New “Equal Work, Equal Pay” Law Must Be Implemented by June 28, 2018

New Legislation Enacted

Following the “equal work, equal pay” principle, the Peruvian Government has enacted Law N° 30709 to regulate how employers can establish the salary differences within their employees. This law sets forth two main rules: (1) companies that have “category charts” (i.e., salary charts) can keep them only if they are in compliance with the equal pay rules; and (2) companies that do not have category charts must implement them before June 28, 2018. Additionally, under the new law, an employer’s failure to comply with objective criteria to promote an employee to a different position is now deemed a hostile act.

Increase of the Minimum Salary

New Legislation Enacted

As of April 1, 2018, the new minimum salary in Peru is S/. 930.00 (equivalent to approximately USD $280.00).

Income Tax Paid by Employers Is Deemed Remuneration

Precedential Decision by Judiciary or Regulatory Agency

The Second Transitory Chamber of Constitutional and Social Law announced that if an employer decides to pay the income tax of any of its employees, then that amount of money will be considered part of the employee’s salary, and will be part of the base to calculate any social benefit.

New Protocol for Inspections to Formalize Labor

New Regulation or Official Guidance

Under a new protocol issued by the Labor Inspection Authority, all labor inspectors must use a set of criteria when determining whether an employment relationship exists. The criteria include: (1) special review of related information for independent contractors receiving fixed and continuous payments from the company; (2) physical inspection of areas and backdoors of the workplace to ensure the employer has not hidden an employee or independent contractor; and (3) signs of the potential existence of an employment relationship: corporate email address, role assignments through formal letters or emails, uniforms provided by the company, etc. This is not an exhaustive list of criteria.