The rules on severance pay in detail
An employee is entitled to statutory termination pay in Peru, if s/he has passed the probation period (usually three months) and the termination was on the initiative of the employer.
The calculation is made as follows:
- Fixed term contracts: the indemnity is equivalent to 1.5 times the monthly salary for each month that remains until the end of the contract, with a maximum of 12 months’ salary.
- Indefinite term contracts: the indemnity is equivalent to 1.5 times the monthly salary for each year of service to a maximum of 12 payments. Periods of time of less than one year will be paid pro rata.
Additional reasonable compensation is possible for seriously culpable behaviour by the employer.
Author: Estudio Olaechea
Date: December 2018