Hire in Uruguay

It is advisable to include the following clauses in employment contracts: (i) salary specifics, (ii) employment benefits, (iii) working hours, (iv) work location, (v) confidentiality agreements, (vi) intellectual property rights, (vii) ethical obligations, (viii) non-competition, (ix) non-recruitment, (x) safeguards against labor or sexual harassment and (xi) personal data protection, among others.

Fixed-term employment contracts in Uruguay are valid for the duration specified, up to a year. Contracts for specific tasks or projects, known as “undetermined contracts,” require clear milestones to avoid ambiguity about completion. While there is no specific law governing fixed-term contracts, collective agreements allow them only for short-term, objective reasons. This is generally capped at a duration at six months with one possible renewal, totaling a maximum of 12 months.

In Uruguay, probation periods are generally up to three months.

In Uruguay, the standard workweek is 44 hours, with an eight-hour workday, though industrial sector employees may work up to 48 hours over six days. Rest periods include a one to 2.5 hour intermediate break, adjustable by agreement. There is also a weekly rest of 24 hours for industrial work and 36 hours for commercial activities.

Any work exceeding the standard 44 hours per week is considered overtime and is governed by the employment contract or collective agreements. Typically, overtime is capped at 8 hours per week and is paid at 200% of the standard salary rate. For work done on non-working days, such as holidays, compensation is at 250% of the employee’s regular earnings.

Employees receive a 13th-month salary payment, called Aguinaldo, which is divided into two parts. One is paid in June and the other in December.

Fixed-term contracts can be terminated for business, personal reasons or employee misconduct, requiring notice and a written explanation. Misconduct terminations must include a warning and an opportunity for the employee to respond. All terminated employees are entitled to a notice and severance payment. Termination without just cause allows for notice at any time and also requires a severance payment.

In Uruguay, the usual notice period is 1.5 weeks for both employees and employers.

Severance pay is calculated as one month’s salary for each year of service, up to a maximum of six months’ salary.

In Uruguay, non-competition clauses in employment contracts are generally accepted if clearly defined. Violations can lead to dismissal and loss of severance pay. After employment ends, their validity depends on specific contract terms. Non-solicitation clauses are common, with fines often imposed in service contracts if clients hire former employees. Such fines are rare in employment contracts due to compensation requirements.

The Personal Data Regulatory and Control Unit serves as Uruguay’s data protection authority. It enforces laws designed to safeguard individual privacy, setting out a range of rules for managing personal data. These regulations apply to both public and private entities.

In Uruguay, the standard payroll cycle is monthly, and employers are required to pay employees by the 5th of the month following the pay period.

Employers must provide and deliver a payment receipt to employees whenever wages or other payments are made. The employee must sign the receipt, which the company will keep as part of its labor records. Electronic payslips are also permitted.

Employers must keep salary payment receipts as part of their labor records.

In Uruguay, employees generally earn 20 working days of annual leave after completing a year of service. This can increase by one day for every four years of service, up to a maximum of 25 days. Only vacation periods of 10 days or more can be paid out. Shorter periods must be accumulated to reach at least 10 days before payment is made.

Employees in Uruguay are entitled to up to one year of sick leave. The employer covers 100% of the salary for the first three days of sick leave. However, employer has the option not to pay for these initial days and simply record the absences. After the first three days, the Banco de Previsión Social (BPS) compensates the employee with 70% of their average salary. A medical certificate is required to justify the sick leave.

In Uruguay, female employees are granted 14 weeks of maternity leave: six weeks before the expected delivery date and eight weeks after childbirth. Compensation for this leave is provided by Banco de Previsión Social (BPS), Uruguay’s social security system.

Fathers and parents are eligible for 13 days of paid paternity leave.

Employees are entitled to three days of paid marriage leave. At least one of these days should coincide with the wedding if it falls on a workday. To qualify, employees must give 30 days’ notice and provide documentary proof of the marriage.

Employees are entitled to three days of paid bereavement leave for the death of a parent, child, spouse/civil partner or sibling. They must provide legal documentation of the death within 30 days of taking the leave.

Study leave – After six months with the same employer, employees can take paid study leave based on their weekly hours: six days for under 36 hours, nine days for 36 to 48 hours and 12 days for 48 hours. The leave cannot exceed three consecutive days at a time.

Gynecological Examination Leave – Female employees are entitled to one day of paid leave per year for a gynecological and/or mammary examination, provided they present proof of the appointment.

Blood Donation Leave – Employees get one day of paid leave each year for blood donation, with proof required.