Paraguay Labor Law and Employment Policy Overview

Employment Law Overview

• Key Laws and Regulations:
  • Labor Code (Código del Trabajo)
  • Social Security Law (Ley de Seguridad Social)
  • Occupational Accident Insurance Law (Ley de Seguros de Accidentes del Trabajo)
• Legal Characteristics:
  • Aims to protect employee rights and promote job stability
  • Establishes minimum wages, working hours, vacations, and social security benefits

Employment Contract Requirements

• Contract Types:
  • Fixed-term contracts
  • Indefinite-term contracts
• Contractual Provisions:
  • Must include job description, remuneration, working hours, benefits, etc.
• Language and Currency:
  • Contracts must be in Spanish and Paraguayan Guaraní (PYG)

Working Time Regulations

• Standard Working Hours:
  • 48 hours per week, 8 hours per day
• Rest Days and Breaks:
  • Minimum of 24 hours of rest per week
  • Minimum of 1 hour of rest per day

Vacation Policy

• Annual Leave:
  • 1-5 years of service: 12 days
  • 5-10 years of service: 18 days
  • 10+ years of service: 30 days
• Public Holidays:
  • 12 national public holidays
• Special Leaves:
  • Sick Leave: Paid sick leave for up to 26 weeks
  • Maternity Leave: 18 weeks of fully paid maternity leave
  • Paternity Leave: 2 weeks of paid paternity leave

Employee Dismissal and Termination

• Notice Period:
  • 1 day
• Severance Pay:
  • 15 days of regular salary for each year of service, up to a maximum of 50% of annual salary
• Unfair Dismissal Protection:
  • Employers cannot dismiss employees with over 10 years of service without just cause

Taxation

• Personal Income Tax:

  • Salary Range	Tax Rate
    0 - 30,000	0%
    30,000 - 45,000	10%

• Social Security Contributions:

  • Employee: 9%
  • Employer: 16.5%

Health Insurance

• Insurance Policy:
  • Employees must participate in the public healthcare system
• Coverage:
  • Basic medical services

Compensation and Benefits

• Minimum Wage:
  • 2,298,324 PYG/month
• Compensation Structure:
  • Base salary, bonuses, allowances

Work Permits and Visas

• Permit Requirements:
  • Foreigners require work permits
• Application Process:
  • Apply through the Paraguayan Immigration Department

Confidentiality and Non-Compete Clauses

• Enforceability:
  • Confidentiality and non-compete clauses are enforceable in Paraguay
• Common Provisions:
  • Restrict employees from using or disclosing confidential information after leaving employment
  • Restrict employees from working for competitors after leaving employment

Training and Development

• Legal Requirements:
  • Employers must provide safety training and skills development training to employees
• Government Support:
  • Government provides training subsidies and programs

Workplace Diversity and Inclusion

• Legal Requirements:
  • Prohibits discrimination based on race, gender, religion, or other protected characteristics
• Enforcement Measures:
  • Government agencies responsible for enforcing anti-discrimination laws

Remote Work Policy

• Legal Framework:
  • No specific legal framework for remote work in Paraguay
• Tax and Insurance Implications:
  • Remote work may impact tax and social security obligations

Authoritative Website Addresses

• Paraguayan Ministry of Labor: https://www.mtess.gov.py/