Peru

In Peru, labor law mandates that employers provide a comprehensive benefits package for their employees. These benefits extend beyond just salary and encompass social security contributions, healthcare, paid leave, and bonuses.

Social Security

Employers are required to enroll their employees in the National Health Insurance System (Essalud). They contribute 9% of the employee's monthly salary towards this program. Essalud provides employees with access to medical consultations, diagnostics, medications, and hospitalization services. Additionally, Peruvian law mandates contributions to a pension plan. Employers contribute to the National Pension System (Oficina de Normalización Previsional - ONP) on behalf of their employees.

Paid Leave

Employees are entitled to 30 calendar days of paid vacation per year of work. They also receive paid leave for all official Peruvian holidays. The government determines if public holidays falling on weekends are compensated with a weekday off in lieu. Employees are entitled to 365 days of paid sick leave. However, for the first 20 days, the employer provides compensation, and after that period, the social security system takes over. Female employees are entitled to 98 days of paid maternity leave, divided into 49 days prenatal and 49 days postnatal. Fathers are entitled to paid paternity leave, although the specific duration may vary depending on the employer's policy.

Bonuses

Peruvian law mandates employers to pay their employees two annual bonuses, each equivalent to a month's salary. These bonuses are typically paid in July and December. Employers must also contribute to a CTS (Compensación por Tiempo de Servicios) account for each employee. This benefit functions as a severance payment in case of termination or a source of extra income for employees who remain with the company.

In Peru, many companies go beyond the mandatory benefits and offer additional perks to attract and retain top talent.

Health and Wellness

• Private Health Insurance: Some employers offer supplemental private health insurance with a wider network of hospitals and specialists.
• Life Insurance: Companies may offer life insurance plans to provide financial security for the employee's family in case of death.
• Wellness Programs: Forward-thinking companies might offer on-site fitness facilities, gym memberships, or health and wellness programs to promote employee well-being.

Financial Security

• Profit Sharing: Profitable companies may offer employees a share of the company's profits as an incentive.

Work-Life Balance & Family Support

• Flexible Work Arrangements: Companies may offer flexible work schedules, remote work options, or compressed workweeks to promote a healthy work-life balance for employees.
• Childcare Assistance: Employers might provide on-site childcare facilities, childcare subsidies, or vouchers to help employees manage childcare costs.
• Educational Assistance: Some companies offer tuition reimbursement programs or educational allowances to help employees pursue further education.

Additional Perks

• Meal Vouchers or Subsidies: Companies may offer meal vouchers or a meal allowance to help employees cover lunch expenses.
• Transportation Allowances: Employers may provide transportation allowances to help employees with commuting costs.
• Entertainment and Social Activities: Some companies organize social events, team-building exercises, or recreational activities to boost employee morale and foster a positive work environment.

In Peru, the social security system mandates health insurance coverage for all employees. This coverage is provided through the National Health Insurance System, known as Essalud.

Employer Contributions

Employers are legally required to contribute 9% of the employee's monthly salary towards Essalud. These contributions cover a range of health services for the employee.

Employee Coverage

Employees enrolled in Essalud have access to various medical benefits. These include consultations with general practitioners and specialists, diagnostics, medications, and hospitalization services. Employees can visit Essalud clinics or designated healthcare providers within the network to access covered services.

Peru's retirement system offers a two-pronged approach, with a public system and a voluntary private option. Understanding these options is crucial for employees planning for their future financial security.

Public System (SNP)

The National Pension System (SNP) is administered by the National Pension System Office (Oficina de Normalización Previsional - ONP). Employees contribute 13% of their taxable income towards the SNP. To qualify for a pension under the SNP, employees must reach retirement age (65 for both men and women) and have at least 20 years of contributions. Benefits are calculated based on a percentage of the employee's average earnings during their last five years of contribution, with additional increments for exceeding the minimum contribution period.

Voluntary Private System (SPP)

The Private Pension System (SPP) is managed by Pension Fund Administrators (Administradoras de Fondos de Pensiones - AFPs). Upon entering the workforce, new employees can choose between enrolling in the SNP or the SPP. Employees can choose their contribution rate to the SPP, with a minimum mandatory contribution established by law. Employee contributions to the SPP are deposited into individual investment accounts managed by the AFPs. The returns on these investments determine the size of the retirement benefit. Employees can access their SPP funds upon reaching retirement age or under specific circumstances, such as disability or terminal illness.

Additional Considerations

The SNP offers a guaranteed minimum pension, while the SPP offers the potential for higher returns based on investment performance. However, the SPP also carries investment risk. A recent law allows SPP members to withdraw up to 95.5% of their accumulated funds, raising concerns about long-term retirement security.