Great talent is everywhere. With heavy investment in tech education and infrastructure, Uruguay 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) in Uruguay 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 Uruguay through an EOR.
Why Hire Talent in Uruguay?
Nestled close to giants like Brazil and Argentina, Uruguay stands out as one of the safest and most technologically advanced countries in the region. Its home internet penetration rate is 88% while all public schools have full connectivity.
Also, Uruguay boasts a robust start-up ecosystem, with hundreds of budding entrepreneurs serving global markets. As a result, a remarkable tech talent pool makes Uruguay an excellent nearshoring destination for software developers and other IT specialists.
Another advantage of hiring employees in Uruguay for companies based in the US and Canada is real-time collaboration. Uruguay’s time zones match up nicely with both the East and West coasts, allowing companies to seamlessly integrate Uruguayan staff into their meetings and processes.
This is also true for culture and language. Many Uruguayans 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 Uruguay can be a huge advantage.
Notably, cost plays a significant role when hiring Uruguayan employees. Salaries remain well below the US and Canadian averages. This provides employers with an excellent opportunity to save on human resources expenditures while recruiting top global talent.
How Can I Legally Hire an Employee in Uruguay?
Things may get tricky if you want to legally hire talent in Uruguay on your own. You must set up a legal entity for compliance with local regulations. Navigating Uruguayan labor laws also poses significant challenges.
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 Uruguay 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 Uruguay 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 Uruguay must pay statutory thirteenth and fourteenth-month salaries? Or that employees can take a day off to donate blood? 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. This way, you’re able to 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 service provider will have those benefits built into its service offering.
Vacation and Public Holidays
In Uruguay, full-time employees are entitled to 15 calendar days of paid time off after one year of employment. There are also several other types of leave to consider, such as maternity leave and paternity leave. An EOR can keep track of all this and the corresponding payments for you.
In addition, Uruguay has certain statutory holidays that companies must provide to their employees.
- January 1: New Year’s Day1
- May 1: Labor Day
- July 18: Constitution Day
- August 25: Independence Day
- December 25: Christmas
Even though there are only five legally mandated holidays, there are several common dates that employees receive as paid leave.
Taxes
Employers in Uruguay pay a range of taxes and social security contributions, which amount to 12.5% of an employee’s salary on average. They are required to contribute to public health insurance and 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 Uruguay?
Using an EOR to hire talent in Uruguay will save you time, reduce costs, and mitigate risks.
Navigating the employment laws and regulations in Uruguay 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 Uruguay.
- Local Experience: Does the EOR have experience hiring in Uruguay? 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 Uruguay – 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 Uruguay-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.
