Hiring guide in Peru

What should I know about hiring in Peru?

Legal framework

Types of employment contracts

By default, any arrangement involving paid services is presumed to be an indefinite employment contract unless proven otherwise. Fixed-term employment contracts may be used when the nature of the work or service is temporary or incidental. However, intermittent or seasonal contracts, due to their inherent nature, can be considered permanent.

Temporary contracts are appropriate in specific situations, such as initiating or launching a new activity, addressing market demands, or undergoing business transformation. Accidental contracts, including occasional, substitution, and emergency contracts, are tailored to meet temporary business needs that don’t warrant long-term employment commitments.

Content of an employment contract

An employment contract in Peru typically includes several essential components. It must specify the date and place of conclusion, along with the personal information of both the worker and the company involved. A detailed job description outlines the activities and duties expected of the worker, while the work conditions section specifies the terms under which the work will be performed, including location, workdays, hours, breaks, vacations, and any targets or goals.

The contract also details the worker’s remuneration, listing the salary and any additional benefits, and specifies the duration of the agreement. If no duration is stated, the contract is presumed to be indefinite. Plus, the contract may include other terms or agreements mutually decided by the parties.

Download a free employment contract for Peru through Native Teams.

Oral, written or electronic employment contracts

Employment contracts in Peru can be either written or verbal, though using a written contract is strongly recommended for greater legal clarity and compliance.

Peruvian law states that a handwritten signature isn’t required for a contract to be valid. As long as legally competent individuals reach an agreement, the contract may be executed verbally, electronically, or in writing. 

In cases where the validity of a contract is disputed, additional evidence may be required to demonstrate its authenticity and ensure that its content remains unaltered.

Working hours

The standard working hours for legally employed individuals are set at a maximum of 8 hours per day and 48 hours per week. This applies equally to both men and women. Recognising the importance of work-life balance, the law permits the establishment of shorter working hours through various methods, such as legal provisions, mutual agreements between employers and employees, or a unilateral decision by the employer.

Night work

Night work is defined as any work performed between 10:00 PM and 6:00 AM.  Employers must, whenever possible, implement rotational night shifts to distribute the burden of night work evenly among employees. 

By law, employers are required to maintain detailed records of employees’ working hours, including night work and overtime. This ensures compliance with regulations regarding maximum working hours and overtime compensation. Proper record-keeping protects both employers and employees by providing clear documentation of hours worked and payment owed.

Breaks and types of leaves

Workers are entitled to at least 24 consecutive hours of rest each week, typically on Sundays. However, alternative schedules can be arranged when necessary. The remuneration for weekly rest is based on the number of days worked and may vary depending on the worker’s payment structure, such as weekly, biweekly, or monthly.

Employees are also entitled to a meal break during regular working hours, with the duration and specifics determined by the employer at each workplace, unless otherwise agreed. The meal break must last at least 45 minutes and is generally not considered part of the working day unless specified by a collective agreement. Plus, employees are entitled to a daily rest period of at least 8 consecutive hours between work shifts unless the nature of the work requires a different arrangement.

Annual leave

The distribution of vacation days must be agreed upon between the employer and the employee, with the agreement made in writing before the vacation begins. This agreement should clearly outline the terms of the division and specify the start and end dates for each vacation period.

Employees are entitled to 30 calendar days of vacation leave for each year of service. This leave can be taken continuously or split, as requested by the employee, provided the request is made in writing. The vacation leave can be divided as follows:

The first block must consist of at least 15 calendar days, which can be taken either continuously or divided into 2 periods — one lasting at least 7 calendar days and the other at least 8 days. The remaining vacation days may be taken in increments of no less than 1 calendar day.

Public holidays

The public holidays in Peru include New Year’s Day on January 1, Holy Thursday and Good Friday (which are movable), Labor Day on May 1, Saint Peter and Saint Paul on June 29, National Holidays on July 28 and 29, Saint Rose of Lima on August 30, Combat of Angamos on October 8, All Saints’ Day on November 1, the Immaculate Conception on December 8, and Christmas Day on December 25.

Salary

Employees with specialised skills or significant experience typically earn higher salaries, and educational qualifications, especially advanced degrees, can have a considerable impact on salary potential. Salaries in major cities, such as Lima, tend to be higher than in rural areas, and larger, more established companies generally offer more competitive salaries and benefits packages.

There are various resources available to assess competitive salary data in Peru, including sector-specific information published by the Peruvian Ministry of Labor.

The minimum wage in Peru is a legal requirement designed to ensure workers receive a baseline level of compensation. The National Council for Labor and Employment Promotion (CNTPE) and the Technical Commission on Productivity and Minimum Wages are responsible for setting the minimum wage, taking into account economic indicators such as inflation and productivity.

To calculate the salary and taxes in Peru, click here.

Sick leave

To qualify for health benefits, employees must have made contributions for at least 3 consecutive months or 4 non-consecutive months within the 6 months preceding the onset of disability.

For regularly insured employees, eligibility for sick leave benefits requires 3 consecutive months or 4 non-consecutive contributions in the 6 months prior to the start of the disability period. The right to receive a subsidy from the Social Security Health system begins on the 21st day of disability. During the first 20 days of disability, the employer is obligated to continue paying the employee’s salary or compensation.

Paternity and maternity leave

A pregnant worker is entitled to a total of 49 days of prenatal leave and 49 days of postnatal leave. The worker may choose to defer some or all of the prenatal leave to be added to the postnatal leave, provided this decision is communicated to the employer at least 2 months before the expected delivery date.

Paternity leave is available to fathers for 10 consecutive calendar days in the case of a natural birth or a caesarean section. After paternity leave ends, the employee may use any remaining vacation leave, starting the day after the paternity leave concludes. The employer must be notified of the intention to take vacation leave at least 15 calendar days before the anticipated delivery date.

Methods of employment termination

Termination of employment can occur for various reasons related to the natural course of the employment relationship. These include the death of either the worker or the employer, voluntary resignation or withdrawal by the employee, the completion of the work or services outlined in the contract, and the fulfilment of a resolutive condition that legally ends the contract.

Other common grounds for termination include the expiration of fixed-term contracts, mutual agreement between the employer and employee, retirement, and permanent absolute disability of the worker.

A contract can also end through dismissal, which must comply with the procedures and reasons established by Peruvian law. Dismissal for objective reasons may occur due to an enforceable judicial sentence or collective dismissal resulting from economic, technological, or structural changes that impact the company. Both parties may also mutually agree to terminate the employment relationship, provided the agreement is formalised in writing.

It’s important to note that Peruvian labour law doesn’t differentiate between ordinary and extraordinary dismissal; however, all dismissals must adhere to the legal standards for valid termination.

Notice period and challenging the dismissal

If a dismissal is deemed null, the employee can request the court to declare it invalid and reinstate them to their previous position. In cases where the dismissal is considered unjustified, the employee may choose either reinstatement or compensation.

For voluntary resignation or withdrawal, the employee is required to provide written notice 30 days in advance. The employer may waive this notice period at their discretion or upon the employee’s request. If the employer doesn’t respond within 3 days, the request is considered accepted.

Severance pay

Unfair dismissal occurs when an employer terminates an employee’s contract without a valid legal reason as prescribed by law. In such cases, employees are entitled to receive legal compensation, which is calculated as follows:

For employees with an indefinite employment contract, the compensation is 1.5 times the employee’s monthly salary for each year of service. For periods of service less than 1 year, the compensation is calculated proportionally.

For employees on fixed-term contracts, the compensation is also 1.5 times the employee’s monthly salary for each month remaining until the end of the contract.

Probationary period

The probationary period for employees is usually set at 3 months. This period allows both the employer and the employee to assess whether the employment relationship is mutually beneficial. However, under certain circumstances, the probationary period may be extended if the nature of the work requires additional training or adaptation or if the role’s level of responsibility justifies a longer assessment period.

Intellectual property rights

For patents, when an employee creates an invention as part of their work, particularly if their role involves inventive activities, the rights to the patent typically belong to the employer. This is based on the idea that the invention results directly from the employee’s professional duties. 

As a result, the employer is considered the rightful owner of the patent unless otherwise specified in the employment contract. This principle ensures that companies retain control over innovations developed through their employees’ work.

Trademarks, on the other hand, follow a different framework. In Peru, the ownership of a trademark isn’t tied to the employment relationship but rather to the registration process. The party that registers the trademark with the Peruvian Trademark Office is recognised as the owner, regardless of who contributed to its design or creation during the employee’s tenure.

Employee data privacy

From a labour law perspective, employers have the right to enforce certain rules regarding the use of company resources. Employers have the authority to discipline employees for violations of their employment obligations as long as the disciplinary actions are reasonable. 

In addition, the law outlines valid grounds for dismissal, including breaches of good labour faith, failure to comply with internal work regulations, and improper use of the employer’s resources, such as electronic tools like computers and the internet. As a result, employers can establish internal policies that govern the appropriate use of the Internet and communication tools at the workplace, setting clear expectations for acceptable usage.

Prohibition of competition

If the employer intends to enforce a non-competition restriction after the employment relationship ends, it must be explicitly outlined in writing in the employment contract and agreed upon by both parties.

The validity of a post-employment non-competition clause depends on more than just being in writing. The restriction must be reasonable and can’t unjustly infringe on the employee’s constitutionally guaranteed right to work. 

The duration of the non-compete period should be clearly defined and kept within a reasonable time frame, ensuring that the employee is not overly restricted in seeking future employment. Similarly, the geographic scope of the non-compete must be specified, ensuring that it doesn’t unduly limit the employee’s ability to secure new work in other regions or industries.

Remote working policy

Remote work is defined as work performed either habitually or temporarily, continuously or intermittently, from the worker’s home or another location. This type of work is carried out without direct and immediate supervision by the employer. However, the employer retains the right to determine the methodology and techniques for performing the work.

Employers and employees must agree on whether the teleworking arrangement will be fully remote or partially remote. In cases of partial teleworking, the amount of time the employee must spend physically present at the employer’s premises should be clearly defined. Plus, the duration of the teleworking arrangement, whether temporary or permanent, must be specified.

Responsibilities within a remote work arrangement

Teleworkers are entitled to the same rights as employees or civil servants working on-site, based on the labour regime they are governed by. This includes the provision of necessary working conditions such as equipment, internet access, and financial compensation for these services, as well as reimbursement for energy consumption. 

Teleworkers also have the right to digital disconnection and must be guaranteed privacy and confidentiality for their personal communications and documents, consistent with the nature of telework. Moreover, they must be informed about health and safety measures applicable to remote work.

In terms of responsibilities, teleworkers must personally carry out their duties without involving third parties. They are expected to complete assigned tasks within designated working hours and adhere to all instructions given for performing telework.

Health and safety at home

Employers must conduct regular risk assessments of the workplace, at least annually, to protect employee well-being, including in remote work settings. This involves providing appropriate personal protective equipment (PPE) tailored to the specific occupational risks employees face and ensuring its proper use.

In addition, employers are required to maintain a safety and health service that organises first-aid measures and emergency procedures in case of a workplace incident. For any employer-provided facilities, such as canteens or housing, the employer must monitor the environmental conditions and work practices that could impact employee health and safety.

What are the advantages of hiring employees from Peru vs other countries?

The main advantage of Peru is the low wages. Employment benefits such as health insurance and social security contributions are also generally more affordable compared to other nations.

For U.S.-based companies, Peru’s location and time zone (similar to U.S. Central Time) makes collaboration and communication easier compared to hiring from Asia or Europe. In addition, Peru has reputable universities and technical schools, producing a pool of skilled professionals in fields like engineering, IT, and finance.

Why use Native Teams for hiring in Peru?

Native Teams lets you employ team members ‘like a local’ meaning you get all the benefits of a global team, wherever you are based. Here are the reasons why you should use Native Teams for hiring:

• No paperwork: We will handle all the necessary paperwork for you.
• Save on taxes: We help you handle your taxes.
• No company set up: You can expand your business using our company entitles.
• Online onboarding: We’re here to ensure your onboarding process is trouble-free.
• No accounting: We will handle all of your accounting needs, including invoicing, payroll, and more.
• Increase your profit: We assist you in growing your business and maximising your profits.
• Compliance expertise: we can assist your company in navigating the regulatory environments and ensure you meet all relevant requirements.

Local support: We can assist you in understanding and complying with the relevant local laws.