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Peru - Compensation & Benefit Legislation

CAPITAL

Lima

 

CLIMATE

Peru’s climate varies from tropical in east to dry desert in west. The climate varies from temperate to frigid in Andes.

 

LANGUAGES

Spanish (official), Quechua (official), Aymara.

 

LEGAL SYSTEM

Peru’s legal system is based on civil law system. Peru has not accepted compulsory ICJ jurisdiction.

 

CURRENCY

Peruvian Nuevo Sol (1 USD = 3.63380 PEN as of March 1, 2002)

 

PERU - COST-OF-LIVING

ERI's Relocation Assessor is a recommended source for cost-of-living data.

 

PERU - EMBASSY/CONSULATES

U.S. Embassy at Lima

Avenida Encalada Cuadra 17

Monterrico, Lima

Peru

P.O. Box 1995

APO AA 34031-5000

Lima, Peru

Telephone: [51] (1) 434-3000

Fax: [51] (1) 434-4182

http://usembassy.state.gov/lima/

 

Embassy of Peru at Washington D.C.

1700 Massachusetts Avenue N.W.

Washington D.C. 20036

Telephone: (202) 833-9860

Fax: (202) 659-8124

E-mail: peru@peruemb.org

http://www.peruemb.org/intro.html

 

PERU - HOLIDAYS

 

PERU - LEAVE

Annual Leave: 30 days paid annual leave each year.

 

Maternity Leave: 90 days – 100% paid (paid for by social security).

 

PERU - MINIMUM AGE

The legal minimum age for employment is 14; however, children between the ages of 12 and 14 may work in certain jobs if they obtain special permission from the Ministry of Labor and certify that they also are attending school.

 

In certain sectors of the economy, higher minimums are in force: age 14 in agricultural work; age 15 in industrial, commercial, or mining work; and age 16 in the fishing industry. The law prohibits children from engaging in certain types of employment, such as work underground, work that involves the lifting and carrying of heavy weights, work where the child or adolescent is responsible for the safety of others; night work; or any work that jeopardizes the health of children and adolescents, puts at risk their physical, mental, and emotional development, or prevents their regular attendance at school.

 

(Section 6.d. Acceptable Conditions of Work, Peru – Report of Human Rights Practices, 2001, U.S. Department of State.)

 

PERU - MINIMUM REMUNERATION

In March 2000, the Government raised the statutory minimum wage to approximately $128 (450 soles) a month. This is not considered sufficient to provide a decent standard of living for a worker and family. The Government estimates the poverty line to be approximately $45 (157 soles) a month per person. However, this figure varies from region to region. According to some estimates, as much as half the work force earns the minimum wage or below, because such a great proportion work in the informal sector, which is largely unregulated. The Ministry of Labor is responsible for enforcing the minimum wage.

 

(Section 6.e. Acceptable Conditions of Work, Peru – Report of Human Rights Practices, 2001, U.S. Department of State.)

 

PERU - REMUNERATION

ERI's Geographic and Salary Assessors are recommended sources for international remuneration covering 189 countries.

 

PERU - REPORT OF HUMAN RIGHTS PRACTICES (2001, U.S. DEPARTMENT OF STATE)

Section 6 Worker Rights

 

a. The Right of Association

 

The Constitution and the law provide for the right of association; however, worker rights advocates claim that the laws are overly restrictive. About 5 percent of the formal sector workforce of 8.5 million belong to organized labor unions. It is estimated that close to half of all workers participate in the informal sector of the economy. Labor regulations provide that workers may form unions on the basis of their occupation, employer affiliation, or geographic territory. Workers are not required to seek authorization prior to forming a trade union, nor may employers legally condition employment on union membership or nonmembership. However, groups including the International Confederation of Free Trade Unions (ICFTU) assert that laws promulgated by the Fujimori administration in 1992, as well as provisions included in the 1993 Constitution, fail to protect the rights of workers to form unions. Labor advocates claim that many workers are reluctant to organize due to fear of dismissal.

 

According to the International Labor Organization (ILO), several aspects of the labor law are not consistent with the international standard of freedom of association. The ILO has criticized specifically a provision that permits businesses to employ up to 30 percent of their workforce from workers between the ages of 16 to 25; workers in this age bracket are precluded from union membership and participation. As of year's end, the Government had enacted no legal changes.

 

In December 2000, President Paniagua established a tripartite National Labor Council for the Government, workers, and business to address labor problems. In September President Toledo reinstalled the National Labor Council and opened two regional councils, one in Arequipa and one in Cusco, to address labor issues unique to each region.

 

Unions represent a cross section of political opinion. Although some unions traditionally have been associated with political groups, the law prohibits unions from engaging in explicitly political, religious, or profit-making activities. Union leaders who ran for Congress in the elections did so without official union sponsorship. Nevertheless, some union activists who run for public office receive unofficial backing from their unions.

 

The ILO has requested modifications to the laws that regulate the right to strike, including a requirement that a majority of workers in an enterprise, regardless of union membership, must vote in favor of any strike. Official strikes require secret ballot approval by a majority of all workers in a company, whether union members or not; labor activists find the requirement to be onerous. A second vote must be taken, if at least 20 percent of the workers petition it. However, labor rights advocates complain that many workers are reluctant to participate even in secret ballots, due to fear of employer retaliation, particularly since a full list of workers who attend meetings in which such votes are taken must be submitted to management. Strikes may only be called in defense of labor rights.

 

There were numerous peaceful strikes and work stoppages during the year. The Government took no actions to prevent the strikes or to reprimand participants. There were confrontations between union-affiliated protesters and police. No abuses were reported when the police removed roadblocks set up by protesters.

 

The law restricts unions that represent workers in public services deemed essential by the Government from striking. However, there were strikes during the year, including strikes by public workers.

 

There are no restrictions on the affiliation of labor unions with international bodies. Several major unions and labor confederations belong to international labor organizations such as the ICFTU, the international trade secretariats, and regional bodies.

 

b. The Right to Organize and Bargain Collectively

 

The Constitution recognizes the right of public and private sector workers to organize and bargain collectively; however, it specifies that this right must be exercised in harmony with broader social objectives. Labor regulations provide that workers may form unions on the basis of their occupation, employer affiliation, or geographic territory. The regulations prohibit probationary, apprentice, and management employees from union membership. The law does not prohibit temporary employees from joining a union, but they may not join the same union as permanent workers.

 

According to the regulations, union officials must be active members of their union, but the number of individuals each union may designate as "official" is limited, as is the amount of time they may devote to union business on company time. The Labor Code requires employers to reinstate workers or compensate financially those whom companies have fired for union activities. It is illegal to fire workers for union activities, although reports from labor activists indicate that this is a common practice. The labor movement criticizes the amended Employment Promotion Law, which it asserts makes it easier for employers to dismiss employees and thereby to impede the right of workers to bargain collectively. There are no legal restrictions that prevent unions from negotiating for higher levels of worker protection than the baseline standards provided for by law.

 

A union must represent at least 20 workers in order to become an official collective bargaining agent. Representatives may participate in collective bargaining negotiations and establish negotiating timetables. Management negotiating teams may not exceed the size of union teams, and both sides are permitted to have attorneys and technical experts present as advisers.

 

In November 2000, the ILO's Committee of Freedom of Association recommended that the Government enforce legislation protecting workers from dismissal on account of membership in a union or participation in union activities. The Government has taken no action on this request.

 

The main union confederations criticize the Employment Promotion Act, amended in 1995 and 1996, for restricting the rights of workers, including the freedom of association. Unions also complain that the law eliminates the right of dismissed workers to compulsory reinstatement if they prove that employers dismissed them unjustly. In practice, companies offer financial compensation instead of reinstatement as the legislation allows. Although the law prohibits companies from firing workers solely for involvement in union activities, this provision has not been enforced rigidly. There is no legal protection against employer interference in trade unions.

 

Labor regulations permit companies unilaterally to propose temporary changes in work schedules, conditions, and wages, and to suspend collective bargaining agreements for up to 90 days, if obliged to do so by worsening economic circumstances or other unexpected negative developments, provided that they give their employees at least 15 days' notice of such changes. However, worker rights advocates allege that, in practice, few employers respected this provision. If workers reject an employer's proposed changes, the Ministry of Labor is required to resolve the dispute based on criteria of "reasonableness" and "economic necessity." Whether the changes proposed by employers in such instances are upheld in full or in part, employers are required to adopt all possible measures, such as the authorization of extra vacation time, in order to minimize the negative economic impact on their employees.

 

Although a conciliation and arbitration system exists, union officials complain that their proportionate share of the costs of arbitration often exceeds their resources. In addition, union officials claim that, as the law prohibits temporary workers from participating in the same union as permanent workers, companies have resorted to hiring workers "temporarily" to prevent increases in the number of union members. Although the law restricts the number of temporary workers hired to 20 percent of a company's work force, worker rights advocates allege that this quota rarely is respected. Employers deny that they are biased against unions, and argue that the labor stability provisions of the legislation have made long-term commitments to workers too expensive.

 

There are four export processing zones (EPZ's). Special regulations aimed at giving employers in EPZ's and duty free zones a freer hand in the application of the law provide for the use of temporary labor as needed, for greater flexibility in labor contracts, and for setting wage rates based on supply and demand. As a result, workers in such zones have difficulty unionizing. Worker rights advocates admit that these zones are few in number and do not contribute substantively to labor's unionizing difficulties.

 

c. Prohibition of Forced or Compulsory Labor

 

The Constitution prohibits forced or compulsory labor, and there were no reports of forced labor during the year. The law specifically prohibits forced or bonded labor by children. According to PROMUDEH and the Ministry of Labor, there were no reports of forced child labor. Forced labor previously was found in the gold mining industry in the Madre de Dios area; however, the changing nature of the industry and government efforts to regulate it seem to have addressed the problem. NGO sources and the ILO reported in 1999 that mechanization largely has replaced manual labor, and the Ministry of Labor inspection programs helped deter illegal child labor in this industry. 

 

d. Status of Child Labor Practices and Minimum Age for Employment

 

The Child and Adolescent Code of 1992 governs child and adolescent labor practices and restricts child labor based upon the age of the child, hours worked, and occupation; however, child labor is a serious problem. The legal minimum age for employment is 14; however, children between the ages of 12 and 14 may work in certain jobs if they obtain special permission from the Ministry of Labor and certify that they also are attending school. In August the Ministry reported that 2,228 of these requests for permission to work have been approved. In certain sectors of the economy, higher minimums are in force: age 14 in agricultural work; age 15 in industrial, commercial, or mining work; and age 16 in the fishing industry. The law prohibits children from engaging in certain types of employment, such as work underground, work that involves the lifting and carrying of heavy weights, work where the child or adolescent is responsible for the safety of others; night work; or any work that jeopardizes the health of children and adolescents, puts at risk their physical, mental, and emotional development, or prevents their regular attendance at school. As many as 1.9 million children work primarily in the informal sector to help support their families. Of this total, NGO's estimate that some 600,000 children are under the age of 12.

 

Human and labor rights groups criticized the modification of the Child and Adolescent code, passed in August 2000, that maintained the minimum age for work at 12 years old (with permission), and argued that it contradicts international guidelines on the minimum age of child workers. On May 10, Congress ratified ILO Convention 138 on the minimum working age. In October Congress ratified ILO Convention 182 on elimination of the worst forms of child labor.

 

Many children are pressed to help support their families from a very early age by working in the informal economy, where the Government does not supervise wages or working conditions. Other children and adolescents work either in formally established enterprises or as unpaid workers at home. There are reports of child prostitution (see Section 5).

 

Adolescents must be authorized to work and must be registered unless they are employed as domestic workers or as unpaid family workers. Adolescents may only work a certain number of hours each day: 4 hours for children ages 12 through 14, and 6 hours for children ages 15 through 17. Adolescent employment must be remunerated in accordance with the principle of equal pay for equal work. In practice, the Child and Adolescent Code provisions are violated routinely in the informal sector. Child and adolescent laborers work long hours in the agricultural sector. Other children reportedly are employed at times in dangerous occupations or in high-risk environments, such as informal gold mining, garbage collection, loading and unloading produce in markets, brick making, coca cultivation, or work in stone quarries and fireworks factories, among others. Some child and adolescent labor tends to be seasonal.

 

Firms found guilty of violating child labor laws can be fined and operations suspended. The Ministry of Labor's inspectors have legal authority to investigate reports of illegal child labor practices. Inspectors conduct routine visits without notice to areas where child labor problems are reported. Inspectors maintain contact with a wide variety of local NGO's,

 

Church officials, law enforcement officials, and school officials. The Ministry reports that there are a total of 150 labor inspectors, of which 65 work in Lima. These inspectors conduct all labor inspections, both for adults and children. Labor inspections are primarily conducted in the formal sector. The National Police and local prosecutors exercise law enforcement authority. The Children's Rights Defender reports to PROMUDEH.

 

The Constitution does not prohibit specifically forced or bonded labor by children, although there are laws that prohibit this practice, and there were no reports that it occurred (see Section 6.c.).

 

e. Acceptable Conditions of Work

 

The Constitution provides that the State promote social and economic progress and occupational education. It states that workers should receive a "just and sufficient" wage to be determined by the Government in consultation with labor and business representatives, as well as "adequate protection against arbitrary dismissal."

 

In March 2000, the Government raised the statutory minimum wage from $117 (410 soles) a month to $128 (450 soles), which is not considered sufficient to provide a decent standard of living for a worker and family. The Government estimates the poverty line to be approximately $45 (157 soles) a month per person. However, this figure varies from region to region. According to some estimates, as much as half the work force earns the minimum wage or below, because such a great proportion work in the informal sector, which is largely unregulated. The Ministry of Labor is responsible for enforcing the minimum wage.

 

In April Congress passed legislation that increased the Labor Ministry's ability to enforce compliance with laws requiring businesses to pay social security and other benefits.

 

The Constitution provides for a 48-hour workweek, a weekly day of rest, and an annual vacation. In addition, it prohibits discrimination in the workplace, although discrimination continued to be a problem in practice. A Supreme Decree states that all workers should work no more than 8 hours per day; however, in practice labor advocates state that workers are pressured to work longer hours to avoid dismissal.

 

While occupational health and safety standards exist, the Government lacks the resources to monitor firms or enforce compliance. Labor advocates continued to argue that the Government dedicates insufficient resources to enforce existing legislation. The Ministry of Labor employs a force of 150 inspectors to carry out unannounced visits throughout the country. In September the Minister of Labor announced that 80 percent of the companies inspected were found to be in compliance with labor laws. The Ministry of Labor continued to receive worker complaints and intervened in hundreds of cases.

 

When firms are found to be in violation of the law, the Government sanctions them with fines or, in some cases, closure. In cases of industrial accidents, the level of compensation awarded to the injured employee usually is determined by agreement between the employer and the individual involved. The worker does not need to prove an employer's culpability in order to obtain compensation for work-related injuries. No provisions exist in law for workers to remove themselves from potentially dangerous work situations without jeopardizing their continued employment.

 

f. Trafficking in Persons

 

A 1999 law prohibits trafficking in persons and alien smuggling, which is defined as promoting, executing, or assisting in the illegal entry or exit of persons from the country. Laws prohibiting Kidnaping, sexual abuse of minors, and illegal employment are enforced and could also be used to sanction traffickers in persons. There are no programs to educate vulnerable groups about the dangers of trafficking or to assist victims.

 

There were two reports during the year that persons were trafficked from the country. Early in the year, three women in their twenties were forced into prostitution in Korea after they were ostensibly hired as domestic workers. In May a Peruvian intermediary contracted three men to work as mechanics in Abu Dhabi. The men alleged that once they arrived in Abu Dhabi, their employer took away their passports and never paid them for work performed over several months. With assistance from a foreign consulate in Abu Dhabi and an NGO, the men were repatriated in October.

 

PERU - SOCIAL SECURITY

Social Security Office of International Programs:

 

http://www.ssa.gov/SSA_Home.html

 

PERU - STANDARD WORKWEEK

The Constitution provides for a 48-hour workweek, a weekly day of rest, and an annual vacation.

 

A Supreme Decree states that all workers should work no more than 8 hours per day; however, in practice labor advocates state that workers are pressured to work longer hours to avoid dismissal.

 

(Section 6.e. Acceptable Conditions of Work, Peru – Report of Human Rights Practices, 2001, U.S. Department of State.)