Definitive Guide to Hiring in Venezuela

Hiring in Venezuela

Hiring employees compliantly in Venezuela means doing it yourself or using an Employer of Record like Global Expansion. You should be careful using independent contractor agreements in Venezuela so that you don’t run afoul of employment laws. To hire an employee compliantly and offer them mandatory benefits and compliant agreements, you can:

(a) Establish your own new legal entity, banking, accounting and payroll service in Venezuela; or

(b) use an Employer of Record like Global Expansion who can handle all of the details for you.

Labor Laws in Venezuela

Employee Probation Period

• The first 30 days of the employment relationship are deemed as a probation period

Annual Leave in Venezuela

• Workers are entitled to take 15 working days per year of paid vacation upon completion of one uninterrupted year of service, plus one additional working day for each subsequent year of service, up to a maximum of 15 additional working days

Holidays in Venezuela

Maternity Leave Venezuela

• Pregnant employees are entitled to take six weeks' leave before giving birth and 20 weeks' leave after giving birth (Article 336, New OLL).
• During this period, pregnant employees receive 66.66% of their monthly salary from social security

Paternity Leave Venezuela

• A father is entitled to paid paternity leave from the social security system of 14 continuous days from the date of birth (Article 339, New OLL).
• The father (regardless of marital status) cannot be dismissed for up to two years after the child's birth (Article 339, New OLL).

Sick Leave in Venezuela

• The employer must pay salary only for the first 3 days of sickness; after this period the employee will receive an indemnity from the social security in lieu of salary.

Working Hours in Venezuela

• In general, the maximum number of working hours without overtime pay for a day shift is 8 hours per day and 40 hours per week.
• The official work week is only 2 days for the public sector

Overtime in Venezuela

• Overtime must be paid with a surcharge of at least 50% over the normal salary value for the corresponding ordinary shift.
• An employer may not require its workers to work more than 10 hours’ overtime per week or more than 100 hours’ overtime per year.

Termination of Employment in Venezuela

• Employees may either be subject to so-called job stability (estabilidad), or protected by the bar against dismissal (inamovilidad), both of which significantly limit the scope for termination.
• Job Stability
  • Employees covered by the stability procedure might be dismissed with justified cause, but after the dismissal, the employer must file a "participation of dismissal" before a labor judge, explaining the facts and legal causes for the dismissal.
  • Legal cause might include, among others reasons: misconduct; defamation of the employer; lack of due care or negligence, affecting health and safety at work; unjustified absence during 3 working days in a month; material damage to working machines or tools, caused intentionally or by lack of due care; disclosure of professional or trade secrets; serious failure of employment obligations; or sexual or workplace harassment.
  • In general, all employees are protected by job stability, except upper-management employees.
• Bar against dismissal
  • Protected employees shall not be dismissed without justified cause and previous authorization of the Labor Inspector.
  • An employee is entitled to claim reinstatement and back pay when dismissed without authorization.
• There is no statutory notice period in Venezuela, this is usually something that is agreed upon in the employment contract.

Notice Period in Venezuela

• There is no statutory notice period in Venezuela, this is usually something that is agreed upon in the employment contract.

Severance in Venezuela

• Where termination is not attributable to the employees, they are entitled to an indemnity equivalent to the amount of seniority payments.

Venezuela Salary and Wages

13 /14th Month Salary in Venezuela

• Yes
• There is no statutory requirement to pay the13th or 14th month salary.
• However, in his bid to increase adoption of the country's crypto currency.
• Maduro, has promised half a Petro to workers and pensioners alike.
• The payment would be made as a Christmas bonus and it would be equivalent to $30.

• The social security system provides the following benefits:
  • Medical assistance for the worker and the worker’s spouse, parents and children
  • Indemnities for temporary disability and death
  • Pensions for disability, old age and dependent survivors
• Employers and employees are required to make social security contributions in accordance with the following table.

• Venezuela has entered into social security treaties with Chile, Ecuador, Greece, Italy, Portugal and Spain.
• Under the above treaties, nationals of the treaty countries who are working in Venezuela or Venezuelans who are working in the treaty countries may rely on the treaties to avoid double social taxation for the time period stated in the treaties.
• However, according to the Social Security Institute, the only treaty that is in effect for Certificates of Coverage is the Spain treaty.

Immigration Venezuela

• Under the Immigration Law, foreign citizens who intend to render services in Venezuela for more than 90 days must obtain a labor permit (authorization) and a labor visa (Working Transient Visa; known as “TR-L”).
• The company that intends to employ the foreign citizen requests the labor permit.
• If a foreign citizen will not be in Venezuela for more than 90 days, neither a labor permit nor a labor visa is required.
• To obtain a TR-L, the foreign citizen must have a passport that had been issued by the respective authority at least 6 months before the request for the TR-L, as well as an employment contract with a Venezuelan entity.
• The visa has a term of one year and may be renewed for an additional term of one year.
• The holder of the TR-L may make multiple entries into Venezuela or may stay in Venezuela for the entire period of the visa.
• To obtain a labor visa and work permit, the company must file an application with the Office of Migration and the Ministry of Labor, which will issue the labor visa and the labor permit respectively, within 15 business days following the request.
• In practice, the period for the issuance of the visa may be extended for an additional 15 days.
• Work visa
• To obtain a work visa, the following documents must be submitted to the Office of Migration (Dirección de Extranjería):
  • Proof of payments by the employer to the National Socialist Training Institute (Instituto Nacional de Capacitación y Educación Socialista, or INCES)
  • Proof of last three payments by the employer to the social security system
  • Copy of municipal license of the company
  • Copy of last income tax return of the company
  • Authorization letter
  • Justification letter (providing reasons for requesting labor visa)
  • Entry request form, issued by the Administrative Service Office for Identification, Immigration and Foreign Purposes (Servicio Administrativo de Identificación, Migración y Extranjeria, or SAIME)
  • Two wallet-sized photos of the foreign worker
  • Copy of the entire passport (including blank pages)
  • Notarized employment contract (original)
  • University or college or technical or associate degree, translated into Spanish if in another language, and legalized in the country of residence before the Venezuelan consulate, or annotated
  • Résumé, translated into Spanish if in another language, and legalized in the country of residence before the Venezuelan consulate, or annotated
• Work permit
• To obtain a work permit, the following documents must be filed with the Ministry of Labor:
  • Copy of the document of incorporation and bylaws of the contracting company
  • Copy of notarized employment contract
  • Employment declaration form and hours worked (this form is issued by the Ministry of Labor)
  • Justification letter (providing reasons for requesting labor permit)
  • Format of job offer issued by Ministry of Labor (original and two copies)
  • Information filed with the Labor Inspector Office (Inspectoría del Trabajo), including a copy of the Tax Identification Number (Registro Unico de Información Fiscal, or RIF) of the contracting company, company name, number of employees and workers and authorization letter

Value Added Tax (VAT) in Venezuela

• VAT is due on all goods and services supplied domestically or imported.
• Exports are exempted.
• Under Venezuela’s budget law, it must set its standard VAT rate between 16.5% and 8%.

Mandatory Benefits in Venezuela

• These are mandatory benefits as postulated by law
• These include probationary period, annual leave, public holidays, maternity leave, paternity leave, sick leave, overtime pay, notice period, severance pay, and 13th month pay
• Mandatory benefits also include social security benefits.

Payroll Accrual in Venezuela

Country Accruals Additional Information

Description

Foreigners who reside and work in Venezuela are subject to the mandatory Venezuelan Social Security. The Social Security Contribution is withheld from the monthly salary, based on a ceiling of VEF 887.537,2 per month (5 monthly minimum salaries, minimum salary was VEF 177.507,44 for December 2017), which currently vary several times a year.

Non-resident foreigners working under dependent relationship in Venezuela are likely to be subject to the social security withholdings. Social security benefits take the form of comprehensive assistance and monetary payments, under the provisions of the Social Law and its regulations. That Law covers social security protection for beneficiaries in cases of maternity, old age, survivorship, sickness, accident, disability, death, retirement, dismissal, and unemployment.

Payroll Accruals Additional Information

Accrued Benefits in Venezuela

Why use Global Expansion to hire in Venezuela

Establishing a branch office or subsidiary in Venezuela can be time-consuming, expensive and complex. With such a robust labor market in place, one must pay great attention to detail when structuring employment because Venezuela labor laws are complex.

The company also has a responsibility to comply with specific employment practices dictated by Venezuela law to maintain its good standing as an equal opportunity employer.

Global Expansion makes it easy for you to expand into Venezuela. We'll help you hire your candidate of choice, handle HR matters and payroll, and ensure that you comply with local laws without the burden of setting up a foreign branch office or subsidiary. In addition, you'll have complete control and direction over your employees.

We enable you to stay in control of everything. Our Venezuela Global Professional Employer Organization (PEO) and Employer of Record (EOR) solution provides you with peace of mind to focus on running your company and the security to enter new markets.