Employer of Record in Venezuela

An Employer of Record (EOR) in Venezuela is a company that legally hires employees on your behalf. This means you can build a team in Venezuela without setting up a local entity. The EOR handles all the legal and HR responsibilities that come with employment. This includes payroll, taxes, benefits, and compliance with Venezuelan labor law. Rivermate is an EOR provider that can help you with this.

How an Employer of Record (EOR) Works in Venezuela

Using an EOR in Venezuela simplifies your expansion. You find the talent, and the EOR takes care of the rest.

Here is how it works:

1. You Find the Candidate: You recruit and select the person you want to hire in Venezuela.
2. The EOR Hires Them: The EOR legally hires your chosen candidate under their local Venezuelan business entity. They handle the employment contract, making sure it complies with all local labor laws.
3. Onboarding: The EOR manages the entire onboarding process. This includes setting up payroll, enrolling the employee in mandatory government social security and benefits programs.
4. You Manage Your Employee: You manage your employee’s day-to-day work and responsibilities. They are a part of your team, contributing to your company goals.
5. EOR Handles HR and Payroll: The EOR processes payroll, withholds taxes, and makes social security contributions. They also manage benefits and ensure you stay compliant with Venezuelan regulations.
6. Ongoing Compliance: The EOR keeps up with any changes in Venezuelan labor law. This protects you from legal risks and potential fines.

Why use an Employer of Record in Venezuela

Expanding your team into Venezuela can be complex. An EOR makes the process much simpler and faster. You get to focus on growing your business while the EOR handles the legal and administrative burdens of local employment.

Here are some key reasons to use an EOR in Venezuela:

• Avoid Setting Up a Company: You can legally hire employees in Venezuela without the time and expense of establishing a local legal entity.
• Stay Compliant with Local Laws: Venezuelan labor laws are detailed and can change. An EOR is an expert in these laws and ensures you follow all rules for contracts, benefits, and terminations.
• Simplify Payroll and Taxes: The EOR manages all aspects of payroll, including calculating and withholding the correct taxes and social security contributions required by Venezuelan law.
• Offer Competitive Benefits: An EOR can provide your employees with access to competitive benefits packages, which helps you attract and retain top talent.
• Reduce Risk: The EOR assumes the legal responsibility for employment. This significantly reduces your risk of non-compliance with local labor and tax regulations.
• Speed Up Market Entry: You can hire employees and start operating in Venezuela in a matter of days, not months. This gives you a significant advantage in a competitive market.

Rivermate's transparent pricing model eliminates complexity with a single, competitive monthly fee per employee. Unlike traditional PEO providers, our pricing in Venezuela includes comprehensive HR support, benefits administration, compliance management, and access to our proprietary dashboard for real-time workforce analytics. No hidden costs, no setup fees—just straightforward pricing that scales with your business needs while ensuring full legal compliance in Venezuela.

Hiring in Venezuela requires understanding a complex and protective labor law system. The primary law governing employment is the Organic Labor Law for Workers (LOTTT). This law strongly favors employees, making it crucial to navigate the hiring process with care. Despite economic challenges, Venezuela has a skilled workforce, especially in fields like IT and software development.

Employment contracts & must-have clauses

While you can make oral agreements, it is highly recommended to have a written employment contract in Venezuela. In the absence of a written contract, the employee's statements about the terms of employment are generally considered true.

There are two main types of employment contracts:

• Indefinite-term contracts: These are the standard and most common type of contract with no set end date.
• Fixed-term contracts: These contracts are for a specific period and must be in writing. They are only allowed in specific situations, such as for a particular project or to temporarily replace another employee.

A written contract should include the following:

Probation periods

You can include a probation period in an indefinite-term contract. This period allows both you and the employee to assess the working relationship.

• The maximum length of a probation period is 30 days.
• During this time, either you or the employee can end the employment relationship without needing to provide a reason.

Working hours & overtime

The standard workweek in Venezuela is 40 hours, typically spread over five days with eight hours per day.

• Overtime: Any work done beyond the standard 40-hour week is considered overtime. The pay rate for overtime is at least 150% of the employee's regular hourly wage.
• Limits on Overtime: There are limits to how much overtime an employee can work, generally no more than 10 hours per week and 100 hours per year.
• Rest Days: Employees are entitled to at least one full day of rest per week, which is usually Sunday.

Public & regional holidays

Venezuela observes a number of national public holidays. It's important to be aware of these as they can impact work schedules. Some of the key holidays include:

• New Year's Day (January 1)
• Carnival (movable dates in February or March)
• Declaration of Independence (April 19)
• Labor Day (May 1)
• Battle of Carabobo (June 24)
• Independence Day (July 5)
• Simón Bolívar's Birthday (July 24)
• Christmas Day (December 25)

Some regions and states also have their own local holidays.

Hiring contractors in Venezuela

You can hire independent contractors for specific projects or specialized tasks. This can offer flexibility and access to particular skills without the obligations of a full-time employment relationship.

However, it is crucial to classify workers correctly. Misclassifying an employee as an independent contractor can lead to significant penalties. Venezuelan authorities will look at the actual nature of the working relationship, not just the contract. If a contractor is treated like an employee (for example, by having set working hours and being under direct supervision), they may be reclassified as an employee. This could make you liable for back pay, benefits, and other employment-related costs.

An Employer of Record (EOR) can help you avoid these risks. An EOR acts as the legal employer for your workers in Venezuela. They handle all the legal and HR aspects of employment, including compliant contracts, payroll, and benefits. This ensures that your hiring practices follow Venezuelan labor laws and significantly reduces the risk of worker misclassification.

Navigating compensation and payroll in Venezuela requires a clear understanding of local rules. You need to follow specific laws for paying your team correctly and on time. This includes everything from how often you pay them to the taxes you withhold. Staying compliant is key to smooth operations in the country.

Payroll cycles & wage structure

In Venezuela, you can pay your employees either bi-weekly or monthly. If you choose a bi-weekly schedule, you must make payments on the 15th and the last day of the month.

Your employees' pay isn't just their base salary. It also includes mandatory bonuses and profit sharing. You are required to share 15% of your net profits with your employees. You also need to provide a food benefit, known as a "Cestaticket".

Overtime & minimums

The standard workweek is a maximum of 40 hours, based on five eight-hour days. Any work done beyond these hours is overtime. You must pay employees 150% of their regular salary for any overtime hours worked. The monthly minimum wage is set at 130 VES.

Employer taxes and contributions

As an employer in Venezuela, you have several tax and contribution obligations. These are calculated based on your employees' salaries.

Employee taxes and deductions

Your employees also contribute to social programs through deductions from their paychecks. You are responsible for withholding these amounts and remitting them to the proper authorities.

In Venezuela, benefits and leave are generous. The law provides strong protections for employees. This includes paid time off for vacations, sickness, and family events. You will also find several mandatory bonuses. Understanding these rules is key to hiring in the country.

Statutory leave

Venezuelan law outlines several types of required leave for employees.

• Annual Leave: After one year with your company, employees get 15 paid vacation days. For each following year, they earn one extra day, up to a total of 30 days.
• Maternity Leave: Mothers receive 26 weeks of paid maternity leave. This is split into six weeks before the birth and 20 weeks after.
• Paternity Leave: Fathers get 14 days of paid leave when their child is born.
• Sick Leave: Employees can take up to one year of sick leave for an illness or injury. You pay for the first three days. After that, social security pays a portion of the employee's salary.
• Bereavement Leave: In case of a direct family member's death, employees are entitled to two days of paid leave.
• Marriage Leave: Employees get three days of paid leave for their wedding.

Public holidays & regional holidays

Venezuela has national public holidays. If a holiday falls on a weekend, it is usually not moved to a weekday.

Typical supplemental benefits

Venezuelan law requires several benefits. Many companies offer extra benefits to attract and keep talent.

How an EOR can help with setting up benefits

Setting up employee benefits in a new country can be complex. An Employer of Record (EOR) simplifies this process for you.

An EOR already has a legal entity in Venezuela. This means you don't have to set one up. They handle all local labor laws and regulations. This ensures you are always compliant.

An EOR will:

• Onboard new employees correctly.
• Manage payroll and all required deductions.
• Administer all statutory and supplemental benefits.
• Ensure compliance with changing labor laws.

Using an EOR saves you time and reduces risk. You can focus on growing your business while the EOR takes care of the administrative work.

When you part ways with an employee in Venezuela, you need to follow a specific process. The country's labor laws protect employees, so you must handle terminations carefully. In most cases, you need a "just cause" to end an employment contract. This means you must have a valid, legally recognized reason for the dismissal. If you don't, you could face legal challenges and penalties.

Notice Periods

Venezuelan law requires you to provide a notice period when you terminate an employee without just cause. The length of the notice depends on how long the employee has worked for your company. If you don't provide the required notice, you have to pay the employee's salary for that period instead.

Here are the minimum notice periods:

Keep in mind that an employment contract or collective agreement can specify longer notice periods.

Severance Pay

In Venezuela, severance pay is a key part of the final payment to a departing employee. It's known as "prestaciones sociales." Employees are entitled to this payment regardless of the reason for termination, with a few exceptions for specific just causes.

The calculation for severance pay is based on the employee's last salary and their length of service. It includes one month's salary for each year of service. The final payment should also include any accrued vacation days and outstanding bonuses.

How Rivermate handles compliant exits

When you use an Employer of Record like Rivermate, we manage the entire offboarding process for you. We make sure every termination complies with Venezuelan labor law.

Here’s how we help:

• Documentation: We prepare and handle all the necessary termination paperwork.
• Just Cause Verification: We guide you through the process of establishing and documenting a just cause for termination to minimize legal risks.
• Severance Calculations: We accurately calculate all final payments, including severance, accrued vacation, and any other benefits.
• Legal Compliance: We stay up-to-date on Venezuelan labor regulations to ensure every step of the process is compliant. This includes notifying the Labor Inspectorate when required.

Getting work authorization in Venezuela involves navigating a complex system. For foreign nationals to work legally, they need the right visa, and the process requires careful attention to local rules. The main work visa is the "Autorización de Trabajo y Visa de Transeúnte Laboral" (TR-L), which is sponsored by an in-country employer. This process involves proving the need for a foreign worker and getting approvals from different government bodies.

Employment visas & sponsorship realities

Using an Employer of Record (EOR) is a practical way to hire employees in Venezuela without setting up your own local entity. An EOR can sponsor work visas, but it's important to understand the realities of this process.

What an EOR can typically sponsor:

• Long-Term Work Visas (TR-L): This is the main visa for foreign employees working in Venezuela. An EOR with a registered legal entity in the country can sponsor this visa, which is usually valid for one year and can be extended.
• Short-Term Work Visas (90-Day TR-L): For temporary assignments or projects, an EOR can help secure this visa for employees who will be in Venezuela for a short period.
• Business Visas (TR-N): EORs can also assist with business visas for activities like meetings or negotiations. This visa is typically valid for a year and allows stays of up to 180 days.

Practical routes and limitations:

The main route for employing someone long-term is through the TR-L visa, sponsored by the EOR. The EOR acts as the legal employer, handling the necessary paperwork with the Ministry of Labor and immigration authorities.

However, there are practical limitations:

• Job Scope Alignment: A key challenge is that the employee's job must align with the EOR's registered business activities in Venezuela. If you're hiring for a highly specialized role that doesn't fit the EOR's business scope, sponsorship may not be possible.
• Bureaucratic Delays: The Venezuelan visa and work permit process can be slow. Employers should be prepared for potential delays in processing applications.
• Changing Regulations: Labor and immigration laws in Venezuela can change, so staying updated on the latest requirements is crucial.

Business travel compliance

For short-term business visits, foreign nationals need a business visa (TR-N). This visa is for activities that are not considered work, such as attending meetings, conferences, or training.

Key compliance points for business travel:

• Visa Requirement: All foreign nationals must get a business visa before entering Venezuela for business activities.
• Duration of Stay: The TR-N visa is usually granted for one year and allows for stays of up to 180 days within that year.
• No Work Allowed: It is critical that visitors on a business visa do not engage in any employment activities. The purpose of their visit must strictly be for business-related meetings or events.

Using an EOR can help ensure you are compliant with these regulations, even for short-term visits. They can guide you on the correct visa type and help prepare the necessary documentation.