During the past year, there have been more than 18 normative changes to the labour legislation in Peru. Some of these changes are highly beneficial to employees and employers with the goals of increasing quality of life and better management of a work-life balance. Employees are now more protected when it comes to issues of labour and employment.

Although there have been very important legislative developments that affect Peruvian employment law, most recently the President of the Republic has cancelled the bill of labour that was put before Congress. This bill would have changed the rules surrounding temporary contracts and lowered the labour costs. High labour costs raise the informality index, which are the highest in the region. Workers with temporary contracts are not protected in the same ways that traditionally hired employees are. This also affects the workforce because the temporary workers are not gaining experience which can lead to greater productivity.

While this bill is not being passed now, there are many other new laws that will affect your business and employees including, maternity and paternity leave changes, paid vacation time usage rules and compensation for dismissal.

New laws about maternity and paternity leave 

Under Law No. 30792, mothers who have taken maternity leave are still entitled to their distribution of profit sharing. Since 50% of the profits of the company are distributed to workers based on the days they have worked, mothers who took prenatal and postnatal leave will still have these days counted in their amount of days worked.

Paid paternity leave has been extended by Law No. 30807 from four days to 10 consecutive calendar days for a natural childbirth or caesarean. There are also special cases that increase the time off such as 20 days for premature or multiple births. Fathers can also get 30 days paid leave for a birth with terminal congenital disease or severe disability or if there are serious complications with the mother’s health.

Vacation leave changes 

Paid vacation leave law changes are included in Legislative Decree No. 713 and are for employees in the private sector. Leave can now be borrowed from the next vacation period and taken in advance, if there is a written agreement between the employee and employer.

Employees can also divide their vacation period by splitting 15 days of their vacation days into seven or eight consecutive days and the other 15 days can be split into even less time ranging from seven days to one day. This allows for employees to enjoy their paid vacation time in a way that will help to promote their work and family life balance.

Dismissal laws 

There have been two changes in the labour law that affect the dismissal of employees. The first covers cases of dismissal and fraudulent prosecution which was decided in November 2018. The law states that the possibility of moral damage must be considered because being dismissed without justification can affect the emotional and mental state of the former employee.

The other law refers to compensation for arbitrary dismissal of management workers. If a worker was hired into a managerial role, they do not receive the compensation for arbitrary dismissal if the trust is removed. If a worker has been promoted into that managerial position and previously worked in a lower position in the same company, they are entitled to the compensation if they are not allowed or do not want to return to their old job.

 We can help your business

TMF Peru has the experts that understand the labour regulatory changes in the country. Our payroll and HR teams partner with both local and global businesses to provide exceptional services that include all the processes needed to incorporate the employment law changes. Our extensive experience and knowledge allows you to focus on your business while we take care of all your payroll needs. Talk to us.