How to hire in Peru through an EOR

Fixed-term contracts in Peru come with strict limits, even if they look flexible on paper. Use them only when you have a genuine temporary need, or they'll convert to indefinite contracts and lock you into long-term obligations.

Contract types

Indefinite-term contracts are the default in Peru and what most companies use. They're presumed by law unless you can prove otherwise, and they cover full benefits like CTS deposits and gratuities. For ongoing roles, they're usually the simpler choice.

Fixed-term contracts work for temporary needs, but they max out at five years total, including renewals. They have to be written and registered with the Labor Ministry. If you use them for work that's clearly permanent, courts will reclassify them as indefinite.

For most hires, indefinite contracts are the safer default. They're also what foreign companies tend to get wrong when they try to work around the rules.

What has to be in the contract

Peru doesn't require written contracts for every situation, but you do need one for fixed-term, part-time, and anything beyond casual work. Make three copies, state the duration and reason clearly, and file one with the Labor Authority within 15 days. Verbal agreements leave you exposed, since indefinite employment is presumed by default.

At minimum, include job duties, pay, hours, and place of work. Spanish is standard, even if there's no strict language requirement. For indefinite contracts, probation runs up to 3 months, extendable to 6 months or 1 year for managers. You can terminate during probation without severance, but document your reasons.

Contractor vs. employee

The key question is control. Employees follow your schedule, use your tools, and work under your direction. Contractors operate under civil contracts, manage their own taxes, and work independently. If you're dictating how and when someone works, they're likely an employee under Peruvian law.

Getting this wrong is expensive. You could owe back pay for 13th and 14th month pay, CTS, social security, and severance of up to 12 months' salary. There are also fines, potential joint liability if subcontracting is involved, and damages for unjust dismissal.

Non-competes are hard to enforce without compensation and a narrow scope, such as protecting trade secrets during employment and for a short period after. IP assignment is enforceable if it's written into the contract, but employees keep their moral rights regardless. Be specific in the contract to avoid disputes later.

Peruvian employees get 30 calendar days of paid annual leave after one year, including weekends and holidays. That's more than most countries offer, so it's worth understanding the accrual rules before you make any commitments.

Employees qualify after working at least 260 days on a 6-day week, or 210 days on a 5-day week. Leave accrues annually and must be taken the following year, or you pay it out as extra salary. You can agree to advance it or split it: 15 days consecutive (or 7+8), with the rest taken in minimum 1-day blocks. Pay the full regular salary upfront. At least 15 days must actually be taken; you can cash out the other 15 if both sides agree.

Peru has around 14 public holidays per year. They're non-working days and must be paid if they fall on a regular workday.

All leave types

Here's what the law requires for each main leave type. Job protection applies across the board, so you can't let someone go for taking legally protected leave.

Bereavement and marriage leave aren't legally required, but employees will ask for a few paid days and it's standard to offer them. Paternity leave isn't set in law either, so it's worth building a clear policy if you want to stay competitive.

Mandatory benefits

Peru requires social security contributions through ESSALUD for health coverage and ONP or AFP for pensions. Employers carry most of the cost.

There are no mandated meal vouchers or transport allowances, but CTS (compensation for time of service) is required. You'll deposit 8.33% of salary twice a year into a worker fund. Think of it as built-in severance protection.

What people actually expect

Legal minimums won't get you far if you're hiring experienced people in Lima or in tech. Employees expect three salary bonuses per year (July, December, and gratifications) on top of base pay, and most treat this as a given.

Private health insurance is also expected. ESSALUD covers the basics, but wait times are long and quality varies, so mid-level hires and expats will push for private cover. Remote work stipends aren't required by law but are increasingly common, typically $50-100 per month for internet or home setup costs.

Meal allowances at competitive firms usually run $3-5 per day. Some employers bump annual leave to 35 days for senior roles. If you stick to the legal floor, you'll mostly attract junior candidates. Locals compare packages on sites like Bumeran, so if you want to hire seniors, your offer needs to hold up against multinationals. Expect candidates to negotiate on paternity leave (10-15 paid days is typical) and sick leave top-ups.

Firing someone in Peru without a valid reason can cost you up to 12 months' pay in compensation. The system is employee-friendly, and courts tend to side with workers if you don't have documented just cause.

Firing someone

You can only terminate for just cause: serious misconduct, poor performance, substance abuse, dishonesty, gross negligence, or business redundancy. During the three-month probation period, the bar is lower. Grounds include poor performance, bad behavior, role misfit, or persistent absence.

After probation, protections kick in hard. Pregnant employees can't be fired during pregnancy or within 90 days after maternity leave ends.

Unfair dismissal means terminating without just cause or skipping the proper process. You need to send written notice with evidence, and the employee gets six days to respond for misconduct or 30 days for performance issues. Skip that step, and it's considered arbitrary dismissal. Workers can then claim 1.5 months' salary per year served, capped at 12 months.

Protected categories include pregnant workers, union reps, and employees in roles where probation has already passed. Peru's courts treat indefinite contracts seriously, so don't assume a dismissal will go unchallenged.

Notice periods

Notice depends on the reason for termination and who's initiating it. Employers give between 6 and 30 days for dismissal with cause. If termination is fully justified, no notice may be required. Employees always give 30 days when resigning.

Severance

Severance is required for unfair dismissal or when a fixed-term contract ends early. The formula is 1.5 months' salary per full year served, pro-rated for partial years, capped at 12 months. There's also Compensación por Tiempo de Servicio (CTS): one month's average salary per year, paid out regardless of how the employment ends.

No severance applies if the dismissal is justified or if the employee resigns.

Calculate severance based on the employee's last average monthly salary, including bonuses. For redundancy, you'll need to negotiate first, and unions must be involved where applicable. Company closure requires just five days' notice and no Ministry approval.

Work permits and visas

You can hire foreign nationals in Peru through an EOR. Because the EOR acts as the legal employer, they handle the sponsorship side. Foreign workers need a residence permit tied to an approved employment contract.

To apply, you'll submit to the Ministry of Labor: the employment contract, passport, a health certificate (no older than 3 to 6 months), and a police record translated into Spanish. The permit lasts one year and is renewable for the same term.

The main category is the work residence visa (carné de permiso temporal de residencia para trabajo). There's no digital nomad visa in Peru yet. Processing typically takes 1 to 3 months. The job offer needs to show that no local candidate could fill the role, and the salary must meet at least the minimum wage (PEN 1,130/month from 2025). The EOR submits everything digitally through the MTPE portal.

Compliance risks and other key points

Keep contracts written and in Spanish. Pay monthly, at minimum wage, and stay within the 48-hour weekly and 8-hour daily limits. Employees are entitled to 30 days of annual leave after one year, based on 260 days worked for a six-day week.

Peru's Personal Data Protection Law requires employee consent before processing personal data, and you'll need to notify the relevant authority of any breaches. Unions are active in Peru, and collective agreements are common in larger companies. If you're planning mass layoffs, you're required to negotiate with unions.

A few things to watch in 2025: the minimum wage increased to PEN 1,130, and a proposed amendment to the health law would expand relocation duties for workers with serious illness. No major changes to termination rules have passed yet, but Congress has been moving toward greater job stability protections. An EOR can help you stay on top of filings, notices, and disputes before they turn into legal problems.