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Global HR Compliance

Global HR Compliance in Peru

Understanding the nuances of labour legislation is crucial when planning to hire an international workforce in Peru. Our guide provides essential insights for companies aiming to navigate the local employment landscape.

Key Challenges in Hiring Internationally

  • Local Compliance: Ensuring adherence to Peruvian labour laws to mitigate risks of non-compliance and employee misclassification.
  • Establishing Local Presence: The complexities of setting up entities in foreign markets.

Our Global Employer of Record Solution

  • Comprehensive Employment Services: Employ your global sales force in Peru and beyond, across 180+ countries, with our support handling pay, benefits, and business expenses.
  • Risk Management: We bear all employment risks, ensuring full compliance with local legislation and protecting you from potential legal challenges.

Benefits of Global Employer of Record Solutions in Peru

  • In-House Hiring Experience: It mirrors the familiarity of hiring an in-house team but focuses solely on your global business development while we manage your HR tasks globally.
  • Infrastructure Leverage: No need to establish your own entities abroad; use our infrastructure in Peru to simplify operations.
  • Cost and Effort Reduction: Become a global company with significantly reduced costs and minimized effort on your part.

Employee Engagement and Compliance

  • Dedicated Workforce: Your hired foreign sales force will devote 100% of their time to your products, potentially staying longer than independent reps.
  • Local Expertise: Our team of English-speaking professionals eliminates language barriers and operates 24/7 to support your needs across time zones.
  • Legal and Compliant Solutions: Tailored labour solutions that adhere strictly to Peruvian employment laws.

Expertise and Local Partnerships

  • Trusted Provider: Our goal is to be your single provider, streamlining your global employment processes by eliminating the need to work with multiple staffing agencies and legal advisors.
  • Deep Local Knowledge: We understand the local nuances and are adept at satisfying your needs for skilled professionals in your industry.
  • Complete Legal Compliance: Ensures your global workforce meets all local tax, social security, and immigration requirements in Peru.

Conclusion

Express Global Employment is dedicated to simplifying your global hiring processes, allowing you to focus on expanding your business while we handle the complexities of employment compliance and administration in Peru and globally.

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.

Global Payroll Calculator – Your Precision Tool for Global Employment Cost Analysis

The Global Payroll Calculator (GPC) offers a sophisticated solution for instantly calculating employment costs across 190 countries, streamlining your global hiring strategy and ensuring cost-effective decisions.

Key Features & Benefits

  • Instant Cost Calculations: Quickly determine total employment costs, factoring in real-time tax rates and benefits for local and foreign talent in 190 countries.
  • Precision & Clarity: Achieve precise payroll calculations with detailed breakdowns of all payroll variables, ensuring transparency and preventing unexpected costs.
  • Cross-Country Comparisons: Utilise GPC’s capability to perform instant comparisons between countries, helping you identify the most advantageous locations for hiring.

Core Capabilities

  • Total Employment Cost Analysis:
    • Monthly and yearly costs.
    • Gross-to-net and net-to-gross calculations.
    • Detailed breakdowns, including employer liability and employee taxes.
  • Full Tax Breakdown:
    • Comprehensive coverage of social contributions, personal income tax, and automated tax caps.
    • Employer and employee tax splits with allowances and holiday entitlements.
  • Built-in Compliance:
    • Ongoing validation against trusted government sources.
    • Updates in real-time to reflect the latest tax and labour laws.

Advantages of Global Payroll Calculator for Employers 

  • For Employers:
    • Manage complex global payroll budgets effectively.
    • Identify tax-friendly, cost-effective global talent hotspots.
    • Ensure compliance with international regulations to avoid legal issues.
  • For Agencies:
    • Overcome data complexity and reduce proposal inefficiency.
    • Navigate global compliance challenges, enhancing accuracy and reputational trust.

Unique Solutions for Global Expansion Challenges

  • Express Global Employment Support: Backed by 20+ years of expertise, GPC is integrated with global EOR solutions to support your international workforce management.
  • Robust Methodology: Standardises diverse data into a clear, unified format, enhancing decision-making clarity across multiple jurisdictions.

With Global Payroll Calculator, you gain a powerful tool at your fingertips, designed to optimise your global employment strategies and ensure that your international operations are cost-effective and compliant. Enjoy a free trial to experience firsthand how GPC can transform your global payroll processes.

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

Peru’s normative daily working hours are 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 their qualifications. 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 in Peru

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. The employee must have been in the company for at least a month to benefit from the CTS.

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.