Changes announced for submitting labor contracts for foreign employees
21 Sep 18
IMPACT – MEDIUM
What is the change? The Peruvian government published a decree Sept. 13 modifying the submission and regulation of labor contracts for foreign nationals to speed processing times.
What does the change mean? The modifications introduce an online submission system, Virtual System for Foreign Personnel. Documents uploaded to it are automatically approved, but foreign nationals must wait to receive the resident work visa before starting work.
- Implementation time frame: Effective Oct. 13.
- Visas/permits affected: Labor contracts for foreign nationals.
- Business impact: The change should make it easier for employers to quickly receive approval for labor contracts and begin work permit applications.
- Impact on processing times: Processing and approval times are expected to improve, allowing foreign nationals to submit visa applications immediately after submitting the labor contract. However, delays may occur as the online submission system is implemented.
Background: Processing and approval times for labor contracts for foreign personnel increased from five working days to 15-20 working days due in part to large numbers of Venezuelan nationals migrating to Peru. The introduction of the new online submission system is intended to mitigate these delays.
Starting Oct. 13:
- Labor contracts for foreign nationals and all modifications and contract extensions will be submitted online through the new Virtual System for Foreign Personnel. Documents uploaded to the system will be automatically approved, but foreign nationals may only initiate work activities once they receive the resident work visa. Applicants must upload the labor contract signed by both parties and a sworn declaration signed by the employer’s legal representative, and pay a government filing fee.
- If foreign nationals lose their residence permit, their labor contract will automatically be canceled.
- If a foreign national is exempt from submitting a labor contract, the employer must keep documentation of the exemption for five years after the employee’s contract has ended. Foreign nationals are exempt from submitting their labor contract if they are the spouse, child, ascendant, descendant or sibling of a Peruvian national or if they hold a residence visa.
Analysis & Comments: The introduction of the online submission system is a positive change for employers and will greatly reduce the evaluation and approval times for labor contracts by allowing foreign nationals to initiate visa procedures immediately after submitting labor contracts. However, the virtual system must be fully implemented for these modifications to take effect.
Source: Deloitte LLP. Deloitte LLP is a limited liability partnership registered in England and Wales with registered number OC303675 and its registered office at 1 New Street Square, London EC4A 3HQ, United Kingdom.