Employment 2026 Comparisons

In Peru, all individuals are recognised as trabajadores (workers) under a common legal framework, with certain special regimes (eg, for construction or domestic work) tailored to specific activities. The main legal distinction in force is the category of employees holding managerial positions or in positions of trust (personal de dirección y de confianza), who perform representation or management functions. These employees are excluded from overtime pay and may be terminated when the relationship of trust is broken, which constitutes a justified cause under Peruvian labour law.

In Peru, there is no legal distinction between manual workers and administrative or professional employees. Although different categories of workers may be identified within a company’s internal organisational structure, the rights and obligations of manual workers and administrative/professional employees are the same.

However, there are differences based on the nature and characteristics of the position, particularly in relation to the level of responsibility and representativeness of the role. This distinction is established through a special classification of the position as either managerial (“de dirección”) or trust-based (“de confianza”). In such cases, employees may be dismissed due to withdrawal of trust, and they are not entitled to reinstatement in the same position.

In addition, there is also a distinction between employees subject to supervision and those not subject to direct supervision. The latter category applies to employees whose duties, by their nature, cannot be directly supervised; consequently, they are excluded from the maximum working hours regime and from the payment of overtime.

The general rule is that employment contracts are indefinite and do not require written form; a verbal agreement and the effective provision of services are sufficient. Fixed-term contracts, described as “subject to modality”, must be executed in writing and expressly state the objective reason justifying their temporary nature (eg, increase in activities, specific service, or substitution). If these formal requirements or a valid justification are missing, the contract may be deemed indefinite.

Stating the cause of the temporary contract is not a minor formality but a substantive requirement. Both the labour authorities and the courts carefully evaluate the explanation given in the contract and verify whether it matches the reality of the employment relationship. If there is no objective reason, or if the temporary need becomes permanent in practice, the contract will be reclassified as indefinite. This reclassification has serious implications: termination at the end of the fixed term would no longer be valid and would instead be considered an unjustified dismissal, exposing the employer to reinstatement claims or, alternatively, severance and additional damages.

For this reason, employers are strongly advised to:

• document clearly and in detail the objective reason for a fixed-term arrangement;
• ensure that the factual circumstances (eg, temporary project, substitution of an employee, seasonal activity) align with the contractual justification;
• review the situation periodically to confirm that the temporary condition continues to exist; and
• avoid using successive fixed-term contracts without a genuine underlying cause, as this practice is often treated by the courts as an attempt to evade indefinite employment.

Finally, it should be noted that if the reason that justified the use of a temporary contract comes to an end, the contract must also be terminated. The continuation of a fixed-term contract, once the reason that justified its use has ceased, may lead to its misclassification, resulting in it being considered an indefinite-term contract.

The official working hours are as follows:

• standard workday – maximum eight hours per day, 48 hours per week;
• flexible/cumulative schedules are allowed if within the three-week limit and justified by business needs;
• part-time (under four hours daily on average) work must be agreed in writing and grants fewer benefits;
• overtime is voluntary, paying 25% more than the daily rate for the first two hours, and 35% more than the daily rate for every two hours thereafter; and
• part-time workers should not be asked to do overtime regularly; otherwise, they may be reclassified as full-time workers with full benefits.

Employees who are not subject to direct supervision are excluded from the maximum working hours regime and are not entitled to overtime pay.

The minimum wage is set by the executive branch of the government, with no fixed review schedule (it is currently PEN1,130 per month, or approximately USD331).

Under the general labour regime, employees are entitled to the following benefits. Other regimes apply to micro and small enterprises, as well as to certain industries, with different rules; however, in general terms, the key economic benefits are:

• employees receive two mandatory bonuses per year (July and December), each equal to one month’s salary;
• an extraordinary bonus equal to 9% of each statutory bonus (July and December), in lieu of employer health contributions;
• a family allowance of 10% of the minimum wage for employees with dependent children (minors or pursuing higher education);
• CTS (compensation for length of service) – a semi-annual payment in May and November, equivalent to roughly one month’s salary per year of service, held in a bank account as severance savings; and
• additional bonuses or incentives, which may be freely agreed and are not regulated.

Government intervention is limited to setting the minimum wage and regulating increases in the public sector.

Leave Benefits

Annual leave is 30 calendar days of paid vacation per year of service.

Other paid leave entitlements include:

• maternity pay for 98 days;
• paternity pay for ten days;
• breastfeeding breaks at work until the child reaches one year of age;
• sick leave or accident pay for up to 20 days (covered by employer) and from day 21, subsidised by social security; and
• other statutory leave of one to seven days for bereavement, union representation, and other specific family or civic duties.

Confidentiality

Confidentiality may be contractually agreed; employees must act in good faith and avoid employer disparagement.

Employee Liability

Employee liability for damages applies only in cases of wilful misconduct or gross negligence. In both cases, non-compliance on the part of the worker could be considered a serious labour offence and grounds for termination.

Non-compete clauses are not specifically regulated by law but can be enforced if they are entered into voluntarily, limited in scope, duration and geography, and supported by separate financial compensation. The courts apply a proportionality test and will only uphold restrictions that are reasonable and fair.

Non-solicitation clauses, whether relating to employees or customers, are not specifically regulated by law. They are generally enforceable as civil or commercial agreements provided they respect employees’ right to work, fair competition principles, and do not infringe fundamental rights.

The processing of employee data is regulated by the Personal Data Protection Law (Law No 29733) and its regulations. Employers must obtain employee consent to process personal information, unless the processing is necessary for the performance of the employment relationship or to comply with legal obligations. Core principles include purpose limitation, proportionality, informed consent, and security.

Employers are required to:

• register their employee databases with the National Authority for the Protection of Personal Data (Autoridad Nacional de Protección de Datos Personales);
• adopt and maintain privacy policies, including clear notices to employees regarding the collection and use of their data;
• implement appropriate technical and organisational safeguards to ensure confidentiality and prevent unauthorised access, alteration or loss of data; and
• guarantee employees’ ARCO (access, rectification, cancellation and opposition) rights and establish procedures to respond to such requests in a timely manner.

The National Authority also issues binding and interpretative criteria that guide how employers must comply with these obligations in practice, providing oversight and ensuring alignment with evolving standards of data

The limit on private employers hiring foreign employees is up to 20% of their workforce, allocating up to 30% of total payroll to them. Exceptions apply for technical or managerial staff, spouses of nationals, permanent residents, and other specific cases.

As a general rule, foreign employment contracts must be in writing, and registered with the Ministry of Labour within 15 days. Employees must also hold valid immigration status, such as a work visa or residence permit.

Exceptions and special regimes apply as follows.

• MERCOSUR nationals (members of the Southern Common Market and associated states) benefit from simplified procedures, allowing them to obtain temporary residence (usually for two years) with the right to work, later convertible to permanent residence.
• Venezuelan nationals with a temporary stay permit (Permiso Temporal de Permanencia or PTP) or extraordinary provisional work permit (Permiso de Trabajo Extraordinario Provisional or PTEP) may work legally under flexible rules. Their employment contracts must not exceed the validity of the permit, and loss of the permit automatically terminates the contract.
• Andean Community (Comunidad Andina or CAN) nationals are entitled to simplified migration and labour procedures under regional agreements, which facilitate legal residence and work, without the need for a full immigration process.

These special categories reduce or replace visa requirements, but contracts must still be registered with the labour authority and employers remain subject to general limits on the percentage of foreign workers, unless specific exemptions apply.

Remote work is expressly regulated. Prior to the COVID-19 pandemic, it was governed by Law No 30036 (the “Telework Law”). During the pandemic, temporary regulations allowed for remote work under more flexible conditions. After the pandemic, a new framework was introduced through Law No 31572 (the “Telework Law, 2022”) and its regulations, which established stricter and more permanent requirements for employers.

Under the current law, telework requires a written agreement that expressly sets out:

• the conditions under which telework will be performed;
• the equipment and tools to be provided by the employer, or the compensation for the use of the employee’s own equipment;
• the reimbursement of expenses for electricity, internet or other services necessary to perform the work;
• occupational health and safety measures, including ergonomic conditions, and employer obligations to provide training and guidance;
• data protection requirements, including confidentiality obligations and secure systems for processing information; and
• equal treatment of teleworkers in terms of salary, benefits, working hours and social security coverage.

The law is demanding on employers, requiring not only formal registration of telework agreements but also maintenance of internal policies on privacy, and health and safety. It also recognises the right to digital disconnection outside of working hours.

Telework generally requires the consent of both parties; however, it may, and only in cases of unforeseen circumstances or force majeure, be imposed unilaterally by the employer. On the other hand, although the employee may request the application of telework, the employer is not obliged to accept; nevertheless, any rejection of such request must be duly justified.

Under the general labour regime, sabbatical leave is not regulated by law. It may be freely agreed between the parties, either maintaining or suspending the employment relationship depending on the terms of the agreement.

There is still significant room to develop more flexible work models, particularly by:

• shifting from strict hourly control to outcome-based arrangements;
• expanding regional integration to facilitate hiring foreign workers beyond the current CAN framework;
• clarifying rules for remote work performed from abroad (especially regarding tax, social security and immigration); and
• promoting broader cross-border co-ordination of social security to facilitate mobility and attract international talent.

In Peru, to legally form and maintain a company-level union (sindicato de empresa), at least 20 workers must be affiliated; for industry, trade, or craft level unions, the minimum is 50 workers. If a workplace has fewer than 20 employees, they may appoint two delegates to represent them before the employer and the labour authority. Union affiliation and collective bargaining rights are constitutionally guaranteed and reinforced by international conventions. Any actions that interfere with these rights are null and void and may also lead to administrative fines.

Role

Representative bodies – including trade unions, federations and confederations – safeguard collective labour rights, negotiate on behalf of workers, and represent them in disputes.

Formation

Workers must convene an assembly, approve statutes, elect a board, and record the proceedings in minutes, which must then be notarised or, if this is not possible, certified by a justice of the peace.

The board of directors elected at the general assembly determines the number of union leaders who will represent the union before administrative and judicial authorities.

Registration

Unions must be registered with the Ministry of Labour to obtain legal standing (personería gremial). Federations and confederations must also provide supporting documentation, such as affiliate lists, statutes and proof of their constituent acts.

Although, under the law, registration is cancelled upon request of the organisation or by judicial order, at the administrative level, it is lost when the number of affiliated members falls below 20.

Representation

Both minority and majority unions are recognised. Majority unions, by representing most workers within their scope, may extend collective agreements to all employees in that group, while minority unions are limited to negotiating on behalf of their own members.

Trade Union Immunity (or Union Protection)

Trade union immunity is the special protection against unjustified transfer or dismissal granted to members of a trade union organisation. It extends for six months to all affiliated workers who have recently formed a union; thereafter, it applies to the appointed union leaders during the exercise of their functions.

Collective bargaining agreements are binding on both employers and employees within their scope. They regulate working conditions, wages and other employment terms. Their duration and extension depend on what the parties agree upon, subject to the rules of collective labour relations law.

Dismissal is only permitted for just cause established by law, either due to lack of capacity or employee misconduct. In all cases, prior notice must be given and the employee’s right to a defence – including the opportunity to demonstrate their fitness for the role – must be respected.

Collective dismissals are allowed for economic, technological, structural or similar reasons, but require a formal procedure before the Ministry of Labour, whose approval must be obtained through an administrative process.

For collective dismissal on economic, technological or structural grounds, the application must cover at least 10% of the workforce, and it must be sufficiently demonstrated, with technical support, that the company falls within the invoked grounds for termination of contracts. The stages of this procedure include negotiation with the union and/or workers’ representatives. The law also allows the employer to temporarily suspend operations during the process.

For individual dismissals, the notice period is six days from the delivery of the letter charging the employee with a serious labour offence; once the employee has submitted their defence, the employer must notify the decision within a reasonable period. In the case of dismissals due to poor performance, the period granted for the employee to improve performance is 30 days.

Termination must always be given in writing and the employee’s right to a defence must be observed. In cases of unjustified dismissal, Peruvian courts have established that employees who are not classified as management or trusted personnel may seek either severance compensation (1.5 monthly salaries per year of service, capped at 12 months) or reinstatement. Reinstatement may only take place if the employee previously held a position that was not classified as one of management or trust.

While external legal advice is not mandatory, it is highly advisable to ensure compliance and minimise litigation risks.

Summary dismissal (dismissal for serious cause) applies when the employee’s conduct makes it impossible to continue the employment relationship. The law provides an exhaustive list of serious grounds, such as abandonment of work, acts of violence, repeated breaches of duties, and other comparable misconduct of particular seriousness. The employer must notify the employee in writing, specify the facts in detail and the legal grounds, attach supporting evidence, and allow the employee to submit a defence within a period of no less than six calendar days. If the dismissal is upheld, the contract is terminated immediately without entitlement to severance or similar compensation.

Termination agreements are valid and widely used, especially given the risk that an employee who is not classified as management or trust personnel may challenge an arbitrary dismissal and seek reinstatement instead of severance. Mutual termination agreements are therefore highly advisable. They should always be in writing, clearly state the parties’ consent, and may include additional incentives to encourage acceptance and reduce the risk of future claims. While there are no statutory requirements for releases beyond ensuring voluntary consent and absence of coercion, well-drafted agreements provide stronger protection for the employer.

Special protection against dismissal applies to:

• pregnant employees;
• employees during the breastfeeding period;
• union representatives;
• members of health and safety committees;
• employees with disabilities; and
• employees diagnosed with HIV/AIDS, cancer, or tuberculosis.

Termination requires a well-substantiated cause that is not related to the employee’s protected status.

If it is determined that the dismissal was based on the aforementioned conditions, the employee may obtain reinstatement to their position and payment of accrued wages.

Unlawful dismissal comprises four categories.

• Strict wrongful dismissal – This refers to those cases in which it is not possible to judicially prove the existence of the reason that led to the termination. It includes the failure to observe formalities (written notice, right to a defence, notice period, etc).
• Dismissal without cause – This refers to dismissals that occur without any cause being stated; that is, the employee is terminated without any procedure being followed.
• Fraudulent dismissal – This occurs where an employee is accused of misconduct not provided for by law, the alleged facts are false, the evidence is fabricated, or there is intent to deceive on the part of the employer.
• Null dismissal – This is a dismissal is based on an act of discrimination.

Each type of dismissal has its own form of remedy. In the case of wrongful dismissal, the compensation established by law is equivalent to 1.5 monthly salaries per year of service, capped at 12 salaries. In cases of dismissal without cause, fraudulent dismissal, and null dismissal, the employee may obtain reinstatement, unless, during enforcement of the judgment, they choose to replace it with the payment of compensation. These types of dismissal may also give rise to additional damages, such as loss of profits, actual damages, and moral damages.

Discrimination is prohibited on grounds such as origin, gender, religion, disability, age, sexual orientation, or other comparable factors. The employee must present prima facie evidence of discrimination, after which the burden shifts to the employer to prove objective and legitimate reasons. Remedies include nullity of dismissal, reinstatement with back pay or severance.

The labour courts have adopted virtual hearings as a standard practice nationwide, largely as a post-pandemic development. Employment disputes can be conducted through digital platforms, including preliminary hearings, evidence review and oral arguments.

Labour case files are, for the most part, digitised through the Electronic Judicial File (Expediente Judicial Electrónico – EJE), which allows most proceedings to be carried out virtually. Notifications, with the exception of the claim, are made electronically, as it is mandatory to designate a virtual mailbox in order to participate in the proceedings.

Employment disputes are heard before specialised labour courts or chambers, depending on the nature and amount of the claim. Claims below 70 unidades de referencia procesal or URP (approximately USD11,500 fall under the jurisdiction of justices of the peace in labour matters, while claims exceeding this threshold are handled by specialised labour courts. Class actions are not available, but collective claims may be filed through unions and multi-party individual claims may be brought jointly by several employees.

Additionally, labour procedural law establishes a list of proceedings which, due to their complex nature, must be filed before the labour courts, regardless of whether the claim has an economic quantification.

Labour arbitration is primarily admitted for collective disputes, especially conflicts of interest arising in collective bargaining when no agreement is reached during direct negotiations. It may also be used for patrimonial matters expressly agreed by the parties. In individual employment contracts, arbitration clauses may be included but these do not prevent employees from filing claims before the labour courts; in practice, such clauses are not enforceable against employees, even as a procedural defence.

In labour proceedings, the prevailing party may claim from the losing party the payment of court fees and legal costs, in accordance with the Civil Procedural Code, which applies on a supplementary basis. Court fees (costas) include filing fees and procedural expenses, while legal costs (costos) cover attorneys’ and experts’ fees. The judge determines these amounts based on the outcome of the case.

When the employee is the losing party, because their claim is declared unfounded, they are most often exempted from the payment of costs and court fees, unless they have acted with recklessness or bad faith.