A Peru Employer of Record (EOR) plays a crucial role in simplifying the hiring process and ensuring compliance with labor laws. By partnering with an EOR, businesses can concentrate on their core operations while delegating HR tasks, payroll management, and statutory employment requirements. This collaboration offers a cost-effective solution for employers to hire and expand into new markets without the need to set up a legal entity, 

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Expanding your team in Peru requires navigating the complexities of local employment regulations and effectively managing compliance, payroll, tax, and benefits.

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With Gloroots' Peru Employer of Record (EoR) service, you can confidently delegate the intricacies of payroll, tax, benefits, and compliance to our experienced team. This enables you to focus on your core business operations, empowering your workforce and driving business growth. Our Peru EoR & PEO ensures strict adherence to all local laws and regulations, providing a seamless and efficient solution for successful team expansion in the country. With access to a diverse pool of exceptional talent and our market expertise, Gloroots' Recrew platform makes recruiting in Peru a seamless and rewarding experience, contributing to your company's success and development.

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Misclassifying employees in Peru can lead to legal and financial risks, including claims for unpaid wages and benefits. Partnering with a PEO/EOR ensures proper employee classification, compliance with labor laws, accurate payroll processing, and access to comprehensive benefits, mitigating potential liabilities and allowing businesses to focus on core operations.

The Unified Text of Legislative Decree No. 728, Labor Productivity and Competitiveness Law is the source for all employment laws in Peru. This law consolidates and establishes the general framework for most labor relations in the country.

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Partner with a Peru PEO or EOR to stay compliant with these hiring laws.

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Employment contract

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The employment contract, specifically, is governed by Legislative Decree N° 728 Labour Productivity and Competitiveness Law (LPCL), which in its Titles I and II establishes the rules covering hiring mechanisms for an indefinite term as a rule and for a fixed or determined term as an exception.

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Employment agreements for permanent employees can be written or oral. However, contracts for part-time and fixed-term employees must be in written form. Fixed-term contracts can extend up to five years and should include additional details, such as their intended duration and the reasons for their conclusion.

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Employment contract must contain the following details: 

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• Identification of both parties
• Commencement date (and employment duration for temporary contracts).
• Workplace.
• Job description, duties, and responsibilities.
• Basic salary and other compensation or benefits.
• Working hours.
• Total number of holidays.
• Notice periods for employment termination.
• Probation period.
• Reasons for choosing a fixed-term contract (if applicable).
• Health and safety obligations.
• Data protection obligations.

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It's important for employers to understand the intricacies of these programs before making a hire. This might sound overwhelming, but it doesn't have to be. A solution like Gloroots eliminates the barriers for you. With Gloroots' Peru Employer of Record offering, hiring and managing employees globally is a piece of cake.

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Get an overview of what you need to know when hiring in Peru. Contact us.

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Working Hour

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The standard working hours for full-time employment are 8 hours per day, amounting to a total of 48 hours per week.

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Overtime

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Any hours worked beyond the standard 48-hour week are considered overtime and are compensated at a rate specified in the employment contract or collective agreements. The initial two hours of overtime must be paid at a rate not lower than 25.00% of the employee's total remuneration. Subsequent overtime hours should receive a surcharge of no less than 35.00% per hour. Some exceptions may apply to certain job roles, including managers, supervisors, on-call workers, and non-supervised workers.

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Minimum Wage

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The mandated minimum wage in Peru stands at 1,025 PEN per month.

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Sick Pay

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In Peru, employees are granted 365 days of paid sick leave. During the first 20 days of sickness, the employer pays 100% of the employee's salary. For the subsequent 245 days, the employer initially covers 70-80% of the salary. Employers can reimburse this amount from the social security agency.

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Maternity leave 

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Female employees in Peru are entitled to 98 days of paid maternity leave, with 49 days granted before the child's birth and 49 days after delivery. In cases of multiple or complicated births, the leave can be extended by 30 days.

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Maternity leave is compensated by the National Health System (EsSalud) or the Private Health System (Entidades Promotoras de Salud or EPS). 

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To qualify for maternity benefits, the employee must have completed three months of service within the six months before taking the leave.

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In case of adoption, mothers in Peru receive 30 days of paid adoption leave. However, this leave can be availed only until the child is 12 years old.

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Annual leave 

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After completing one year of employment with the employer, employees in Peru are granted 30 calendar days of paid annual leave.

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INCOME TAX

Employee Income Tax

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Employer Payroll Contributions

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Employee Payroll Contributions

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Termination Process

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The termination process in Peru depends on the employment agreement, collective agreement, contract type, and reason for termination. Employees should receive a written notice of at least six days, allowing them to respond or demonstrate their capabilities within the company. The employer is required to provide written termination to both the employee and the trade union.

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In cases of dismissal without cause, employees are generally entitled to receive severance pay, which can be up to 12 months' worth of compensation.

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Severance Pay

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There is no mandated severance entitlement, but in cases of unfair dismissal (when the company lacks a valid legal reason to terminate employees), an indemnity is payable.

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For unfair dismissal on an indefinite employment contract, employees are entitled to receive a legal indemnity equivalent to 1.5 times their monthly remuneration for each year of service. If the employee is on a fixed-term contract, periods less than one year will be paid proportionally at 1.5 times their monthly remuneration for each month remaining until the end of the contract, if applicable. The indemnity in both cases cannot exceed 12 monthly salaries.

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Notice Periods

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Employers are required to provide notice of 6 to 30 days, depending on the reason for dismissal. Conversely, if an employee decides to resign, they must give the employer a minimum of 30 days' notice.

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Probation Periods

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In Peru, employment contracts specify probation periods, which typically last for three months. However, for skilled workers or employees in positions of trust, the probationary period can be extended to six months, and for managerial roles, it may last up to one year.

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