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11. Employee Benefits

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11. Employee Benefits

Social Security

Social Insurance in Health

The employees are insured by the Public Social Insurance in Health (EsSalud). The employer pays the contribution (9% of the monthly salary).

Complementary insurance for risky activities

Companies that perform risky activities like mining or construction must hire this additional insurance on behalf of its employees exposed to risks.

Pensions

There are two retirement systems. One system is administered by the Government, under which the employer (on behalf of its employees) must pay mandatory contributions to the Oficina de Normalización Previsional (Pension Fund Office). Under this system the employee must contribute 13% of his remuneration.

The other system is the Sistema Privado de Pensiones (Private Pensions System), under which employees contribute approximately 13% of their remuneration to a private Pension Fund Administrator (AFP) selected by each worker.

The employees are free to choose either one of the two systems.

Healthcare and Insurances

Every worker who has served the company for four years has the right to contract, by the employer, a life insurance policy whose coverage is as follows:

  1. Due to the natural death of the worker, the insurance company will pay the worker’s beneficiaries sixteen (16) insurable remunerations that are established based on the average amount received by the worker in the last quarter prior to death;
  2. For the death of the worker as a result of an accident, the beneficiaries will be paid thirty-two (32) insurable monthly remunerations received by the worker on the date prior to the accident;
  3. For total or permanent disability of the worker caused by an accident, thirty-two (32) insurable monthly remunerations received by him on the previous date of the accident will be paid. In this case, said insured capital will be paid directly to the worker or, due to his impediment, to his spouse, curator or special agent.

Required Leave

Holidays and Annual Leave

Workers have the right to paid rest on public holidays:

  • New Year (1 January)
  • Holy Thursday and Good Friday (movable)
  • Labour Day (1 May)
  • Saint Peter and Saint Paul (29 June)
  • National Holidays (28 and 29 July)
  • Battle of Junín (6 August)
  • Saint Rose of Lima (30 August)
  • Naval combat of Angamos (8 October)
  • All Saints (1 November)
  • Immaculate Conception (8 December)
  • Battle of Ayacucho (9 December)
  • Christmas (25 December)

Workers have the right to receive the remuneration for the non-working holiday (ordinarily corresponding to a working day).

Maternity and Paternity Leave

It is the right of the pregnant worker to enjoy 49 days of prenatal rest and 49 days of post-natal rest. Postnatal rest is extended for thirty (30) additional calendar days in cases of multiple birth or birth of disabled children. In the latter case, the disability is accredited with the presentation of the corresponding certificate issued by the health professional duly authorised. The enjoyment of prenatal rest may be deferred, partially or totally, and accumulated by the post-natal, at the decision of the pregnant worker. such a decision must be communicated to the employer at least two months in advance to the expected date of delivery.

Likewise, it is necessary to point out that through Law No. 27591, the license for breastfeeding, through which the working mother, at the end of the period postnatal, the employee has the right to one hour a day to fulfil the right to breastfeed, until her child is one year old. In the case of multiple births, breastfeeding leave will be increased by one more hour per day.

Male workers have the right to be granted 10 days paid leave on the occasion of the birth of their children. It is 20 when it is childbirth multiple or premature and 30 in case of birth with terminal congenital disease or severe disability or in case of serious complications in the mother’s health. The worker must notify the employer, not less than 15 calendar days in advance, regarding the probable date of delivery.

Sickness and Disability Leave

Temporary disability leave is granted when, due to illness or accident, the worker is unable to diligently perform his work during a period of time due to a medical prescription.

These workers have paid rest for up to 20 calendar days in case of accidents or illness. If it exceeds 20 days (up to a maximum of 11 months and 10 days), the employee is entitled to temporary disability leave. In this case, the company must pay the disability subsidy, which is then reimbursed by EsSalud.

Pensions: Mandatory and Typically Provided

There are two retirement systems, one the National Pension System (SNP) managed by the Pension Standardisation Office (ONP) and the Private Pension System (SPP) administrator by the Pension Fund Administrators (AFP). In order to retire from the SNP, the worker must have contributed for at least 20 years to said fund and meet 65 years of age, taking into account these two requirements generate the right to retire in that system. If the worker belongs to the SPP, besides having 65 years, his individual fund administered by the AFP should be enough to obtain a retirement pension. When a worker enters the company, the employer delivers an information brochure so he could choose either SNP or SPP, unless he is registered in any of those systems.

Any questions

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