What is a Professional Employer Organization (PEO)?
A professional employer organization (PEO) is an organization that leases employees to a company and shares some responsibilities and liabilities with that company. Companies looking to hire remote employees in another country can partner with a PEO, who will take care of several HR aspects such as hiring, onboarding, and paying employees.
If you’re doing business in Venezuela and plan on hiring employees, a professional employer organization in Venezuela may be the right HR solution for you. This type of partnership can help a company by handling various functions such as:
- Compensation and payroll
- Compliance with labor laws
- Recruiting and hiring
- Employment law regulations
- Benefits administration
A PEO is an outsourced HR department that allows small businesses and startups to deliver services that would otherwise be unavailable. Additionally, a PEO may assist you in creating a more streamlined and efficient company.
For many businesses, hiring a PEO is a sensible and strategic move that not only improves overall operations but also allows management to focus on more revenue-generating duties.
All of this can help you expand globally without having to set up a physical headquarters in Venezuela.
What are the benefits of using a PEO in Venezuela?
Partnering with a PEO, such as a global compliance expert like Skuad, not only eases your mind and eliminates worry, it also lets your company grow and hire the best worldwide personnel available. There are many benefits of using a PEO, including:
- Compliance with employment laws is ensured.
- Payroll is processed.
- Taxes are withheld and remitted.
- Your risk and costs are mitigated.
- Competitive compensation and benefits are offered.
With a PEO, your company receives access to a variety of benefits that are typically reserved for larger businesses. You can have a good human resources partner without having to hire an entire department.
A dependable compliance partner
A professional employer organization (PEO) oversees compliance and regulations, saving your company money and reducing risk while enhancing efficiency and process improvement.
A PEO aspires to be a strategic partner in helping a company scale and grow.
Local legal support
In any country, there are several laws and regulations governing the recruiting and management of personnel. A PEO has access to lawyers and is familiar with these rules and regulations. You get the benefits of global expansion without the associated costs, saving you time and money by not having to hire local legal experts.
No concern about time zones
No matter where your main office is physically located, you can rest easy knowing that your remote employees have someone available to talk to when urgency arises.
- Remote workers in Venezuela can contact a Skuad representative instead of calling your office.
- Expenses can be submitted straight to Skuad without inconveniencing you.
- Real-time contract management can be taken care of by Skuad.
To see exactly what we at Skuad can achieve, schedule a demo.
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What are the differences between an EOR and a PEO?
Compared with an employer of record in Venezuela, a PEO:
- Serves as co-employer with the client organization, whereas the client would be the legal employer with an EOR.
- Shares HR responsibilities, whereas an EOR handles most HR tasks such as hiring and onboarding.
- Does not draft employee contracts; the client company drafts legal contracts.
Hiring in Venezuela With a PEO
Understanding the local culture is important when hiring in other countries. Certain holidays will be observed, some of which will be required of the employer by law.
Some quick facts about Venezuela:
- The official language is Spanish.
- After Spanish, Portuguese, Chinese, and Italian are spoken.
- The official currency is the Venezuelan bolívar (VES).
- 95% of Venezuelans are Christian and will likely observe Christian holidays.
Before hiring in Venezuela, consider the following:
- Venezuela tax rate
- Venezuela corporate tax rate
- Venezuela income Tax
- Labor laws
- Venezuela company registration
Payroll in Venezuela is challenging. It’s easy when you use a PEO.
Employment contracts in Venezuela
Per Venezuelan law, contracts are not legally required but are advisable. Written and signed detailed contracts protect all parties involved and can be used to resolve disputes. The law tends to side with employees about alleged verbal arrangements, so getting them to sign an employment contract prevents hearsay.
In Venezuela, the contract must be made available in Spanish, and should include:
- The individual’s name, address, nationality, and marital status.
- The detailed scope of work expected, where it will take place, and when the work will commence.
- Agreed-upon compensation and daily working hours.
- Any details about collective bargaining arrangements.
- The duration of the contract.
- Company policies, including vacation, leave, probation, and termination policies.
- All currency should be written in Venezuelan bolívars.
The corporate tax rate in Venezuela
As of 2021, the corporate tax rate is 34%. Income tax for employees is a progressive tax rate ranging from 6% to 34%.
Venezuela's employment legislation
In Venezuela, the usual workweek is five days and usually no more than 40 hours. Employees are entitled to two continuous rest days per week.
- Daytime shifts are between 5:00 AM and 5:00 PM.
- Day shifts cannot exceed eight hours per day or 40 hours per week.
- Nighttime shifts are between 7:00 PM and 5:00 AM.
- Night shifts cannot exceed seven hours per day and 35 hours per week.
- Mixed day and night shifts of more than four hours are considered night shifts.
- Mixed shift workers cannot work more than seven and a half hours per day and 37.5 hours per week.
- A daily break of one hour is mandated.
Hours per day cannot exceed 10 hours including overtime. Employers must keep a register of overtime hours.
The minimum wage in Venezuela changes often and as of 2021 is 130 VES per month.
The employer contribution to social insurance is between 9% and 11% depending on risk factors. Employee contribution is 4% of monthly earnings.
Paid time off in Venezuela
If an employee has worked for at least a year at a company, they are entitled to 15 days of paid time off per year, plus one additional day for each year of service up to a maximum of 30 paid days off per year.
After one year of employment, employees are to receive a bonus of 15 days’ salary per year, also with an additional day added per year of service to a maximum of 30 days’ salary bonus per year. This is in addition to the 14 public holidays for which workers must be given time off.
Employees can take a total amount of 52 weeks off for labor-related sickness or incapacity leave. For the first three days of sick leave, employers must pay the full salary. After that, 33% of the salary must be paid. The remaining 66% is paid by the Venezuelan Social Security Institute.
Maternity leave is six weeks before birth and 20 weeks after birth, with 33% of the mother’s salary paid by the employer and the remaining paid by the Social Security Institute. Adoption leave is 26 weeks for children under three years of age.
Fathers are entitled to 14 days of paternity leave, paid in full by the Social Security Institute.
Termination in Venezuela
Dismissals without cause are restricted and are subject to government approval.
Contact Skuad today to find out how we can assist your company in hiring Venezuelan workers.
Costs of assembling a team in Venezuela
How much it costs is largely determined by how you choose to expand your business in Venezuela. Your costs will be substantially lower if you choose a PEO or EOR, employer of record, in Venezuela rather than forming a company in Venezuela. Find out more about each one below.
What a PEO in Venezuela can and cannot do
A PEO can:
- Ensure payroll is processed properly and all taxes withheld and remitted.
- Help with hiring and onboarding.
- Assist in reducing cost and employment.
- Help reduce compliance risks.
A PEO cannot:
- Serve as the sole legal employer.
- Take full control of your company.
- Be solely responsible for hiring and terminating employees.
Businesses big and small can find value in partnering with a PEO in Venezuela.
The laws and regulations on hiring employees are complex, and forming a company entity in a foreign country could be costly. The solution is to partner with Skuad to save you time and money by starting PEO services in Venezuela. Learn more about Skuad’s pricing structure and what each package includes on our pricing page.
Skuad offers a number of options for expanding your business in Venezuela without having to create a new entity or spend thousands of dollars. We ensure compliance with local regulations in over 160 countries while protecting your data privacy with our secure platform. This collaboration could be exactly what your company needs to scale and grow.
If you’re ready to team up with Skuad to start PEO in Venezuela, ask for a demo. Do you want to learn more? Schedule a demo to see our platform in action and speak with a representative about how Skuad may assist your company in expanding with PEO in Venezuela.