Great talent is everywhere. With heavy investment in tech education and entrepreneurship, Peru is home to a young, dynamic, and highly-skilled talent pool. But sometimes, the problem is legally hiring the talent you need.
An Employer Of Record (EOR) is ideal for companies looking to hire and pay talent around the world without the legal hassle.
This article will walk you through the processes and advantages of hiring employees in Peru through an EOR.
Why Hire Talent in Peru?
Peru offers an increasingly educated workforce with many new graduates in key industries. A remarkable tech talent pool makes Peru an excellent nearshoring destination for software developers and other IT specialists.
Another advantage of hiring employees in Peru for companies based in the US and Canada is real-time collaboration. Peru’s time zones match up nicely with both the East and West coasts, allowing companies to seamlessly integrate Peruvian staff into their meetings and processes.
This is also true for culture and language. Many Peruvians have close ties to the US and Canada, understand the culture, and speak fluent English. Plus, for companies working with the Spanish-speaking market, hiring bilingual employees in Peru can be a huge advantage.
Notably, cost plays a significant role when hiring Peruvian employees. Salaries remain well below the US and Canadian averages. So, it’s an excellent opportunity to save on human resources expenditures while employing some of the top global talent.
How Can I Legally Hire an Employee in Peru?
Things can get tricky if you want to legally hire talent in Peru on your own. You must set up a local legal entity for compliance. However, navigating Peruvian labor laws and regulations can be challenging.
This is where EORs come in handy. An EOR acts as a broker for hiring talent outside of the country you legally operate in. It will already have an entity set up and the legal framework in place to do the hiring for you. You, on the other hand, will manage the relationship with your employees.
Going through an EOR is possibly the easiest way to hire talent in Peru without all the legal hassle.
What Does an EOR Do?
Simply put, EORs take care of the legal procedures while you manage your employees. The legal frameworks for hiring in Peru can be quite different from those in the US and Canada. EORs handle worker visas and work permits, employment contracts, payroll, local compliance, termination, and many other HR and financial services.
For example, did you know that employers in Peru must pay statutory thirteenth and fourteenth-month salaries? Or that employees can opt for extra pay in lieu of 15 days of vacation? EORs will take care of this and so much more.
Contracts and Documentation
An EOR will handle the tedious administration involved in preparing and collecting contracts and documentation. This includes employment offers, signed contracts, banking information, and more so you can focus on growing your business.
Employee Insurance and Benefits
When the world is your competition, it pays to incentivize new and existing hires with attractive benefits like medical, dental, vision and life insurance, and retirement savings plans. A comprehensive EOR will have those benefits built into its service offering.
Vacation and Public Holidays
In Peru, full-time employees are entitled to 30 calendar days of paid time off after one year of employment. They can choose to take 15 days and get extra pay for the other half. There are also several other types of leave to consider, such as maternity and sick leave. An EOR can keep track of all this and the corresponding payments for you.
In addition, Peru has many statutory holidays that companies must provide to their employees.
- January 1: New Year’s Day
- Thursday and Friday before Easter Sunday: Easter (Western)
- May 1: Labor Day
- June 29: Feast of Saints Peter and Paul
- July 28 and 29: Independence and National Days
- August 30: Feast of Saint Rose of Lima
- October 8: Angamos Battle Celebration
- November 1: All Saints’ Day
- December 8: Feast of the Immaculate Conception
- December 25: Christmas
Taxes
Employers in Peru pay a range of taxes and social security contributions, which amount to 9% of an employee’s salary on average. They are required to contribute to public health insurance and will often support employees’ pension funds.
This can be a tedious process but is necessary to ensure you are paying employees in a compliant manner. Thankfully, an EOR can handle the logistics and ensure that payroll is processed correctly and per the regulations in whichever country you are operating.
What Are Your Responsibilities?
While an EOR handles everything related to legal and HR processes, many aspects of the company’s workings fall under your purview. So, you take care of your staff as you would with your local hires.
That means search and recruitment, company onboarding, training, management, day-to-day communications, progress tracking, and so on, should be managed by you.
While the relationship with the employee won’t be all that different through an EOR, you need to be clear with your staff on the legalities of their contracts. Of course, retention is also up to you. You will need to consider how you help your staff grow and succeed in their new roles at your organization.
What Are the Advantages of Hiring Employees Through an EOR in Peru?
Using an EOR to hire talent in Peru will save you time, reduce costs, and mitigate risks.
Navigating the employment laws and regulations in Peru can be time-consuming and complex. Since an EOR is already set up to hire employees in the country, it will be faster and easier to start hiring right away. The process won’t differ very much from hiring locally.
Set-up and HR costs associated with independently hiring abroad can be quite high, so going through an EOR can save you money. You will also be paying lower salaries than in the US and Canada, so you’re bound to see some positive impact on your bottom line.
Most importantly, though, you’ll be mitigating the risks associated with non-compliance. Because EORs have extensive experience in navigating complex employment and tax laws and regulations, you won’t have to worry about any issues arising.
How Do I Choose the Right EOR for Me?
There are a few key things to consider when selecting an EOR in Peru.
- Local Experience: Does the EOR have experience hiring in Peru? One of the biggest advantages of hiring an EOR is the assurance of compliance. Often, this requires a lot of experience, so check the EOR’s track record in the country.
- Service Scale: Do you need someone who offers a full suite of services? If you want happy employees that you can retain in the long run, you may need to offer them benefits like insurance and other welfare. Some EORs have systems in place for this but others may not. Also, certain EORs will offer consulting services to optimize your global hiring practices.
- Data and Systems Security: Protecting intellectual property in a remote working environment is critical. Ensure your vendor has a specific agreement outlining how they plan to keep your sensitive information safe and secure.
- Collaboration: Ensure your vendor’s approach to communication and client collaboration is aligned with your organization’s approach. Prefer having a quick and easy point of contact? Perhaps all you need is access to a Slack channel to quickly reach your vendor. Whatever your communication style, ensure your vendor can meet your needs.
Borderless: The Employer of Record Your Company Needs
Need an EOR? Look no further than Borderless. We can help you hire employees in Peru – giving you access to a highly-skilled talent pool without the headaches of traditional global expansion.
Book a demo today and see how we can help you quickly and easily hire, onboard, pay, and retain the Peru-based talent your organization needs.
Disclaimer
Borderless does not provide legal services or legal advice to anyone. This includes customers, contractors, employees, partners, and the general public. We are not lawyers or paralegals. Please read our full disclaimer here.
