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  1. Overview: Peru
  2. Global HR Compliance
  3. Work permit for hiring expats via PEO
  4. Global PEO and payroll
  5. Expand without a company set up
  6. Contractor vs. employee: which is better?
  7. Global Payroll Calculator
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Global HR Compliance in Peru

If you hire an international workforce or plan to hire, then the Hiring and Firing Workforce in Peru Guide below will help you understand the nuances of labour legislation in the country.

When the company is planning to enter a new foreign market in Peru and needs to employ a local national there, the first question to answer is how it will make local hires.

We have designed a Global Employer of Record service to help you outsource the global employment of your foreign workforce to companies like ours.

This solution helps you employ your global sales force in Peru as well as in other 180+ countries of the world, provide pay and benefits to your employees, as well as administer any business expenses with our help.

Our solution is different from other hiring modes in that it helps you engage your foreign workforce in full compliance with the local labour legislation. This means you are protected from non-compliance and employee misclassification risks, while we bear all employment risks, not you.

So, it looks very much like hiring your in-house sales force in your home country. However, you focus only on your global business development while we administer your global HR. In addition, you don’t need to open your own entities in foreign countries and can leverage our infrastructure in Peru instead. With our service, you can become a global company with reduced costs and minimized time and effort on your end.

Your employed foreign sales force will devote 100% of their time to your company product and may stay with you longer than foreign independent sales reps.

Global Employer of Record solution is a 100% compliant solution that guarantees you and your employees full compliance with local legislation in Peru.

We are experts in global workforce employment in Peru, and our goal is to become your single provider. Instead of working with numerous local staffing agencies and legal advisors, Express Global Employment can solve your global business challenges and save you time, costs, and resources.

Our team of English-speaking professionals frees you from working through language nuances. Express Global Employment works 24/7 and can assist you whenever you need it, regardless of time zones. Our goal is to create tailored labour solutions for you that are managed legally and in full compliance with local employment laws.

With our knowledge and deep understanding of local nuances, you easily satisfy your need for skilled professionals in your global industry. With our qualified local partners, you can trust that your global workforce satisfies all local tax, social security, and immigration requirements in Peru.

See the Hiring and Firing Workforce in Peru Guide below for a general overview of labour rules and regulations in the country. Or contact us if you need to employ workers in Peru or would like to get more details.

Hiring and Firing Workforce in Peru Guide

Peru is one of the fastest-growing economies in Latin America, with a relatively stable economy and a lot of investment in the development of their infrastructure, ecosystem and business environment at large. Despite these facts, doing business in Peru can be difficult and sometimes discouraging, especially for foreigners who may know little or nothing about the country’s business environment. Here are a few tips to be aware of that will help you when conducting business in Peru.

Employment Contracts

An indefinite contract may not be provided in writing. Definite-term contracts and all employment contracts for expatriate workers must be concluded in writing. A definite term contract must be given up to a maximum period of 5 years. The maximum duration of any employment contract to expatriate employees is 3 years but can be renewed afterwards by up to the same maximum duration. It is important to remember that foreign employees shouldn´t exceed 20% of the workforce, and the total salary received by foreign employees shouldn´t exceed 30% of the total company payroll. Exceptions regarding a higher salary can be made in the case of technical employees or management positions.

Minimum statutory employment rights

Hours of work

The normative daily working hours in Peru is 8 hours and 48 hours per week.

Probation period

Employers have the right to try their new employees for 3 to 12 months, depending on the qualification of the employees, and only after successful probation can they obtain a legal right against unjustified dismissal.

Annual leave

Peruvian workers have the right to about 12 public holidays: New Year’s Day, Australia Day, Good Friday, Labor Day, Feast of Saints Peter and Paul, Independence Day celebrations, Saint Rosa of Lima Day, Naval Battle of Angamos, All Saints’ Day, Immaculate Conception, Christmas Day; and any other regional holidays provided for by provincial governments.
Employees are entitled to 30 days of paid leave annually for every complete year of services they provide to the employer. Employees on annual leave have the right to receive a leave benefit equivalent to their monthly wage.

Parental leave

Female employees are eligible for 98 days of paid maternity leave, with 49 days taken during pregnancy and the remaining 49 days used after child delivery. After the official 98-day period, the lactation period begins. Until the newborn is 1 year old, the mother has the right to be away from the workspace for 1 hour per day to breastfeed the child. Male employees whose partner had just been put to bed are entitled to 4 days of paid paternity leave.

Sick leave

The duration of the sick leave depends on the employee’s disability for working.
For the first 20 days of disability, the employer has to pay the corresponding salary to cover the sick leave. After this period, the Social Security Service pays – in fact, the employer pays and is later reimbursed by the Social Security Service – the sick leave with the amount of the disability subsidy for 11 months and 10 days.

Overtime

Overtime is considered any hours that are in excess of the regular 8 working hours per day and 48 hours per week. Employers are required to appropriately compensate for every overtime or otherwise be faced with a fine. Overtimes are paid with a surcharge to be agreed upon, but for the first 2 hours, it may not be less than 25% per hour, calculated on the remuneration received by the employee. The remaining hours shall not be less than 35% per hour. Employers must pay their employees at a higher rate for any job performed at night. The employees cannot be paid less than the monthly minimum wage plus a surcharge of 35% as a minimum for night work.

State minimum salary

Peruvian Labor Law Highlights (2023)

  • Minimum Wage: 1,025 PEN (September 2023)

  • Bonuses: Two annual bonuses, each equivalent to one month’s salary

  • Compensation for Time of Service (CTS):

    • Employer-funded benefits for terminated employees
    • Accrued monthly, deposited semi-annually
    • Equivalent to one month’s salary at the end of the year

Please note that the minimum wage and bonus amounts are subject to change. It is always advisable to check with the Peruvian Ministry of Labor for the most up-to-date information. Compensation for Time of Service (CTS – Compensation por Tiempo de Servicios):
This law is a social benefit to protect the existence of the employee after the termination of employment. This amount is accrued over time starting on the first day of work. To ensure that the compensation is available, the employer must deposit the CTS twice a year (on the 15th of May and -November) to a bank account that the employee can elect. For each completed calendar month, 1/12 of the wage must be deposited in the bank account. Therefore, at the end of the year, the whole deposit should be approximately equal to one monthly salary. To benefit from the CTS, the employee must have been in the company for at least a month.

Employment Termination

An employee is eligible to get at least 6 days up to 30 days’ notice in writing before the employer can terminate his contract of employment. Employees whose contracts are cancelled for objective reason(s) are entitled to receive a compensation fee up to a maximum of 12 months period and a letter of reinstatement (for invalid dismissal). Also, the employer must give the employee a written note stating the reasons for the decision and the intended date of termination. An employee dismissed with no just cause must be given severance pay, which depends on his previous work history. Those who are dismissed on the basis of gross misconduct may not be given any prior notice before their dismissal and severance pay. In the case of illegal dismissal of an employee, the employer will be required to compensate the employee with an amount equivalent to his average monthly pay for every month he worked in the company for up to 12-month periods.

Express Global Employment can help you fast-track your possibilities of entering and expanding your business in Peru by providing you with our Employer of Record services. Our unique global employment solutions will enable you to jumpstart your global operations immediately, cost-effectively and compliantly without needing to set up a legal entity first or afterwards.

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