Peru is a South American economy located on the western part of the continent. Most know it for incredible historical sites like Machu Picchu, but it’s also an economy with several major industries beyond tourism, including textiles, mining, and petrochemicals.

With a young workforce consisting of skilled and educated personnel, entering the Peruvian market is an opportunity for foreign businesses to make their mark in a rapidly expanding economy. Hiring talent is always a risk, and this is where probationary periods come in. Here’s what companies need to know about how these trial periods work.

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Definition of a Probation Period in Peru

Probation in Peru is a trial period where employers and employees can test out a new employment relationship without the obligations that come with forming a permanent relationship. In Peru, this is known as a “periodo de prueba,” and the legal framework is managed by the Ministerio de Trabajo y Promoción del Empleo.

 Technically speaking, the law that defines probation in Peru is the Peruvian Labor Productivity and Competitiveness Law, Article 10. The basic duration of probationary periods is three months in Peru. If the role is one classified as a position of trust, it may be extended to six months. Managerial and highly specialized roles may see probationary periods of up to 12 months.

All extensions must be clearly documented and justified within the worker’s employment contract. If a probationary period is completed, the worker is automatically considered permanent under the law. Likewise, probation isn’t legally enforceable if it isn’t written into an employment contract.

Lengths of Probationary Periods in Peru

The standard period of probation for general roles in Peru is three months from the first day of employment. Note that this is the standard maximum, but the three months may be extended if the hire is for a position of trust, managerial, or highly specialized role.

Higher-level roles can be extended up to a total duration of six months for positions of trust or up to 12 months for highly specialized and managerial roles. All probation durations must be justified in writing, though, to prevent abuse of the system.

Employers must ensure that probationary periods are clearly outlined in the employee’s employment contract. Verbally agreed-upon probation phases are not enforceable under Peruvian law.

Permanent or Indefinite Contracts

Probationary periods are most commonly applied to permanent contracts. If the phase ends without termination, the law assumes that probation was a success, and the new hire’s contract becomes permanent. Firms aren’t required to do anything to convert a probationary employee into a full-time employee formally.

Once an employee’s trial phase ends, they receive full labor protections, meaning they are entitled to notice periods and severance rights. However, even during probation, employers cannot dismiss employees on discriminatory grounds or in bad faith. Violating the law could result in legal action, resulting in mandatory reinstatement or compensation.

Fixed-term or Definite Contracts

Peruvian businesses might use fixed-term contracts for temporary, project-based, or seasonal roles. In Peru, there’s no distinction made within the law between indefinite and definite contracts regarding how probation is treated.

The same probationary durations apply, as long as the contract length can accommodate it. Again, it’s the complexity of the position that defines whether a probationary period can be extended beyond the initial three months, not the length of the contract itself.

Legal Considerations for the Probation Period in Peru

Probation is a perfectly acceptable way for employers to assess the suitability of new hires. Since probation isn’t mandatory, businesses must ensure talent understands that probation is in effect, meaning it must be incorporated into the employee’s employment contract. Without this clause, employees are classified as permanent from their first day of work.

All workers receive the same rights as any other member of staff, including the right to the national minimum wage, anti-discrimination protections, and social security contributions. Termination without justification is permitted, but it cannot be done on discriminatory or bad-faith grounds.

Pay and Working Conditions

Probationary hires must not be paid any less than the Peruvian minimum wage. President Dina Ercilia Boluarte Zegarra announced that the minimum wage would be increased to 1,130 soles from January 1, 2025, in recognition of increases in the cost of living. Unlike other Latin American countries, Peru uses a straightforward system, where all workers, regardless of industry, role, and location, operate under the same minimum wage.

Peru uses a six-day working week, comprising 48 hours, spread over eight-hour days. Overtime is permitted and must be compensated at 25% of the employee’s base wage and 35% for all subsequent hours, under Supreme Decree No. 007-2002-TR.

Social security contributions are mandatory from the first day of employment, even for workers on a trial period. Employers choose between EsSalud and a private healthcare system. Regarding pensions, employers must contribute 13% to the National Pension System (SNP) or up to 12.5% to the Private Pension System (SPP).

Termination and Notice

One of the key advantages of probationary periods is the ease of termination. Employers don’t have to provide justification if they choose to terminate an employee during the probationary phase. The only rules are that it must be done in good faith and cannot be done in a way that’s discriminatory or retaliatory.

Employees are entitled to file a claim with SUNAFIL, the Peruvian labor inspection authority, if they believe that they have been terminated unjustly. This could result in reinstatement orders or compensation payments if the complaint is upheld.

 Dismissed probationary employees are not entitled to any specific severance pay and are not required to receive a notice period in the same way as permanent staff.

Vacation / Holidays

Probationary employees don’t start accruing paid vacation entitlements until they complete their probationary phase. Afterward, they receive 30 calendar days of vacation time after a full year of service.

 However, public holiday entitlements remain the same regardless of status. In Peru, there are 15 public holidays annually, including Labor Day, Independence Day, and All Saints Day. Employees can be asked to work these holidays, but they’re entitled to triple their normal pay or a compensatory day off.

Benefits of Probation Periods in Peru

Implementing a probation period into an employment contract provides benefits for both Peruvian employers and employees. It allows each side to get a feel for the relationship before making a permanent commitment. Here’s a breakdown of the benefits of Peruvian probation:

  • For Employees

Employees get the opportunity to see what it’s like to work for a specific business, ensuring it’s suitable for them before making a full-time commitment to their employer.

Employees still receive the Peruvian minimum wage, pension contributions, and national holiday entitlements.

Employees can resign without notice if they find that the role doesn’t meet their expectations, without worrying about paperwork or other professional etiquette requirements.

  • For Employers

Employers can use probation to assess how a new hire performs with regard to skills, experience, and cultural fit.

Employers don’t have to provide a notice period and can terminate at will. Additionally, they’re not required to fund a severance package if they choose not to proceed with the relationship.

Employers don’t have to take on the financial and legal risks that come with hiring new talent because probation gives them the extra flexibility needed to test-drive new additions to their teams.

Conclusion

Peru is a relatively business-friendly market, enabling foreign businesses to grow with the support of a young, highly educated workforce. Peru operates on a relatively straightforward network of labor laws, but it can still be challenging to navigate, which is where professional help on the ground comes in useful.

At Remote People, we provide logistical support to businesses in managing paperwork, employment contracts, and legal compliance, so that your team can focus on the growth side of your organization. If you’re ready to start hiring, schedule your consultation with one of our local experts today.

Frequently Asked Questions

Most Peruvian probation periods are limited to three months. Positions mandating a significant amount of responsibility allow for three-month extensions, whereas highly specialized and executive-level positions can be extended up to a total of 12 months. Any extensions to the initial three-month period must be stated within the employment contract.

Yes, all businesses must pay the national minimum wage of 1,130 soles per month. No exceptions are made within the law between probationary and permanent employees. However, many roles pay considerably more than the minimum wage, especially within the private sector.

Yes, employers can terminate a worker during their probation period without providing a reason. This is one of the advantages of probation in Peru. However, the law states that termination cannot be done in bad faith or based on discriminatory reasons. 

 

Employees who believe they were terminated based on discrimination, such as pregnancy, retaliation, or union activities, may file a labor dispute. If upheld, employers may be ordered to reinstate the employee or pay compensation.