Employment audit in Peru

Most employment exposure in Peru is not the result of a single bad decision. It builds up quietly: a fixed-term contract renewed without a valid reason, an allowance that should have been included in the benefit base, overtime that was worked but never recorded. Nobody notices until an inspector, a departing employee or a buyer’s lawyers do. An employment audit is the way to find those issues first.

The business problem

Foreign groups often manage their Peruvian entity through a mix of local staff, an external payroll provider and occasional advice. Each part may work reasonably well on its own, but nobody is looking at the whole. Meanwhile SUNAFIL, Peru’s national labor inspection authority, can review any aspect of the employment relationship, and the facts recorded by an inspector are presumed true unless the company proves otherwise.

Fines are set per infringement, graded by severity and by the number of employees affected, and expressed in UIT (Peru’s tax reference unit, S/ 5,500 in 2026). Back pay for miscalculated benefits, reclassified contracts or unpaid overtime is often a larger number than the fine itself. Our note on how an employment audit works walks through the method in more detail.

How we approach it

We begin by agreeing a scope that matches the company’s concerns and budget of time: the whole workforce or a sample, all topics or a selection. We then review contracts, payroll records, benefit calculations, attendance records, occupational safety documentation, internal policies and statutory registrations, and we interview the people who operate them. The aim is to see how the entity actually works, not only what its documents say.

Each finding is recorded with the rule involved, the facts observed, its likely classification under the inspection regulations and an indication of exposure. We do not inflate findings to justify the exercise; minor formal issues are labelled as such. Where sizing a liability requires judgment, we explain the assumptions, in line with the approach described in our note on identifying employment liabilities.

What the engagement includes, and its limits

The engagement produces a findings matrix, a bilingual executive summary, a remediation plan and, where needed, corrected templates. On request we return after the remediation period to check what has been fixed.

An audit is not an inspection defense, an accounting opinion or an actuarial valuation. We rely on the documents and information provided; if records are missing, we say so rather than assume. We do not certify compliance, and the report does not guarantee that an authority will reach the same view.

Coordination with the parent company, finance and payroll

The findings that matter most to finance are those that change the pay base or create a liability for past periods. We flag them separately so the controller can decide whether to provision, and we work with the payroll provider to understand how each concept was processed before concluding that it was wrong. Remediation that involves payroll corrections is planned with them so that recalculations, payments and filings happen in the right order.

For groups that want the audit to become a permanent control rather than a one-off exercise, the natural next step is an employment compliance program. The wider framework is set out in our guide to employment compliance in Peru.

Getting started

We usually start with a short scoping call and a first document request. From there the timetable depends on the size of the entity and how quickly records can be gathered, and we agree it with the regional team before work begins.