Know and Learn the Many Upsides of Having Professional Employer Organization in Peru
The growing economy of the country is widely contributed by the Foreign Direct Investment (FDI) and the factor that is increasing it is the stable environment and professional employer organization in Peru, together with the liberalization of trade, and the educated workers.
Peruvian government is continuously reforming so that they can promote the foreign investment and become competitive in nature. The economy of this country is developing quiet fast thus the foreign investors are taking more interest to set up business in Peru.
The facts and figures about Peru are:
- The free trade agreement of Peru with EU, China, Mercosur
- World Bank has ranked Peru as 50th for making business
- Peru is ranked as the 43rd economically freest globally
- The Peruvian economy is expected to expand by 3.8% by Focus Economics
- More than 7 million Peruvians have escaped the poverty line within half a decade
Every business requires manpower to run their operations and while hiring the employees, the investors must know how to fully engage the hired employees in the right way. Engaging with professional employer organization in Peru is an easy yet better option than choosing a legal entity structure and establishing the company here.
Hiring Employees in Peru
The staff of the company must be hired in accordance with the Peruvian law as the employment law of Peru have the following key aspects:
- Contracts: The employees or staff in Peru can be hired based on fixed term of employment or for an indefinite period of time. The fixed term of employment must be documented and it cannot exceed more than five years. All the employers hiring the staff must register themselves with the Ministry of Labour.
- Foreign Staff: The total number of foreign staff should not exceed more than 20% of the workforce within an organization.
- Termination Agreement: Termination of the employees are subjected to completed legal procedures.
Employee benefits in Peru
There are many employee benefits in Peru apart from the employment law of Peruvian government:
- Bonus: Every employee in Peru shall receive two bonuses, one in the month of July and the second one in December which must be equivalent to the individual’s salary.
- Working hours: The working hours of the employees are fixed, i.e. 8 hours per day. The maximum number of working hours in a week shouldn’t exceed 48 hours per week
- Leaves: Every employee of the organization is entitled to receive 15 paid leaves per year.
- Sick leaves: Every employee working in Peru receives 5 paid sick leaves per year
- Maternity or Paternity Leave: The women are entitled to receive 14 weeks of leave, which includes 7 weeks before the birth of the child and the rest 7 week post-delivery.
- Probation Period: This period last for 3 months.
The employment laws of Peru are constantly changing; thus, Professional Employer Organization can be a great solution as they are well equipped with the engagement process of the employees and are aware of the employment laws and regulations.
Professional Employer Organization
Professional Employer Organization is a company that hires the employees on the behalf of the organization who don’t have a branch office or a set up in Peru. The PEO is legally responsible for all the operations and activities that are concerned with the human resources which includes:
- Payment of Employment taxes
- Employee benefits
- Regulatory compliances
The PEO’s are co-employed by the foreign companies who are equally responsible for the human resource function, taking care of HR and administrative task. They also take care of the payments, salaries which saves time of the client (i.e. foreign investment)
Why should you use PEO services?
Professional Employer Organization have many benefits which are described as below:
- PEO’s can improve the overall efficiency of the business by taking care of administrative and HR functions
- Since, the employment laws are always changing, PEO can be of great help in avoiding risk and legal issues while hiring employees
- The legal responsibility of the employees is also taken up by PEO
Using PEO services, you can save a lot of money which would require to set up a company in the new country.