Guide to employment, payroll and benefits in

Peru

Rivermate offers complete payroll, benefits and compliance services for

Peru

01. Overview

Last updated: 

August 19, 2021

Currency
Peruvian Nuevo Sol
Capital
Lima
Ease of doing business
68.7
Language
Spanish
Population
32971854
GDP growth
2.53%

02. Grow your team in

Peru

with Rivermate

Payroll, benefits, taxes, and compliance can be difficult to manage in

Peru

, particularly if you don't have established local relationships. You can hire employees in

Peru

effectively, conveniently, and in full compliance with all relevant labor laws using Rivermate's global employment solution. We handle the responsibilities and legal risks associated with foreign employment so you can concentrate on growing your company.

03. Summary

Peru is a country in western South America, officially known as the Republic of Peru. Ecuador and Colombia border it on the north, Brazil on the east, Bolivia on the southeast, Chile on the south, and the Pacific Ocean on the south and west. Peru is a megadiverse nation with ecosystems ranging from the arid plains of the Pacific coastal zone in the west to the Andes mountain peaks stretching from the north to the southeast of the country to the tropical Amazon Basin rainforest in the east with the Amazon river. Peru is the 19th largest nation in the world and the third largest in South America, with 1.28 million km2. Several ancient peoples lived in Peruvian territory. From the Norte Chico civilization, which began in 3500 BCE and is one of the five cradles of civilization, to the Inca Empire, the largest pre-Columbian state in the Americas, the territory that now includes Peru has one of the longest histories of civilization of any region, dating back to the 4th millennium BCE. In the 16th century, the Spanish Empire invaded the region and created a viceroyalty that included much of its South American territories, with Lima as its capital. In 1551, the National University of San Marcos in Lima became the first institution of higher learning in the Americas. Peru declared independence in 1821, and it was completed in 1824, following the international military campaigns of José de San Martn and Simón Bolvar, as well as the decisive battle of Ayacucho. The nation enjoyed relative economic and political stability in the years following, which ended shortly before the Pacific War with Chile. Peru experienced armed territorial disputes, coups, civil instability, and internal conflicts in the twentieth century, as well as periods of peace and economic growth. Alberto Fujimori was elected president of Peru in 1990, and his government is credited with stabilizing the economy and putting an end to the Shining Path insurgency, despite widespread accusations of human rights abuses and repression of political dissent. In 2000, Fujimori resigned as president and was charged with and imprisoned for human rights abuses. Fujimori's supporters, known as Fujimoristas, also caused political instability for any competing party in power even after the president's rule ended. After a corruption scandal became public, the last elected president, Pedro Pablo Kuczynski, resigned in March 2018 to prevent impeachment by a Fujimorista-dominated congress. Peru is a sovereign state that is divided into 25 regions and is governed by a parliamentary democratic republic. Peru is a developing nation with a high level of human growth, an upper middle income level, and a poverty rate of about 19 percent, ranking 82nd on the Human Development Index. With an annual growth rate of 5.5%, it is one of the region's most stable economies.

04. Public holidays

05. Types of leave

Paid time off

Every year, employees are entitled to 30 days off. A minimum of 15 days must be taken, with the remaining 15 days being able to be paid out.

Public holidays

Peru recognizes twelve public holidays.

Sick days

The employer pays for the first 20 days, while the state pays for the rest (ESSALUD).

Maternity leave

Mothers are entitled to 98 days of fully paid leave, which is funded by ESSALUD.

Paternity leave

Fathers in Peru are granted 10 days of paid leave which is shouldered by the employer.

Parental leave

Peru labor laws do not require companies to employ parental leave.

Other leave

06. Employment termination

Termination process

Employees may be terminated objectively or for cause, provided that documentation is provided. In general, employees should receive at least six calendar days of written notice to answer in writing or thirty calendar days to demonstrate their capabilities. The firing decision and justification should also be communicated in writing to the employee's trade union. Employees who are terminated without cause are normally entitled to up to 12 months of severance compensation.


Termination of temporary employment must occur in accordance with the contract's expiration date. Permanent termination of employment must be either voluntary resignation or dismissal for cause.

Notice period

Employees must give at least 30 days notice when resigning. Employers must generally give an employee at least six calendar days' notice to prepare a written defense to any charges brought against them, or 30 calendar days to demonstrate the employee's performance capability or to correct any error. There is no requirement for notice if the employee has engaged in serious misconduct that makes requiring the employer to continue the employment relationship unreasonable.

Severance pay

Severance is generally not required in cases of separation due to an employee's conduct or capacity. In general, an employee who is terminated without cause is entitled to severance pay for up to twelve months, depending on the circumstances surrounding the former employee's employment history. Under Peruvian law, no specific redundancy pay is required. If a court finds that a dismissal was unlawful because the employer failed to provide a valid reason to the employee or the reason could not be legally substantiated, the employee is typically entitled to a payment equal to the employee's average monthly compensation for each year of service, up to a maximum of twelve months.

Probation period

Three months may be included in the probationary period. An extension may be granted if the work requires training and adaptation or if the nature of the work necessitates it. Extensions must be in writing and are limited to six months for skilled workers and employees in positions of trust, and one year for managerial positions.

07. Working hours

General

The standard workweek is 48 hours and the day is eight hours.

Overtime

Overtime compensation should be agreed upon between the employer and employee. However, the first two hours cannot be compensated at less than 25% of the employee's total compensation. The surcharge cannot be less than 35% per hour for each additional hour.

08. Minimum wage

General

The monthly minimum wage in Peru is set at 930 PEN.

09. Employee benefits

General

Peru features a hybrid public-private healthcare system.

Supplemental health insurance is often provided by employers.

Employees are usually eligible to life insurance after four years of employment.

10. Why Rivermate as your Employer of Record / PEO?

Establishing an entity in

Peru

to hire a team takes time, money, and effort. The labor law in

Peru

has strong worker employment protection, requiring great attention to details and a thorough awareness of local best practices. Rivermate makes expanding into

Peru

simple and effortless. We can assist you with hiring your preferred talent, managing HR and payroll, and ensuring compliance with local legislation without the hassle of establishing a foreign branch office or subsidiary. Our PEO and Global Employer of Record solutions in

Peru

give you peace of mind so you can focus on running your business.

Please contact us if you'd like to learn more about how Rivermate can help you hire employees in

Peru

via our Employer of Record / PEO solution.

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