This article summarises the most important legislative developments in Peruvian employment law in 2018.
By: Juan Carlos Valera
Firm: Estudio Olaechea
Annual leave (in force from 13 September 2018)
Several amendments have been made relating to paid leave. These changes are included in Legislative Decree No. 713 regulating paid leave for employees subject to the general private sector labour regime. The main changes are set out below.
Leave in advance
Leave can be taken in advance borrowed from the next vacation period as long as there is a written agreement between the employer and employee, in accordance with the provisions of the law.
If the employment relationship is terminated, the leave days that have been granted in advance to an employee will be deducted from leave days the employee has accrued at the date his or her employment ends. The employee will not be liable to compensate the employer for any days taken that are in excess of and cannot be deducted from days accrued.
Upon written request an employee, can divide his or her holiday period as follows:
- fifteen calendar days, which may be enjoyed continuously or in periods of no less than seven and eight uninterrupted days; and,
- the remaining 15 calendar days of holiday, which can be broken up into periods of less than seven calendar days and at minimum, one calendar day.
The split and timing of an employee’s holiday must be agreed in writing between the parties.
Payment in lieu of leave
Employees’ holidays can be reduced from thirty to fifteen calendar days with the employee receiving fifteen days’ salary as compensation. The reduction must be agreed in writing.
The reduction can only be applied to the part of the holiday entitlement that can be taken in periods of under seven calendar days.
We believe that this change is positive, because previously, employees had to take seven vacation days when they only need two days. Now an employee can use holiday entitlement according to his or her needs. It is important to remember that there must be an agreement between employer and employee on these new holiday arrangements.
Equal pay (in force since 9 March 2018)
Law 30709 was enacted, law prohibiting wage discrimination between men and women as set out below.
- Remuneration will be set by the employer without discrimination.
- The employer must ensure that its plans for vocational training and the development of the working skills of its employees guarantee equality between women and men.
- The prevention and punishment of sexual harassment is specifically guaranteed.
- Employers are prohibited from dismissing or not renewing an employee’s contract for reasons related to pregnancy, or from dismissing or not renewing a lactating employee’s contract.
The Regulation linked to this Law, which sets out detailed provisions of the Law contains the following provisions.
Employers must establish charts of categories and functions within their organisation with the following minimum content:
- jobs included in the category;
- a general description of the characteristics of the jobs that justify grouping them into a category; and
- the order and/or hierarchy of the categories on the basis of their value and the need for the economic activity in question.
Employers have the power to establish remuneration policies, which do not directly or indirectly discriminate on the basis of sex.
If wage discrimination based on gender is alleged, the employer must prove that the positions concerned are not equal or do not have the same value.
Workers belonging to the same category may receive different salaries if these differences are justified by objective criteria such as seniority, performance, collective bargaining, a shortage of supply of skilled labour for a given position, cost of living, work experience, academic or educational profile, performance or workplace, among others.
Under no circumstances shall differences related to pregnancy, maternity, paternity, breastfeeding, family responsibilities or being a victim of violence be considered objective and reasonable.
The employer is responsible for implementing measures to guarantee a work environment based on respect and non-discrimination, as well as compatibility with or conciliation of personal, family and work life.
Policies based on the qualifications required for the performance of the job or means of training offered are not considered discriminatory because they are based on an objective and reasonable justification.
Likewise, job offers intended to promote a more equitable gender balance within a specific occupational sector are not considered discriminatory.
We believe that this regulation was necessary to prevent discrimination. Before this Law, there were only two conditions: non-discrimination and equal pay for equal work. It was also very difficult to determine the ‘value’ of a job (a formal procedure which, by analysing the content of jobs, assigns them a numerical value).
The objective of Law 30709 is to ensure compliance with the principle of equal pay for work of equal value. So, the employer must create a table setting out the categories and functions of all employees’ roles. Once the chart is created, there will be salary ranges, according to the characteristics of each type of work in the company.
In summary, the Law seeks to eliminate wage discrimination between men and women, except in situations that are objectively and reasonably justified.
Paternity leave (In force since 6 July 2018)
Law 29409, granting the right to paternity leave to employees in the public and private sectors has been amended. Now an employer must grant ten days’ paid leave to a father after the birth of his child. Paternity leave allowance must be the same as the pay the employee would have received for a normal working day. The details of the amended Law are set out below:
Paternity leave is granted by the employer to the father for ten consecutive calendar days in cases of natural birth or cesarean section.
In the case of premature births and multiple births, leave will be granted for 20 consecutive calendar days.
In cases of births with terminal congenital disease, severe disability or serious complications in the mother’s health, 30 consecutive calendar days’ leave will be granted.
The term of the paternity leave will start from the date the employee indicates from one of these alternatives (chosen by the employee):
the birth date of the baby;
the date the mother or infant is discharged from hospital;
the third day before the due date, confirmed by a medical certificate.
If the mother dies in childbirth or during her maternity leave, the father will take over her leave entitlement.
An employee who requests this paid paternity leave will have the right to use his holiday entitlement to extend his absence, from the day after paternity leave ends. The intention to take holiday must be communicated to the employer no less than fifteen calendar days before the anticipated date of birth.
Paternity leave is granted specifically because of childbirth. For that reason, if the birth occurs during the employee’s annual leave or paid breaks, paternity leave cannot be carried over and taken at a later date.
We believe that this amendment is positive because it facilitates more quality time for fathers with their children, which will tend to lead to a better working environment. We also think that paternity leave entitlement should be increased to close to the length of leave given to mothers, since newborns have specific needs.