Employment contracts in Peru: an employer’s guide

Hiring in Peru starts with a legal choice that many employers make by default: which contract to sign. In jurisdictions where employment can be ended at will, the contract type is mainly administrative. In Peru it is structural. It decides whether the relationship is permanent, what must be proven to end it, which filings are due and how the relationship will be judged if it is ever challenged.

This guide explains the whole contracting system for private-sector employers: the presumption of indefinite employment, the fixed-term contract types and their formalities, probation, part-time work, management and trusted positions, and the special rules for foreign employees. It is written for HR, finance and legal teams who design or approve hiring decisions.

Executive overview

• Indefinite employment is the rule. Where there is personal service, pay and subordination, the law presumes an indefinite-term contract.
• Fixed-term contracts are exceptions with conditions. They must fit one of nine statutory types, be written, state an objective cause and stay within the maximum terms.
• Formalities are not optional. Fixed-term, part-time and foreign-employee contracts must be in writing and filed with the labor authority.
• Errors convert contracts. A fixed-term contract that is extended in practice, exceeds its maximum or simulates a temporary need becomes indefinite — with the dismissal protection that implies.
• Probation is limited. Three months by default, longer only in writing and only for certain roles.

Legal framework

The core rules are in the consolidated text of Legislative Decree 728, the Productivity and Labor Competitiveness Law (Supreme Decree 003-97-TR), and its regulations (Supreme Decree 001-96-TR). Key provisions:

• Article 4: presumption of an indefinite contract; indefinite contracts may be verbal or written; fixed-term and part-time contracts must be written.
• Article 10: probationary period and its extension.
• Articles 53 to 83: fixed-term contracts (contratos sujetos a modalidad) — types, maximum terms, formalities, filing, conversion and compensation for early termination.
• Article 43: definitions of management and trusted personnel.

Foreign employees are governed additionally by Legislative Decree 689 and its regulations (Supreme Decree 014-92-TR). Remote work arrangements are governed by the Telework Law (Law 31572) and its regulations, amended in 2024 and 2026.

Across all of these, the primacy of reality applies: when the documents and the facts diverge, inspectors and courts follow the facts. The MTPE (Ministerio de Trabajo y Promoción del Empleo, the Ministry of Labor and Employment Promotion) receives contract filings through its online platform; SUNAFIL, the national labor inspection authority, checks compliance.

The indefinite contract

Why it is the default

Article 4 presumes that any personal, paid and subordinated service is an indefinite-term employment relationship. The three elements are personal service (the individual performs the work personally), remuneration, and subordination (the employer directs, supervises and can discipline). When all three exist, the relationship is employment, whatever the document is called.

This has two practical consequences. First, service agreements with individuals (locación de servicios) who in fact work under direction are reclassified as employment. Second, an employer that wants a fixed-term relationship bears the burden of meeting the statutory conditions for it.

What the indefinite contract should contain

Although it may be verbal, a written indefinite contract is the norm for well-managed employers. As a professional recommendation, it should record the position and duties, pay and its components (distinguishing remunerative from non-remunerative items), working time or the exemption from it, place of work and any telework, probation and any written extension, confidentiality and intellectual property, and, where applicable, the qualification of the position as management or trusted. For the elements and forms in more detail, see employment contracts in Peru: elements, forms and risk.

Fixed-term contracts

The nine types

The law allows fixed-term hiring when justified by market needs or increased production, or by the temporary or accidental nature of the service or work — never for work of a permanent nature. The MTPE groups the nine types into three categories:

Whatever the combination, successive fixed-term contracts with the same employee may not exceed five years in total.

The two most used — and most frequently challenged — types have their own briefings: fixed-term contracts for new or increased activity and fixed-term contracts for market needs. The overview of all types is in fixed-term employment contracts in Peru.

Formalities

Every fixed-term contract must:

1. be in writing, in three copies;
2. state its duration;
3. state the objective cause of the hire — the concrete fact that makes the need temporary, not a paraphrase of the statute; and
4. be filed with the labor authority, through the MTPE’s online system, within 15 calendar days of signature.

The objective cause is where most contracts fail. “To meet market needs” is not a cause; “to meet the increase in orders resulting from contract X with client Y for the period Z” is closer to one. The employer must also be able to prove, if challenged, that the cause existed and persisted.

Equal rights

Employees on fixed-term contracts have the same rights and benefits as indefinite employees. A fixed-term contract is not a lower-cost contract; it is a time-limited one.

When fixed-term contracts become indefinite

Under article 77, a fixed-term contract is treated as indefinite when:

• the employee keeps working after the term expires, or after the last renewal, or beyond the legal maximum;
• in a specific work or service contract, the employee keeps working after the work is completed without a new contract;
• in a substitution contract, the absent employee returns and the substitute keeps working; or
• there is simulation or fraud — for example, a stated temporary cause that does not exist, or a permanent role disguised as temporary.

The consequence is significant: once the contract is indefinite, ending it requires a just cause and procedure, and an unjustified termination exposes the employer to severance or, in some scenarios, reinstatement. See when fixed-term contracts become indefinite in Peru.

Terminating a valid fixed-term contract before its term without just cause entitles the employee to compensation of 1.5 monthly salaries for each month remaining, capped at 12 monthly salaries.

Probation

The probationary period is three months. Once it is passed, the employee acquires protection against arbitrary dismissal. It can be extended by written agreement to a total of:

• six months for qualified or trusted employees; and
• one year for management personnel.

The extension must be in writing and justified by the role; an unjustified excess has no effect. Probation is not counted when calculating severance for arbitrary dismissal.

Probation does not suspend all protection. Dismissals based on null grounds — such as discrimination, pregnancy or union activity — remain unlawful. Under Law 32431 (2025), a dismissal motivated by a cancer diagnosis, its treatment or its effects is null even during probation; Supreme Decree 008-2026-TR added a presumption in favor of the employee who had disclosed the diagnosis. Details in probationary periods in Peru.

Part-time contracts

A part-time contract in Peru is one with an average working day of fewer than four hours. It must be written and filed with the labor authority within 15 calendar days. Part-time employees receive gratificaciones and other general rights but do not accrue CTS (the severance fund deposited twice a year), statutory annual leave, or protection against arbitrary dismissal, all of which require at least four hours a day.

Because the threshold is an average, scheduling matters: an employee contracted “part-time” who regularly works four hours or more is, in reality, a full-time employee with full rights.

Management and trusted positions

Peruvian law recognizes two special categories:

• Management personnel (personal de dirección): those who represent the employer or replace it, with decision-making power.
• Trusted personnel (personal de confianza): those in personal and direct contact with the employer or management, with access to confidential information, or whose opinions contribute to decisions.

The qualification follows a procedure — identifying the positions, informing the employees in writing and recording the category in payroll and payslips — and must match reality. The consequences are real: management staff are excluded from maximum working hours, probation can be extended further, and constitutional case law admits the withdrawal of trust as a ground for ending the relationship only for employees who were hired directly into a trusted position.

Foreign employees

Hiring non-Peruvian employees adds a layer of rules under Legislative Decree 689:

• Caps: foreign employees may not exceed 20% of the workforce, and their pay may not exceed 30% of total payroll, subject to exemptions (for example, specialized professionals and technicians) and to categories treated as nationals (for example, foreigners with a Peruvian spouse, parent, child or sibling, or an immigrant visa).
• Form: a written, fixed-term contract of up to three years, renewable for equal periods, with a commitment to train Peruvian staff in the same occupation.
• Approval: filed with the labor authority through the MTPE’s online system and approved automatically on filing, subject to later review.
• Immigration: the employee may only start work after approval and with an immigration status that allows employment, such as worker resident (Residente Trabajador).

See hiring foreign employees in Peru for the full process.

Telework clauses

When the role will be performed remotely, in whole or in part, the Telework Law (Law 31572) requires the arrangement to be agreed in writing, and changes between on-site work and telework generally require agreement. The employer provides equipment and services or, if the employee uses his or her own, compensates the costs. Employees have a right to digital disconnection of at least 12 continuous hours in each 24-hour period. Amendments introduced by Law 32102 (2024) and Supreme Decree 009-2026-TR add rules that belong in the contract or the telework policy: confidentiality and information security clauses, reporting technical failures through the employer’s channels (documented outages cannot justify pay deductions), five business days’ notice before changing the usual place of telework, and verification of working conditions with at least 48 hours’ notice.

Obligations that start with the contract

Signing the contract triggers other duties that should be built into the same onboarding workflow:

• Electronic payroll registration: the employee must be registered in T-Registro, the employee registry of Peru’s electronic payroll, no later than the day work begins. Late registration is a very serious infringement.
• Vida Ley life insurance: mandatory from the first day of employment and paid by the employer, with registration of the policy in the MTPE’s online registry.
• Pension status: under the ongoing pension reform (Law 32123 and its regulations), employers should verify the new hire’s pension affiliation at onboarding.
• Health and safety: training at hiring and the pre-employment occupational medical examination required by Law 29783.
• Harassment prevention: training on sexual harassment prevention at the start of the relationship.

These are not contract clauses, but an inspector checking a hire will look at all of them together. A perfectly drafted contract signed for an employee who started work before registration still produces an infringement.

Documenting the objective cause over time

For fixed-term contracts, the objective cause is not a one-time drafting exercise. It must exist when the contract is signed and remain true for as long as the contract is renewed. As a professional recommendation, keep a short file for each fixed-term hiring program with the business facts that justify it — the new site’s opening date, the client contract that drives the demand peak, the absent employee being replaced — and review it at each renewal. If the facts have changed, the contract type should change too.

A contracting process that holds up

The following process, which we recommend as a professional standard, prevents most contract disputes:

1. Define the need: permanent or temporary? If temporary, what is the concrete fact that makes it so, and how long will it last?
2. Choose the type: indefinite by default; the fixed-term type that matches the documented cause; part-time only if the average will genuinely stay below four hours.
3. Classify the role: ordinary, trusted or management, and whether it is subject to maximum working hours.
4. Draft the contract: objective cause in concrete terms, duration, probation and any extension, pay components, working time, confidentiality.
5. Check foreign-employee rules where relevant: caps, form, approval and immigration status.
6. Sign before the start date and register the employee in T-Registro no later than day one.
7. File fixed-term and part-time contracts within 15 calendar days; file foreign-employee contracts before work starts.
8. Diary the end date and decide on renewal or termination before it arrives — never let the employee keep working after expiry by default.
9. Keep the evidence of the objective cause for the whole life of the contract.

What management should do

• Approve fixed-term hiring only with a written justification that would convince an inspector.
• Monitor the portfolio of fixed-term contracts: end dates, cumulative duration per employee, and whether the cause still exists.
• Treat recurring “temporary” roles as a signal that the need is permanent, and plan indefinite hiring accordingly.
• For regional headquarters: make sure global offer letters and templates are adapted to Peruvian contract types before use.

Frequent mistakes

• Generic objective causes that merely repeat the text of the law.
• Letting employees work past the end date while a renewal is “being signed”.
• Using fixed-term contracts as an extended probation.
• Chaining contracts beyond five years, sometimes through different group companies.
• Labeling roles as trusted or management without meeting the definitions or the procedure.
• Scheduling “part-time” staff for four hours or more.
• Starting foreign employees before contract approval and immigration status.

Where to go next in this cluster

Start with the basics of Peruvian employment contracts, then read the overview of fixed-term contracts. If you plan temporary hiring, the briefings on contracts for new or increased activity and contracts for market needs explain how to document the cause, and when fixed-term contracts become indefinite explains what happens when it fails. For onboarding, read probationary periods in Peru; for non-Peruvian staff, hiring foreign employees.

Our employment contract drafting service designs contract suites and reviews existing portfolios; foreign employees covers the labor side of international hires; and employment setup in Peru builds the full structure for new operations. To see where your current contracts stand, use the employment compliance check. For the full picture of operating in Peru, see employing in Peru, and for how contracts end, the guide to termination.

Key takeaways

Peruvian contract law rewards precision. Indefinite employment is the default; any departure from it must fit a statutory type, be written, be filed, and rest on a cause the employer can prove. Employers that treat each contract as a documented decision — rather than a template — keep the flexibility the law allows. Those that do not tend to discover, at the end of the contract, that they never had it.