Employer of Record in Peru
Hiring employees abroad can be a daunting task. Skuad, an established Employer of Record, can be your ideal partner in this journey. It offers holistic solutions to organizations looking for international hiring and workforce management. Talk to Skuad experts to know more about EOR solutions in Peru.
Peru At A Glance
- Population:32.97 million
- Currency: SoI (PEN)
- Capital City: Lima
- National Language: Spanish
- Languages Spoken: Spanish, Aymara, Quechua
- GDP: $ 385.719 billion
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Employment in Peru
What You Must Know Before Employing in Peru
Business organizations planning to explore the vast opportunities in Peru must have a sound understanding of the labor laws in Peru. To minimize or mitigate the challenges that may arise due to the lack of local knowledge, companies should prefer to partner a local employer of record, who is well aware of the Peru laws for both local as well as foreign workers.
The demand for knowledge workers is constantly increasing all over the world. These knowledge workers demand a higher salary than the rest owing to their expertise and skill. The average salary for some of the knowledge workers in Peru is as follows:
- IT Professionals- USD 2115
- Finance and Accounting- USD 2146
- Marketing-USD 2357
Employment in Peru can be a smooth ride if you know about the Peru Employment laws and policies. Peru employment laws apply both to foreign nationals and citizens. However, differences can be seen in their respective entitlements. Let us understand these differences and other aspects of employment laws in Peru.
Peru Employment Laws
Skuad, as your reliable EOR in Peru, does all the homework and provides an easy sail through. Book a demo to understand our all-in-one platform for remote HR solutions
Contractors Vs. Full-time Employees
You can augment your workforce by either hiring full-time employees or hiring employees on a contractual basis. These contractors are fixed-term employees and work till their contract period gets over. A business organization’s decision to hire contractors and full-time employees depends on the nature of the job. The regular jobs require full-time employees who work for an indefinite period. Legal and financial jobs require employees to work full-time for an indefinite time.
Business organizations recruiting contractors must have an employment contract in writing. The employment contract law in Peru states that fixed-term contracts cannot be for more than five years. The employment contracts in Peru must be registered with the Labor Ministry of Peru. Fixed-term employment agreements in Peru are of three types:
- Temporary contracts for short-term
- Contracts based on Market needs
- Business Reorganization contracts
Contractors have more autonomy and work according to their style. The organization has less control over them. Full-time employees work according to the employer and have less freedom. In Peru, if an organization hires an expat, it must have a written contract for not more than three years. The period of the contract can be further increased later.
An independent contractor is not entitled to receive employee benefits. He is responsible for his taxes and makes his contributions. A contractor may claim to be a regular employee to receive the benefits. To avoid such circumstances, the Peru labor laws state that a contractor must have other clients as well. He should not be restricted to one organization and should be paid a fee for his services.
Skuad, a trusted Employer of Record in Peru, hires the best talent for organizations according to their needs. It helps to recruit full-time employees, part-time employees as well as contractors to meet your diversified requirements. To learn more, get in touch with Skuad and build a competent team in Peru.
Hiring in Peru
Peru offers ample scope for business organizations to expand and broaden their horizons. Organizations need to understand the work culture and business etiquettes of Peru to streamline and simplify their recruitment process. You also need to be aware of the legal complications to avoid any mishaps. If you want to hire employees in Peru, you have two choices:
- Hiring Yourself: You can take this responsibility yourself and hire the employees for your business. For this, you need to understand the employment regulations as well as the hiring policies in Peru. It is a time-consuming process to be aware of the hiring tactics. You can take help from online job-portals like Computrabajao, Bumeran, Indeed, etc. These online portals and hiring companies in Peru make your task easier to an extent. You would still be required to screen the myriad of applications you would receive to find the deserving candidate.
- EOR Solution: The second is a more convenient option that is to take the help of a reputed Employer of Record in Peru that would take the onus of finding the right candidate for your organization. An EOR would not only hire the right talent but also make sure that all the labor guidelines are complied with. They also undertake the task of onboarding the recruits and handling their payroll as well.
According to the constitution of Peru, employers cannot discriminate based on gender, race, religion, etc while hiring and thereafter. Employers are not allowed to ask about the background, family status, economic status, etc from an employee as it might lead to discrimination. You need not worry about hiring employees in Peru as Skuad offers comprehensive EOR solutions at an affordable price. To get all your queries answered, talk to us.
Probation & Termination
The probationary period in Peru can be from three months to one year as stated in the employment contract. However, in most organizations, the standard probationary period in Peru is the first three months of service. During the probation period, an employee is a temporary employee. He can be dismissed by the employer without any sufficient reason.
Termination of Service
There should be enough ground for terminating an employee from service. An employer cannot terminate an employee without any valid reason. An employee can be terminated according to the terms of the employment contract. Also, there should be sufficient reasons for the termination of an employee. Otherwise, it may entail huge risks for employers.
The statutory notice period of 6 days should be given to the employee to respond. The notice should be in writing and should state the cause of dismissal.
Notice Period in case of incapability
An employer should give a notice period of 30 days to the employee to prove his worth and capability.
If it is found that an employee was terminated without sufficient cause, the employer has to provide severance pay to the employee. The severance pay is equal to the salary of the employee for 12 months. Hence, an employee must not be terminated without any valid reason.
Your Employer of Record in Peru will manage all this and more. To learn more get in touch with Skuad.
Peru is fast emerging as a leading destination for your business expansion. It has a business-friendly environment that fosters growth and development. The government of Peru encourages foreign investments and has reformed its economic policies to attract more investors. Expanding business in Peru can prove to be a promising idea.
EOR Solutions simplify your journey to foray into the market of Peru. Skuad is among the most experienced and reliable Employers of Record Companies in Peru. Skuad offers an impeccable employer of record solutions in Peru and shoulders the responsibility of personnel management for you. Book a demo for understanding our broad range of services.
Types of Visas in Peru
Organizations willing to hire employees in Peru should also make arrangements for their work visas. You would require a Peruvian work visa to build your team of employees in Peru. There are two types of work visas for employees willing to work in Peru:
To obtain a Peru work visa, one needs to enter the country first. The employees are required to fulfill the work visa requirements before applying for the same. The following documents need to be submitted to obtain a visa in Peru:
- Employee’s passport
- Photocopies of the passport
- 2 photocopies of the visa application form
- A cover letter duly signed by the employee stating the reason for coming to Peru
- Itinerary and schedule for staying in Peru
- Finance details regarding the trip like IT return
- Employer’s NOC
Once the documents have been submitted, it may take around 5 to 30 days to process the visa application.
An employee can not work unless he has a work permit issued by the government of Peru. As your trusted Employer of Record in Peru, Skuad makes all the necessary arrangements to obtain work permits for the employees of your organization. The following things should be kept in mind while applying for work permits in Peru:
Skuad is a one-stop destination for all the organizations willing to broaden their horizons and expand in Peru. Skuad, a reputed Employer of Record in Peru, helps organizations to hire adept staff without worrying about the legal formalities. It handles the entire process of obtaining the Peru work permits for foreigners. To know more about our global platform, talk to our Skuad expert.
Payroll and Taxes in Peru
Peru offers tremendous scope for different businesses to grow their scale of operations. The country is rich in natural resources and has an environment that is favorable for business organizations to expand and develop. Once an organization has decided to foray into the market of Peru, it becomes imperative for it to set up payroll in Peru. Payroll outsourcing in Peru can be immensely advantageous for organizations.
Organizations can opt for any of the following four methods of setting up a payroll in Peru:
- Remote Payroll: An organization can opt for a remote payroll system. Remote payroll is suitable if an organization wants to have a single payroll system for multiple countries. The drawback of remote payroll is that you need to have a complete understanding of the payroll guidelines of different countries which is not an easy task. Then too, an organization’s Peruvian employees would have to comply with different guidelines than the employees of their home country.
- Local Payroll Company: An organization may hire the services of a local payroll company to establish a Peru payroll for you. In this case, the organization would assume complete responsibility for any breach.
- Internal Payroll: Large organizations can set up their internal payroll office in Peru. This option would be very expensive.
- Employer Of Record: The most convenient and cost-effective way is to hire an imminent Employer of Record in Peru like Skuad to manage your payroll.
Organizations need to comply with the Peru payroll tax rates to ensure they do not violate the law. Skuad acts as your Peru employer and undertakes the responsibility to handle the payroll and tax compliance. Book a demo to seek assistance and enjoy our exemplary Employer of Record Services in Peru.
Two bonuses are given to employees. The first is paid around Peru's Independence Day in late July, while the second is paid around Christmas. Each bonus payment is equal to the employee's monthly wage. Employees are also given an additional 9% of their statutory bonus at the same time. Depending on the industry, the bonus percentage may differ.
Employers with more than 20 employees must pay their employees a proportion of their annual pre-tax profits. Profits from mining, wholesale, retail, and restaurants are shared at a rate of 8%. Manufacturing, fishing, and telecommunications companies each split 10% of their earnings, while the rest of the companies share 5%.
Business in Peru offers high returns in less time. With rising GDP and liberal economy, Peru offers innumerable business opportunities for off-shore investors. Organizations willing to establish a holding company in Peru must have a sound understanding of the Peru Subsidiary laws.
Process of Establishing a subsidiary in Peru
- First of all, you need to decide the type of subsidiary to be set up. In Peru, you can set up the following types of subsidiaries:
- Sociedad Comercial De Responsabilidad Limitada(S.R.L) - It is the most common form of subsidiary. It denotes a limited liability company.
- Sociedad Anónima- It is a standard corporation. It can be further classified as:
- Sociedad Anónima Ordinaria (S.A.)
- Sociedad Anónima Abierta (S.A.A.)
- Sociedad Anónima Cerrada (S.A.C.)
There are different subsidiary laws for each kind of subsidiary.
- Open a Bank Account: The next step is to open a bank account in Peru and deposit the capital. Peru does not ask for minimum share capital.
- Name Registration: Organizations should get the name of the subsidiary registered.
Incorporating a holding company in Peru can be a challenging task. Skuad’s comprehensive package of assistance from establishing a holding company to managing the personnel function facilitates your expansion plans in Peru. Talk to a Skuad expert to gain more knowledge about establishing a subsidiary in Peru.
A Professional Employer Organization is an organization that renders outsourced human resource services. It employs people on your behalf but acts as a co-employer along with you. If you hire a Professional Employer Organization in Peru to expand your workforce, you would be jointly liable for any breach of contract. PEO would handle the hiring, payroll, tax compliance, etc on your behalf.
An Employer of Record on the other hand assumes full responsibility for hiring, onboarding, payroll, legal compliance, tax compliance, etc. EOR becomes the legal employer of the employees hired by them for your organization. Skuad offers holistic EOR solutions in Peru that consist of hiring human resources, managing human resources, handling payroll, tax compliance, and all the HR-related work.
Get in touch with Skuad to learn more about its all-inclusive EOR solutions in Peru.
In an extremely competitive global business environment, it becomes essential for organizations to transcend the boundaries of their country and explore the global markets. Skuad renders phenomenal Employer of Record services and smoothes your road for expansion. Talk to a Skuad expert to understand more about its professional and reliable EOR solutions.