Peru

Overview of Peru

Peru is situated on the West coast of South America. It is most famous for being the home of one of the 7 world wonders: Machu Picchu. Its capital is Lima and the country has a population of 31.99 million. Spanish is the official language however the State also recognizes Quechua, Aymara and other native languages as languages of the state ‘wherever they are prominent’. Peru is home to the highest sand dune is the world- Cerro Blanco sand dune – as well as to the highest lake in the world: Lake Titicaca. The world’s deepest canyon – Cotahuasi Canyon – is also located in Peru. Peru has one of the fastest growing economies in the region. Peru’s exports are led by the seasonal export of highly valued fresh fruits and vegetables mainly grapes, avocados, blueberries and asparagus.

Peruvians have a highly relationship driven culture and this reflects in their business endeavours. Becoming familiar and developing a personal relationship with a business partner is essential. Expect small talk at a meeting as well as social activities outside of the work environment. Peruvians dress formally and conservatively when conducting business. Time and punctuality are seen as highly flexible. You should be on time but do not expect your Peruvian counterparts to be.

Currency of Peru

• Nuevo sol

Health Insurance and the Social Security system of Peru

The Peruvian healthcare system underwent a big change in 2010 with the goal of guaranteeing everyone healthcare regardless of income. The entire Peruvian population got separated into 3 parts – contributory, semi-contributory and subsidized.

All employees and their respective employers will pay a contribution to the government (employers pay 9% of their employee’s salary). Those who cannot afford to contribute will have their healthcare paid for by the state.

EsSalud is the compulsory healthcare which is funded by employees and employers and Seguro Integral de Salud (SIS) is the healthcare which is aimed at protecting lower-income communities.

EsSalud provides coverage in case of dental care, maternity, general and specialized health care, hospitalization fees, laboratory analysis, medication, rehabilitation, prevention and vaccination, etc.

The private health sector in Peru is small, and mainly centered in the capital city of Lima.

Employer cost of Peru

The cost for an employer to hire someone in Peru is a plus of 9.00% to the gross salary.

Salary and bonuses of Peru

Regular employees are paid monthly.

There is a mandatory 13^th and 14^th month salary in Peru. The 13^th month wage has to be paid in July and the 14^th month salary gets paid in December.

Commissions, incentives, and bonuses are variable and will be agreed upon directly with the employer.

Public Holidays in Peru

• January 1^st – New Year’s Day
• moveable – Easter (Holy Thursday, Good Friday and Easter Day)
• May 1^st – Labour Day
• May 21^st – Navy Day
• June 29^th – Feast of Saint Peter and Saint Paul
• July 28^th and 29^th – Independence Day
• August 30^th – Santa Rosa de Lima
• October 8^th – Battle of Angamos
• November 1^st – All Saint’s Day
• December 8^th – Immaculate Conception Day
• December 25^th – Christmas Day

Working Hours in Peru

Office hours are from 9:00am to 6:00pm, Monday to Friday.

A regular work week is 48 hours.

Compensation for overtime should be agreed upon beforehand between an employer and the employee. The first 2 hours of overtime should be compensated with a minimum of 125% of the regularly hourly wage. Any additional hour should be compensated with a minimum of 135% of the regularly hourly wage.

Vacation in Peru

Employees are entitled to 30 days of vacation per year. Before 2018, these days had to be taken in one go. These are calendar days, not working day. Since 2018/2019 an employee can request that this be split in the following way:

• 15 days which are taken at one go

• the other 15 days which can be taken in less than 7 day periods and a minimum of 1 day.

Sick Leave in Peru

When an employee falls sick in Peru, the first 20 days are paid by the employer. After these 20 days, the employer continues paying but is reimbursed by the Social Security Service (EsSalud). Sick leave is paid for a maximum of 11 months and 10 days.

Termination/Severance in Peru

When terminating an employee in Peru, one should have a lawful reason for doing so. Examples are an employee who is in incompetent at his job or unable to perform the duties expected of him. Another cause for dismissal is an employee’s behaviour. Termination by objective cause is also known as “collective dismissal”. In the case of economic, technological or structural motives, a collective termination must involve at least 10% of the total number of employees.

The notice period is 6 days.

A severance payment is only mandatory is the employee is terminated without cause. Here the employee is entitled to a severance pay consisting of 1.5 times their monthly salary for each year of service, up to a maximum of 12 months salaries.