Venezuela PEO & Employer of Record

WeHG provides an International PEO and vglobal Employer of Record service in Venezuela to companies wishing to join the Venezuela market or hire local/expat employees in this country.

Traditional approach requires establishing a subsidiary in Venezuela.  Meanwhile, our solution allows you to start the operations in Venezuela within days hence save time and money.  WeHG would hire candidates on your behalf while you maintain full operational control of their work. So legally they would be our employees, on our local payroll, 100% compliant but will work on your behalf. .

Venezuela fast facts

Population, million: 29 million
Land area, sq. km: 916,445  km²
Capital: Caracas
Local currency: Venezuelan bolívar (VES)

GDP per capita:$ 10000.00
GDP in currency:$ 250 billion
Economic growth percentage: -10%
Inflation rate (consumer prices): 6.5%
Volume of export: $ 720 million
Import of goods and services: $ 5.7 billion
Total population: 29 million
Population of working age (15-64): 53.69%

Venezuela is located in the northern part of South America. To the north it borders the Caribbean Sea, to the south Brazil, to the east the Atlantic Ocean and Guyana, and to the west Colombia. The total area of the country is 916,445 square km (353,841 square miles), and has an estimated population of over 29 million. The capital city is Caracas, which is located in the north-central part of the country. Caracas has a population of approximately five million. Other major cities in Venezuela are Maracaibo, Valencia, Maracay, Barquisimeto, Puerto La Cruz, Maturin and Puerto Ordaz.

Hiring, Negotiating and Doing Business in Venezuela

Necessity of written employment contract

A written employment contract is not required, except for fixed-term and fixed-work agreements and when Venezuelan nationals are hired to provide services abroad. When it is proved that there is an employment relationship and there is no written contract, all statements made by the employee are presumed to be true. This presumption is rebuttable with contrary evidence.

Implied terms

Mandatory statutory labour benefits are implied into the employment contract. They include:

• Minimum monthly salary.
• Certain other payments, such as seniority benefit, vacation payments and vacation bonuses, profit sharing payments and termination payments.

Collective agreements

Collective agreements are common:

• In industries such as oil, chemical/pharmaceutical and construction.
• When the employer is a company with a large number of employees.

Venezuela Employment Contract

Types of employment agreements

The general rule under the Labour Law is that employment agreements must be of an undefined or open-ended term. Fixed-term employment agreements are the exception and are only deemed valid if they are executed based on the strict grounds set forth in the Labour Law. It is only possible to execute an employment agreement for a fixed term when:

1. it is required by the nature of the service;
2. it is required provisionally and legally to substitute one employee for another;
3. it is required for Venezuelan employees rendering services abroad; and
4. an employee has not finished the task for which he or she was hired and the services are still needed.

Therefore, fixed-term employment agreements must establish the specific cause for entering into the agreement.

The Labour Law limits the term of a fixed-term employment agreement to one year and states that it will be deemed an undefined-term employment agreement when two or more extensions are executed within three months of its expiry, unless there are special reasons that justify the extensions, excluding the intent of continuing the labour relationship. A special reason is defined as the continuation of the circumstance that justified the original fixed-term agreement.

Venezuela working hours

Working hours are regulated as follows:

• Day shift. Employees must not work more than eight hours per day or 40 hours per week .
• Night shift. Employees must not work more than seven hours a night or 35 hours per week .
• Mixed shift. Employees must not work more than 7.5 working hours during any one shift, or 37.5 hours per week.

Venezuela Overtime

Overtime is paid at a rate of 150% of the normal pay.

Vacation leave in Venezuela

All employees are entitled to take 15 working days of paid vacation after one year’s uninterrupted service. This is increased by one day a year for each subsequent uninterrupted year, up to a maximum of 15 additional working days.

Sick leave

Employees can take up to 1 year of sick leave.  The employer is obligated to pay the first 3 days of sick pay.  After that, it is the responsibility of social security to pay the employee. The employee must provide a medical certificate within 48 hours.

Venezuela Maternity Leave

Maternity leave

Pregnant employees are entitled to take six weeks’ leave before giving birth and 20 weeks’ leave after giving birth. During this period, pregnant employees receive 66.66% of their monthly salary from social security. In any case, the amount cannot exceed five times the minimum salary. Employers can also pay employees, and then deduct the payment from the social security bill.

For nine months after giving birth, mothers are entitled to two 30-minute breaks per day to breastfeed their children in the workplace’s nursery. If there is no nursery, the breaks are one hour each. The breastfeeding period is extended to 12 months in one of the following circumstances:

• The employer does not have a nursery or offer an initial education service.
• It is a multiple birth.
• The mother or child suffers from some specific health conditions.

These breaks must be paid by the employer.

The mother cannot be dismissed until two years after the child’s birth.

Paternity rights

A father is entitled to paid paternity leave from the social security system of 14 continuous days from the date of birth.

The father (regardless of marital status) cannot be dismissed for up to two years after the child’s birth.

The employee is entitled to receive payment of his salary from social security. Employers can also pay employees, and then deduct the payment from the social security bill.

Venezuela Severance Laws

Termination Process

In Venezuela, the majority of employee contracts are subject to what is referred to as ‘employment stability.’ Under employment stability, employees can only be terminated for just cause.

The employer must notify the labor courts within 5 days after dismissal and include justification for the termination.

Notice Period

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

Severance Pay

Employees are entitled to what is called ‘seniority benefit’ which is equal to 30 days’ pay for every year employed.

Probation Period

In Venezuela, probation period is not outlined in the labor laws.  However, it is possible to terminate an employee without cause in the first 30 days of employment.

Venezuela Tax

Employer Payroll Tax

9%-11% depending on risk – Social Security

2% – Unemployment

2% – Housing Loan Regime

2% – Employee training contribution (INCES)

0.75% – 10% – Workplace prevention, conditions, and environment contribution (LOPCYMAT)

15.75% – 27% – Total Employment Cost

Employee Payroll Taxes

4.00% – Social Security

0.50% – Unemployment Insurance

1.00% – Housing Loan Regime

0.50% – Employee training contribution (INCES)

6% – Total Employee Cost

Employee Income Tax

6%- 34% – Range of income tax

Health Insurance Benefits in Venezuela

Additional Benefits in Venezuela

On top of standard pay for vacation days, employees also receive vacation bonuses. The employer pays workers 15 days of wages for their first year and adds an additional day for every year of service. At maximum, employees earn 30 days of wages as a yearly bonus.

The Workers’ Food Law describes a required benefit. Under this jurisdiction, employers must provide one balanced meal for their employees every day. This practice can involve an in-house cook, or it can be a sum of money for buying lunch.

Venezuela Holidays

• New Years Day
• Carnival, Monday and Tuesday
• Anniversary of the Beginning of the Independence movement
• Maundy Thursday
• Good Friday
• Labor Day
• Feast of St. John the Baptist
• Independence Day
• Birth of Simón Bolívar
• Day of Indigenous Resistance
• Christmas Eve
• Christmas Day
• December 30th
• New Year’s Eve

Why Choose WeHireGlobally

WeHG takes care of all the onboarding hurdles, payroll, compensation and benefits, tax filing, and termination of employment. Our Employer of Record solution allows you to manage your overseas teams efficiently while minimizing cost and risk.