
Official Holidays
• 1 Jan, New Year’s Day
• 6 Apr, Maundy Thursday
• 7 Apr, Good Friday
• 8 Apr, Easter
• 1 May, Labor Day
• 29 Jun, Feast of St Peter and St Paul
• 28 Jul, Independence Day
• 29 Jul, Independence Day Holiday
• 6 Aug, Battle of Junin
• 30 Aug, Santa Rosa de Lima
• 8 Oct, Battle of Angamos
• 1 Nov, All Saints’ Day
• 8 Dec, Immaculate Conception
• 9 Dec, Battle of Ayacucho
• 25 Dec, Christmas Day
Working on holidays and Sundays
2 options: day in lieu or double pay. Legislative Decree No. 713, norm that regulates paid breaks, Supreme Decree No. 012-92-TR.
Number of Working hours
8 hours a day, 48 hours a week.
Overtime
Paid at 25% extra on the top of the regular wage, for the first two hours; 35% thereafter.
Social Security (what does it cover)
• Health Social Security (EsSalud): healthcare services and financial help in case of disability through the payment of subsidies. Employers may provide private medical insurance, either through their own services or through Healthcare Service Providers (EPS). When providing such insurance, employers may get a credit of up to 2.25% of the contribution to EsSalud, which becomes 6.75%, subject to certain limits and conditions.
• Mandatory Life Insurance: This is a group insurance provided to employees who have rendered services to the same employer for over four years. However, the employer may optionally provide such insurance after the third month of services.
• Pension Systems: The employee may join the National Pension System (SNP) or the Private Pension System (SPP) which are mutually exclusive. The employee pays this contribution; the employer is solely responsible for withholding it. With SPP, the contribution comprises a credit to the individual capitalization account (10%) plus a premium for disability, survivors and funeral expenses insurance, plus the fee paid to Pension Fund Management Companies (AFP). Such fee is calculated based on the remuneration earned and on the pension fund balance.
Payroll
Salary payment currency
Peruvian Sol (PEN)
Can salary be paid in a different currency other than the local currency?
No
Payment frequency
Monthly.
VAT percentage
The VAT percentage for EOR services in Peru is 18%. Clients must pay this tax because EOR services are considered to be a taxable supply under Peruvian law. The relevant law is the General Law on Tax on Sales and on Services (Ley General del Impuesto a las Ventas y los Servicios – IGV).
Income Tax
Residents and non-residents are taxed at progressive income tax rates ranging from 8% to 30%
For more information see https://taxsummaries.pwc.com/peru/individual/taxes-on-personal-income
Tax Payer Identification Number
Unique Registry of Taxpayers – RUC (Registro Único de Contribuyentes)
Offboarding
Voluntary resignation
30 days written notice.
Contract termination
A contract is automatically terminated in the following cases:
• The death of the worker or of the employer if he/she is a natural person.
• The resignation or voluntary retirement of the employee, who must provide thirty (30) days prior notice.
• The termination of the work or service, the fulfillment of the resolutely condition and the expiration of the term in contracts legally entered into under a modality.
• Mutual dissent between the employee and the employer.
• Absolute permanent disability.
• Retirement.
• Dismissal, in the cases and in the manner permitted by the law.
• The termination of the relationship for objective cause, in the cases and forms permitted by the LPCL.
Justified Dismissal
In accordance with the principle of typicality, legal dismissal, i.e., justified dismissal, is that which is conducted on the basis of grounds provided by law, and which has been ordered in the following manner:
• For behavioral reasons :
1. The commission of serious misconduct.
2. Criminal conviction for intentional crime.
3. Disqualification of the employee.
• Supervening physical, intellectual, mental, or sensory impairments.
• Underperformance in relation to the worker’s ability and to the average performance in work under similar conditions.
Unjustified Dismissal
• Dismissal without Cause: When the employer does not state a legal cause or motive = Reincorporation / Compensation at employee’s election. Fraudulent Dismissal: When the employer falsely and fraudulently charges the employee of committing gross negligence = Reincorporation / Compensation at employee’s election
• Void Dismissal: When the measure violates the fundamental rights of the employee = Reincorporation
• Dismissal with Reasonable Charge of Gross Negligence: When the gross negligence is not proven during the process, although the procedure regulated by the law was properly followed = Compensation
• Indirect Dismissal: When the employee is the victim of acts of hostility comparable to dismissal = Compensation
“The compensation for unjustified dismissal:
a) forty-five (45) days of ordinary remuneration for each full year of services, with a minimum of ninety (90) days, up to a maximum of eight (8) years
b) thirty (30) days of ordinary remuneration for each additional year up to a maximum of eight (8) years.
c) to fifteen (15) days for each additional year up to a maximum of eight (8) years Fractions are paid for twelfths and thirtieths, provided that the compensation exceeds the minimum amount. (Art.176). The workers dismissed (laid off), collectively, for economic, technical or structural reasons referred to in article 176 ° have the right to receive the following compensation:
a) to twenty-two (22) days of ordinary remuneration for each complete year of services, up to a maximum of eight (8) years;
b) to ten (10) days of remuneration for each additional year up to a maximum of four (4) years; and
c) to seven (07) days for each additional year up to a maximum of four (4) years. The compensation for unjustified dismissal, […], is equivalent to:
a) forty-five (45) days of ordinary remuneration for each full year of services, with a minimum of ninety (90) days, up to a maximum of eight (8) years
b) thirty (30) days of ordinary remuneration for each additional year up to a maximum of eight (8) years; and
c) to fifteen (15) days for each additional year up to a maximum of eight (8) years Fractions are paid for twelfths and thirtieths, provided that the compensation exceeds the minimum amount. […]. (Art.176 LGT) The workers dismissed (laid off), collectively, for economic, technical or structural reasons referred to in article 176 ° have the right to receive the following compensation:
a) to twenty-two (22) days of ordinary remuneration for each complete year of services, up to a maximum of eight (8) years;
b) to ten (10) days of remuneration for each additional year up to a maximum of four (4) years; and
c) to seven (07) days for each additional year up to a maximum of four (4) years”
The severance payment corresponds to:
• Proportional salary for the current month
• Proportional amount of the statutory Annual Bonus
• Proportional amount of unused vacations
• Half salary plus one per year worked
The severance payment will be made within 48 hours from the end of the contract.
Minimum Notice Period
1 month.
Immigration
Visa process
The employee must be outside Peru and lack police, criminal and judicial records in the country of origin
1. The employee must apply in person for a provisional work visa at a local consulate
2. Wait until the visa is approved. The employee should receive a response within 30 calendar days
Visa documents
• Application form
• Copy of passport with a minimum validity of six months.
• Copy of the employment contract notarized or authenticated by DIGEMIN, with the exception of the cases included in Arts. 3 and 6 of Legislative Decree Nº 689, its regulation D.S.Nº 023-2001-TR and amendments.
• Document issued by a competent authority that proves the lack of judicial, criminal and police records in the country of origin.
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