Employment law in Peru
Employment law in Peru is governed by a comprehensive set of laws and regulations that aim to balance the rights and obligations of employees and employers, protect workers’ rights, and ensure fair labor practices. The main source of employment law in Peru is the Peruvian Labor Code (Ley de Productividad y Competitividad Laboral), which outlines provisions for wages, benefits, working conditions, termination of employment, and more.
Here is an overview of employment law in Peru:
1. Employment Contracts
Written Contracts: In Peru, employment contracts are generally required for employees working on a permanent basis, but the contract does not always need to be in writing unless stipulated by the nature of the work. Written contracts are typically used for fixed-term or temporary employment or when the employer and employee want to clearly define the terms of employment.
For indefinite-term contracts, employers are encouraged to provide written contracts to avoid potential legal disputes.
Probationary Period: Employment contracts often include a probationary period, usually lasting up to 3 months, during which either party can terminate the contract without cause, although the employee must still receive statutory benefits like salary and compensation during this period.
2. Wages and Salary
Minimum Wage: In Peru, the minimum wage is set by the government and periodically adjusted. As of 2023, the minimum monthly wage is S/ 1,025 (around USD 270). Employers must comply with the legal minimum wage, but many employers pay more, depending on the sector and job type.
Payment of Wages: Salaries in Peru are generally paid on a monthly basis. Employers must provide employees with a pay slip outlining wages, deductions, and other benefits. Overtime pay applies to employees working beyond standard hours, and overtime is typically paid at 1.25 times the regular hourly rate.
3. Working Hours and Rest Periods
Standard Working Hours: The Labor Code establishes that the standard working hours in Peru are 8 hours per day or 48 hours per week, typically spread across 6 working days (with Sunday being the standard weekly day off). Alternatively, workers may have 44-hour workweeks depending on the sector.
Rest Breaks: Workers are entitled to at least 45 minutes of rest for every 6 hours of continuous work.
Night Work: Employees working during the night (from 10:00 PM to 6:00 AM) are entitled to additional compensation for night shifts.
4. Leave Entitlements
Annual Paid Leave: Employees in Peru are entitled to 30 calendar days of paid annual leave after completing one year of service. This leave can be taken as a block or in segments, but the employer and employee should agree on how to schedule it.
Sick Leave: Employees who are temporarily unable to work due to illness are entitled to paid sick leave for up to 20 days per year at full salary. After 20 days, the employee may be eligible for sick leave benefits through EsSalud, the Peruvian national healthcare provider.
Maternity Leave: Female employees are entitled to 90 days of paid maternity leave (45 days before and 45 days after childbirth). The leave is paid at 100% of the employee's salary, and the employee must have worked at least 3 months with the employer to qualify for full benefits.
Paternity Leave: Fathers are entitled to 4 days of paid paternity leave following the birth of their child.
Public Holidays: Peru has several national public holidays, including Independence Day, Labor Day, and Christmas. Employees are generally entitled to these days off with pay.
5. Employment Rights and Protection
Equal Treatment and Non-Discrimination: Employees in Peru are entitled to equal treatment and non-discrimination based on factors like gender, race, religion, or disability. Discriminatory practices in hiring, compensation, and promotion are prohibited.
Employers must provide accommodations for workers with disabilities.
Health and Safety: Employers are required to provide a safe and healthy work environment. The Occupational Health and Safety Law mandates that employers must comply with specific safety regulations to reduce workplace accidents and ensure employees’ well-being.
Employers must also implement programs related to workplace safety and provide personal protective equipment when necessary.
6. Social Security and Benefits
Social Security Contributions: Employers and employees must contribute to the National Health Insurance (EsSalud) and Pension System (SNP). Employers are responsible for making contributions to the social security system for their employees, which include:
Health Insurance: Employers must contribute to EsSalud for workers’ medical coverage.
Pension Contributions: Employers are required to contribute a percentage of their employees' salaries to a pension fund, either through the National Pension System (SNP) or the Private Pension System (AFP).
Severance Pay: Employees dismissed without just cause are entitled to severance pay. The amount is calculated based on the worker’s tenure, and in the case of an unjustified dismissal, the employee is entitled to:
One month’s salary for every year of service.
7. Termination of Employment
Voluntary Resignation: Employees can resign from their jobs voluntarily, but they must provide at least 30 days’ notice before leaving. If the employee does not give notice, they may be required to compensate the employer for the notice period.
Dismissal: Employers can terminate an employee’s contract with cause, such as for misconduct, incompetence, or redundancy. However, if the dismissal is unjustified or without cause, the employee is entitled to severance pay and compensation.
Dismissal Without Cause: In cases where employees are dismissed without just cause, the employer must pay compensation equivalent to one month’s salary per year worked (up to a maximum of 12 months).
8. Trade Unions and Collective Bargaining
Right to Form Unions: Workers in Peru have the right to form and join trade unions. The Peruvian Constitution guarantees workers the right to organize and engage in collective bargaining.
Collective Bargaining: Workers, through their unions, can negotiate collective bargaining agreements with employers regarding wages, benefits, working conditions, and other employment matters.
Strike Action: Employees have the right to strike, but the right is subject to certain conditions, including the requirement for prior negotiations and the approval of the majority of union members.
9. Child Labor and Employment of Minors
Child Labor Laws: The Labor Code prohibits the employment of children under the age of 14 years. For non-hazardous work, adolescents aged 14 to 18 may be employed, but they are subject to special conditions regarding working hours and conditions.
The law also forbids the employment of minors in hazardous work environments, such as mining or heavy industries.
10. Foreign Workers
Work Permits: Foreign workers in Peru are required to obtain a work permit to be employed legally. They must have an employer who is willing to sponsor them for employment.
Rights of Foreign Workers: Foreign workers in Peru enjoy the same labor rights as Peruvian nationals, including the right to fair wages, non-discrimination, social security, and access to health care.
11. Labor Dispute Resolution
Labor Courts: Labor disputes between employers and employees in Peru are typically handled by Labor Courts, which specialize in labor-related issues, such as unfair dismissal, wage disputes, and workplace injuries.
Mediation and Conciliation: Before going to court, workers and employers are encouraged to go through mediation and conciliation processes with the help of the National Labor Directorate or other relevant bodies.
12. Worker’s Compensation
Occupational Injuries: If an employee is injured at work, they are entitled to compensation under the Occupational Risk Insurance System managed by EsSalud. The compensation includes medical treatment and wage replacement benefits.
Conclusion
Employment law in Peru provides robust protections for workers, including regulations related to employment contracts, wages, working hours, leave entitlements, and health and safety. While employers are generally required to comply with these labor laws, there are also significant protections for workers against unfair treatment, discrimination, and unjust termination. Peru’s legal framework supports collective bargaining and unionization, ensuring that employees have the means to negotiate better terms and conditions.
However, while these laws are in place, challenges such as the informal labor market and enforcement issues remain, particularly in certain sectors.
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