When and how must vacation pay be provided in Peru?
Under Peruvian labor law, vacation pay is mandatory and must be paid before the employee begins their vacation leave. Horizons ensures this requirement is met in full compliance with the Law on Paid Leave (Law No. 713).
Amount and Basis of Calculation
Vacation pay is equal to the regular monthly remuneration the employee would receive if they were working during the leave period. According to Article 15 of the law:
“La remuneración vacacional es equivalente a la que el trabajador hubiera percibido habitualmente en caso de continuar laborando.”
(Vacation pay is equivalent to the pay the employee would have received if they had continued working.)
This includes fixed components such as base salary and any regular payments the employee normally receives.
Timing of Payment
Vacation pay must be paid in advance of the vacation start date, as stipulated in Article 16:
“La remuneración vacacional será abonada al trabajador antes del inicio del descanso.”
(Vacation pay must be paid to the employee before the start of the leave.)
In practice:
If the leave is requested with sufficient notice, the amount can be included in the regular payroll prior to the leave.
If the leave is requested on short notice, the vacation pay may be processed as a separate off-cycle payroll, depending on timing and operational feasibility.
Horizons will coordinate the appropriate processing method based on the circumstances and internal payroll schedules.
Leave Request Notice Period
The law does not specify a minimum advance notice period for vacation requests. Therefore, the timing is typically agreed upon between the employee and employer. Horizons recommends requesting vacation leave with enough lead time to ensure payroll compliance and operational continuity.
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