Employer of Record in Peru: Hire, Manage, and Pay Talent Seamlessly

Agreements in Peru

• Indefinite or Open agreement: If an employment agreement isn't assigned otherwise, it is regarded as a permanent employment contract.
• Definite or Fixed-term agreement: It must be in written format stating the terms and conditions of the employment. The fixed-term agreement in Peru must not exceed 5 years duration. It is considered an indefinite contract if the employee keeps working for more than 5 years.

Visa in Peru

• Temporary visas: These visas are typically issued to people entering the country for short-term purposes like tourism or business. These visas are valid for up to 183 days as the annual maximum stay. For students, diplomats, religious visits, etc. the duration is of up to 90 days.
• Residence visas: These visas can be obtained for 1 year or more. It is issued for things like employment, education, family reunions, etc. It can be extended for 1 more year.

Minimum Wage in Peru

Annual Bonus in Peru

• There is a legal provision for giving 13th and 14th salaries in Peru.
• These payments are given every 6 months in July (National Holiday Bonus) and December (Christmas Bonus) respectively.

Health Benefits in Peru

• Health benefits in Peru include a pension scheme, health insurance, mandatory life insurance, etc.
• These health benefits are provided by the employer with the contribution of employees.

Working hours and overtime in Peru

• Work hours: n employee must not work more than 48 hours per week and 8 hours per day. The standard working week in Peru is of 6 days starting from Monday.
• Break: An employee is entitled to a break of 20-30 minutes between regular work hours.
• Overtime: The employer has to pay 125% salary for the first two hours. After this time the employer has to pay 135% of the salary for the remaining hours.

Leaves in Peru

Social Security in Peru

• Social security in Peru covers a pension scheme, family allowance, Compensation for the Time of Service (CTS), and health insurance.
• Both the employer's and the employee's contribution towards the social security fund is 13%.

Taxes for employers in Peru

• Public Health Insurance - 9%
• Worker Compensation Insurance - 4%
• Family Allowance - 10%
• CTS is an ordinary remuneration deposited in the employee's chosen financial institution.

Probation in Peru

• The probationary period in Peru can be up to 6 months or 1 year for management employees.
• The duration of probation must be stated clearly in the employment agreement.

Termination in Peru

• resignation
• when the employee reaches retirement age
• when the employment contract expires or is not renewed
• when an employee can be fired for serious misconduct (such as theft, fraud, etc.)
• The worker must be given 30 days' notice before being dismissed. An appropriate justification for the termination must be stated in the letter of termination.

Severance Pay in Peru

• An employee is entitled to severance pay in Peru upon invalid termination by the employer.
• The employee gets 45 days of salary as severance pay for every year of service, up to a maximum of 12 months' base pay.

Employees or Contractors in Peru

• Misclassification of employees or contractors in Peru is a punishable offense.
• If found guilty, the employer is responsible for paying the overhead surcharges.
• The company is obligated to cover any related interests and penalties on behalf of a misclassified employee.
• The company may also have to pay taxes retrospectively on the behalf of the misclassified employee.