Guide to employment, payroll and benefits in

Uruguay

Rivermate offers complete payroll, benefits and compliance services for

Uruguay

01. Overview

Last updated: 

August 19, 2021

Currency
Uruguay Peso En Unidades Indexadas
Capital
Montevideo
Ease of doing business
61.5
Language
Spanish
Population
3473730
GDP growth
2.66%

02. Grow your team in

Uruguay

with Rivermate

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

Uruguay

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

Uruguay

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

Uruguay is a South American country whose official name is the Oriental Republic of Uruguay. It is bordered on the west and southwest by Argentina, and on the north and northeast by Brazil, and on the south by the Rio de la Plata and the Atlantic Ocean. Uruguay has a population of 3.51 million people, with 2 million living in the metropolitan area of Montevideo, the country's capital and largest city. It is the second-smallest country in South America, after Suriname, with an area of approximately 176,000 square kilometers. Before the Portuguese founded Colónia do Sacramento in 1680, Uruguay was occupied by the Charra people for approximately 4,000 years; Uruguay was colonized by Europeans relatively late in comparison to neighboring countries. The Spanish built Montevideo as a military fortress in the early 18th century, symbolizing the region's conflicting claims. Uruguay gained independence between 1811 and 1828, after a four-way conflict involving Portugal, Spain, Argentina, and Brazil. Throughout the 19th century, it was subject to international interference and invasion, with the military playing a prominent role in domestic politics. A series of economic crises brought an end to a democratic era that began in the early twentieth century and culminated in a coup in 1973 that created a civic-military dictatorship. Leftists, communists, and political rivals were imprisoned by the military government, which resulted in many deaths and several cases of torture before handing over power to a civilian government in 1985. Uruguay is now a federal parliamentary republic with a president who is both president and prime minister. Uruguay has a high-income economy and is ranked first in Latin America for democracy, stability, low corruption perceptions, and e-government, as well as first in South America for press freedom, middle-class size, and prosperity. Uruguay contributes more forces to UN peacekeeping operations than any other nation on a per-capita basis. In the Global Terrorism Index, it is the lowest-ranking South American country, and it ranks second on the continent in terms of economic freedom, income equality, per-capita income, and FDI inflows. In terms of the Human Development Index, GDP growth, innovation, and infrastructure, Uruguay is the continent's third-best nation. Uruguay is known as one of Latin America's most socially egalitarian nations. It scores well on international indices of personal freedom, equality, and inclusion, as well as acceptance of the LGBT community. Cannabis has been legalized in the country, as has same-sex marriage and abortion. Uruguay is a founding member of the United Nations, the Organization of American States (OAS), Mercosur, and the Non-Aligned Movement (NAM).

04. Public holidays

05. Types of leave

Paid time off

After one year of work, employees are entitled to paid vacation time of at least 20 days, with an additional day of vacation time after every four years of service.

Public holidays

The following public holidays are observed in Uruguay:New Year’s DayCarnival MondayCarnival TuesdayMaundy ThursdayGood FridayLanding of the 33 Patriots DayLabor Day/May DayBattle of Las PiedrasJose Artigas’ BirthdayConstitution DayIndependence DayDay of the RacesAll Souls’ DayChristmas Day

Sick days

Employees are entitled to up to a year of sick leave. Employees who are eligible for benefits are paid through Uruguay's social security system, the Banco de Previsión Social (BPS).

Maternity leave

Maternity leave is compensated for 14 weeks for female employees. The first six weeks of maternity leave can be taken before the baby is born, and the remaining eight weeks can be used once the baby is born.

Paternity leave

Paternity leave is compensated for 13 days for the father.

Parental leave

Apart from maternity and paternity leave, there are no provisions in the law in Uruguay regarding parental leave.

Other leave

06. Employment termination

Termination process

Generally, the rights and duties for terminating an employment contract are specified in an individual or collective bargaining agreement. This includes the procedure for terminating an employee and any notice period required.


Employers are not compelled to pay severance for contract breaches, but may be required in other instances. Severance pay is one month's income for each year of service, up to a maximum of six months.

Notice period

A 1.5-week notice period should be provided.

Severance pay

Employees are entitled to severance pay of up to six months' salary for each year worked.

Probation period

It is customary to have a probationary period of up to three months.

07. Working hours

General

In Uruguay, the industrial sector's standard working hours are 48 hours per week spread over six days and eight hours per day. The limit in the commercial sector is 44 hours per week and eight hours per day.

Overtime

In general, overtime hours are compensated at 100% of the standard wage on regular days and at 150% of the standard wage on non-working days such as holidays and Sundays. Overtime hours are limited to eight per week.

08. Minimum wage

General

Uruguay's minimum wage is 10,000 Uruguayan pesos per month.

09. Employee benefits

General

The commercial and governmental sectors are both represented in the National Integrated Health System. The Administración de los Servicios de Salud del Estado (ASSE), or State Health Services Administration, is in charge of public health services. In addition to governmental health services, Las Instituciones de Asistencia Médica Colectiva (IAMC), or Collective Medical Care Institutions, are private organizations that offer health services.

Mandatory benefits postulated by law include a probationary period, pay on annual leaves, public holidays, sick leaves, maternity leave, paternity leave, and overtime pay. Statutory benefits also include social security benefits.

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

Establishing an entity in

Uruguay

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

Uruguay

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

Uruguay

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

Uruguay

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

Uruguay

via our Employer of Record / PEO solution.

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