Peru approves new rules to improve entitlement to vacation leave
Labor Peru Alert
At the end of 2018, Peru approved a legal reform implementing new rules designed to allow vacation leave to be taken in a way that contributes to work/life balance in the private sector. And on the following February 5, Supreme Decree No 002-2019-TR, Regulations on Legislative Decree No 1405, was published, which adds to and clarifies the rules in force and enables companies to identify the main rules they must follow in relation to the taking of vacation entitlement among their workers.
Highlighted below are the most important elements of the new vacation rules:
The new provisions on vacation leave (i.e., those included in Legislative Decree No 1405 and its Regulations) are not applicable to special employment arrangements, meaning those governed by their own rules.
Vacation leave is 30 calendar days, and includes the weekly rest days (Saturday and Sunday), public holidays (May 1, for example ), non-working days and other circumstances requiring time off work (sick leave, for example). The law does, however, allow companies to have in place more favorable vacation rules or systems through a unilateral decision by the employer, agreement, a collective labor agreement or customary usage.
The right to advanced vacation may be negotiated through a prior written agreement between employer and worker. The advanced vacation may even include a greater number of days than the proportion earned on the agreement date.
It is paid back as follows:
If the worker holds a valid employment relationship, any vacation taken in advance is deducted from the vacation earned after the statutory vacation limit has been met.
If the worker leaves before meeting the respective limit, the vacation taken in advance is deducted from the unspent vacation included in the respective final settlement of employee benefits.
A point to note is that although the worker is not legally required to pay for or deduct days’ leave taken in advance out of unspent vacation, worker and employer could sign an agreement for that purpose.
If requested by the worker in writing, vacation may be split as follows:
First block (15 days at least). The time may be taken uninterruptedly or in two periods: of -at least- 7 calendar days, and the other, 8 calendar days. We must underline that the law sets out minimum values, so the parties could include longer periods (which will generate a lower number of days with the benefits of splitting the second block).
Second block (remaining vacation). The time may be taken uninterruptedly in periods of at least 1 calendar day.
The parties can agree on how to use the splitting mechanisms; this means that the worker does not have to use up the vacation time in the first block to be able to use the mechanism for splitting vacation by days (second block).
When a worker submits a request for split vacation (which must set out how the vacation is to be split and the timing for taking the split vacation leave), the employer may accept the request with the proposed terms or amend it by determining different timing. In this latter case (which could arise from operating needs, end of season, etc.), the employer may decide on the timing for taking the leave but not on the proposed way of splitting it.
The final agreement determining the splitting mechanism must be defined in a written agreement between the parties, which must be signed before the vacation leave is taken, and include the start and end dates of the leave.
A reduction to vacation leave (the sale of vacation, in other words) may only be made with respect to the vacation time in the second block (which must be split by day). This measure means that workers will -necessarily- have to take one consecutive 15-day period of vacation leave or two uninterrupted periods of 7 and 8 days, at least.
From the above comments, our main recommendation is to suggest that employers revise their vacation policies in force and implement the necessary changes to the formats and procedures for advancing, splitting and selling vacation applicable to staff, to determine the right tools to ensure these types of procedures are viable and dynamic.