In Peru, there is currently no legal distinction between blue-collar and white-collar workers. Historically, obreros and empleados had separate payrolls and social security until the 1970s, when the systems were unified. Today, all are recognised as trabajadores under a common framework, with some special regimes (eg, construction, domestic work) tailored to certain activities. The main legal distinction now is the category of employees of direction or trust (personal de dirección y de confianza), who exercise representation or management functions. They are excluded from overtime pay and may be dismissed without cause if the relationship of trust breaks down. In short, the former dual structure is no longer in force, and Peruvian labour law treats all workers as part of a unified system, subject only to role-based or sector-specific regimes.

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.

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) must be in writing and grants fewer benefits;
• overtime is voluntary, paying 25% of the daily rate for the first two hours, and 35% of 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.

The minimum wage is set by the executive branch of the government, with no fixed review schedule (it is currently PEN1,025 per month, or approximately USD295).

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 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;
• 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.

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.

• 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 protection.

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.

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 an act, which must be notarised or, if this is not possible, certified by a justice of the peace.

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.

Representativity

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.

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 individual terminations, the notice period is six calendar days in cases of serious misconduct and 30 calendar days when based on lack of capacity. 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 trust personnel may seek either severance compensation (1.5 monthly salaries per year of service, capped at 12 months) or reinstatement in their position. 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 employee misconduct 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. The employer must notify the employee in writing, specify the facts in detail, attach supporting evidence, and allow the employee to present a defence. If the dismissal is upheld, the contract ends immediately without 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.

Grounds for a wrongful dismissal claim include lack of just cause or an unproven cause, failure to observe statutory formalities (written notice, right to be heard, notice periods), and dismissals affecting protected categories or based on discrimination. Consequences: if the dismissal is declared null (eg, due to protected status or discrimination), the employee is entitled to reinstatement with back pay and accrued benefits. In cases without cause or dismissal in bad faith, the employee may choose either severance – equal to 1.5 monthly salaries per year of service, capped at 12 months – or reinstatement. Courts may also award additional damages where appropriate.

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.

Employment disputes are heard before specialised labour courts or chambers, depending on the nature and amount of the claim. Claims below a certain value fall under the jurisdiction of justices of the peace in labour matters, while claims exceeding this threshold are handled by specialised labour courts. This threshold is set at 70 URP (approximately USD10,700). The URP is the Unidad de Referencia Procesa, a Peruvian unit of account used for reference in legal and administrative matters, and is set at 10% of the value of the Unidad Impositiva Tributaria, which is a value that the Ministry of Economy adjusts annually.

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.

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.

See 9.1 Litigation.