If you are interested to do business in Uruguay or are already involved in it, you will need knowledge about employment law in Uruguay.
The Uruguayan Employment Law Office oversees employment law. Ministry of Labor and Social SecurityIt shares many similarities with other Latin American countries’ employment regulations. However, it also contains its own peculiarities.
Hiring staff via a recruitment agency is a great option for anyone looking to engage in a short-term, or limited-scale, relationship with the Uruguayan market. professional employer organization (PEO) in UruguayThis could be a good option, and it will provide the benefit of guaranteed compliance with all aspects employment law.
However, if your goal is to make a deeper commitment, you will need oversee the implementation of the employment law in the country. This will involve securing the services and expertise of a reliable corporate lawyer in Uruguay.
Below is a guide to Uruguayan employment law. It covers standard working hours, most commonly used contracts by investors in Uruguay, vacation and leave allowances, as well as statutory contributions that employees must monitor.
To learn more about our services in Uruguay and other aspects of doing business in Uruguay, please contact us. contact us today.
Standard working hours in Uruguayan employment law
Uruguayan employment law says that a typical working week lasts between 44 and 48 hour depending on the type work performed. Work days are no longer than eight hours in length, so all employees should have at most one day off per week.
Supplementary hours must be compensated according to the average rate earned during normal hours.
It is important to note that Uruguay has between eight and ten national holidays that fall on weekdays each year.
Employment law in Uruguay: Common contract types
In Uruguay, there are three main contract types that foreign investors and companies use.
- Indefinite employment contractsThese contracts are the most commonly used in Uruguay. They cannot be terminated unless the employer and employee come to an agreement, or if one party can unilaterally terminate the contract, such as when the employer or employee resigns.
- Fixed-term employment contractsThe contract stipulates a time limit. It can be any length, from days to weeks to months, but typically it would not exceed one-year.
- Specific task or project contracts — regarded as an “undetermined contact” — have no specific or clear date for when the task or project will be completed. This means that clear thresholds or makers must be established to eliminate any doubts regarding the project’s completion.
Vacations, leave, or other absences
Uruguay’s employment law provides that employees are entitled to 15 days vacation leave after they have served 12 months with the same employer. The leave must be used within the next 12 month.
An employee can get one more day of vacation per year after five years of service. For every four years of service, an additional day of seniority vacation is added to the employee’s allowance.
Leave for sick
Employers are obliged to pay an employee’s salary for the first two days of work missed due to illness, however it must be authorized by a registered doctor. The government social insurance fund will now cover the employees’ salary from the third day.
Maternity and paternity leave
Maternity leave allowance totals 13 weeks, and can begin between one and six weeks before the due date, with the remainder taken after the child’s birth. Paternity leave is 10 working days. Both cases are covered by the government’s social security fund.
Unter employment lawIn UruguayEmployees have three days of paid vacation when they get married. One day should coincide with the actual marriage, if it takes place on a normal workday. To be eligible for marriage leave, an employee must give at least 30 days notice and provide documentation of the marriage to be paid for the days that they are absent.
Employees have three days of bereavement time if a parent, child or spouse/civil partner dies. Legal documentation offering proof of the death must be presented within 30 days of that leave being taken, and failure to present such documentation will result in that leave being discounted from the employee’s annual allowance.
Take a study leave
Uruguayan employment law provides that employees are entitled to paid leave to take part in educational courses after six months of continuous service with the same employer. The amount of hours an employee works per week determines how much leave they are entitled to.
- Six days of annual leave for those who work less than 36 hours per week
- There are nine days of vacation per year for those who work more than 36 hours and less than 48 hours per semaine: nine days
- Working 48 hours per week, 12 days of vacation per year
This leave cannot be extended for more than three consecutive working days.
Leave for gynecological exams
Female employees are entitled one day of paid vacation per year for a gynecological/mammary examination. However, proof of the appointment must also be provided.
Employees have the right to one day of paid vacation per year for blood donation. They must show proof.
Uruguayan employment law: Statutory contributions
Uruguay’s employment law requires that the following deductions be made from salaries of employees and employer contributions:
Deductions for employeesThe average employee salary must be used to pay between 18.125%-23.125%.
Those are made up of a 15% deduction that goes towards the pension fund chosen by the employee, as well as a deduction of between 3% and 8% — based on salary level — that goes to the national health fund. A 0.125% deduction is taken to pay for the government labor training fund.
Notice that the minimum wage in Uruguay according to employment law was set at 10,000 Uruguayan Pesos (approximately US $331) in 2021.
Contributions from employers total at least 10.5% of an employee’s salary, with a contribution equal
to 7.5% of the salary going towards the employee’s pension fund.
A further contribution of between 3% and 8% — based on the employee’s salary — must also be made to the national health fund.
Accident insurance, which is based on the level and nature of the risk associated to the job, must be paid in full.
Biz Latin Hub is able to assist you in doing business in Uruguay
Biz Latin Hub has a multilingual team that can help you understand and fully apply Uruguayan employment law.
We offer customized packages of back-office services that are tailored to meet your specific needs. Our portfolio includes company formation, visa processing, accounting & taxation, legal services, hiring & PEO.
We also have teams in Uruguay and 15 markets in Latin America and the Caribbean. This means we can help you manage your taxes in multiple markets and provide support for entry into multi-jurisdictional markets.
Contact us todayLearn more about how we can help you do business in Uruguay
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Below is a snapshot of Uruguayan employment law: