Venezuela is a South American country with an economy that is predominantly dependent on the oil and manufacturing sectors. Petroleum products account for 98% of the country’s exports and the combined value of exports and imports equal 54% of its GDP. Non-oil export-based industries include aluminum, steel, apparel, beverages, transport equipment, foodstuffs, paper, cement, tire, fertilizer and car assembling. Despite political differences with the Western bloc, Venezuela is still a significant trading partner of the US.
Currency: Bolívar Soberano
Principal Language: Spanish
Government: Federal Constitutional Socialist Republic
Capital City: Caracas
Other Major Cities: Maracaibo, Barquisimeto, Valencia, Ciudad Guayana, San Cristobal
A written employment contract is required. It must contain the following information: name, age, nationality, legal status, and identity card number of the parties involved; description of services rendered; employment start date; working hours; type of contract; duration; workplace; the wage stipulated.
Probationary periods are not expressly stated by law. However, it is possible to dismiss an employee without justification during their initial 30 days of service, and this period is considered to be an unofficial probationary period.
Work hours are subject to the following limits:
- daytime employees (5 a.m. to 7 p.m.) are limited to 8 hours daily or 40 hours weekly;
- night time employees (7 p.m. to 5 a.m.) are limited to 7 hours daily and 35 hours weekly;
- mixed positions (with fewer than 4 hours of night work) are limited to 7 hours daily and 35 hours weekly.
Work hours for employees that work in shifts are limited to 42 hours per week. An employee will receive an extra day of paid vacation if they work 6 days in a week. Employees working nights (7 p.m. to 5 a.m.) receive an additional 30% of the hourly normal workday wage.
Management employees and some other types who perform intermittent or discontinuous tasks are limited to 11 hours per day and are entitled to 2 days of rest per week, and work hours must average 40 hours per week over an 8-week period.
In order for employees to have 2 full days of rest each week, the workday may be extended to 9 hours, subject to a maximum of 44 hours per week. If an employee's workplace is 30 kilometers or more from the nearest town, the employer is required to provide free round-trip transportation to the employees. Half the duration of the journey should be treated as working hours.
Under the Venezuelan Labor Law (Ley Orgánica del Trabajo, los Trabajadores y las Trabajadoras, abbreviated as LOTTT), overtime work can be performed only by previous authorization.
Overtime is payable at a surcharge of at least 50% over the normal salary value for the corresponding usual shift. An employer may not mandate its workers to work longer than 10 hours overtime per week or more than 100 hours of overtime per year.
The Labor Law establishes Sunday as a weekly day of rest. When an employee must work on a holiday or rest day, they are entitled to remuneration corresponding with those days and an additional 50% over their normal daily salary. In addition, the following are paid holidays:
- Jan. 1: New Year's Day
- Monday and Tuesday of Carnival (the 2 days before Ash Wednesday)
- Easter Thursday and Friday
- May 1: Labor Day (Venezuela)
- Dec. 24: Christmas Eve
- Dec. 25: Christmas
- Dec. 31: New Year's Eve.
Dates listed in the Law of National Holidays also include April 1; June 24; July 5; July 24; and Oct. 12. Additional holidays may be declared by the national government, the states or municipalities.
Employees get 15 working days of paid vacation up to completion of 1 continuous year of service, and 1 additional working day for every subsequent year in service, but not more than 30 working days per annum.
Furthermore, employees are entitled, during vacation, to an additional vacation bonus that is equal to 15 days of salary, plus an extra day's salary for every subsequent continuous year but restricted to 30 days of salary per annum.
The employer needs to pay salary only for the first 3 days of sickness; as after this period, the social security gives an indemnity to the employee in lieu of salary.
Maternity/Paternity Leave and Pay
Pregnant women are granted maternity leave of 6 weeks before childbirth and 20 weeks thereafter. In case the pre-natal leave is not fully used, the balance portion gets added to the post-natal leave. If a female employee adopts a child of age less than 3 years, she gets a maternity leave of 26 weeks. The employer is not required to pay the employee in these periods of leave, nonetheless, some employers do so up to some extent as determined by their internal policies, and the social security authorities grant an indemnity to the employee.
The child's father (or any male employee interested in adoption or family placement of a child younger than 3 years) is granted a paternity leave of 14 days, which is extended by another 14 days in case the child is seriously ill or the mother's health is facing serious health complications.
In cases of multiple births, paternity leave lasts for 21 days, and if the child's mother dies, paternity leave is granted for 12 weeks. The social security system pays for these periods of leave. Female employees are entitled to nurse for up to 2 years after the child's birth. They get a 90-minute break twice a day for that purpose.
Female employees who adopt children younger than 3 years of age are entitled to 26 weeks' adoption leave effective the date the child is placed. Women also are entitled to compensation for the maintenance of both parent and child.
Pension & Social Security
Venezuela's social security system provides old age, disability and survivor's benefits to all workers. Employers contribute the equivalent of 15 days' salary per quarter (between 9 and 11% of the payroll), while insured persons contribute an average of 4% of covered earnings. These contributions also finance workers' compensation benefits, and employer contributions also fund sickness and maternity benefits and the marriage grant.
The maximum monthly earnings for the purpose of contribution and benefit are 10 times the minimum wage. The government contributes at least 1.5% of total covered earnings to offset administrative costs.
Old-age Pensions: Employees who have made at least 750 weeks of contributions are entitled to an old-age pension at age 60 (for men) or age 55 (for women). Individuals who work in unhealthy or arduous occupations may be entitled to a pension at a lower age. Retirement is not necessary to receive a pension.
Old-age Grant: If an employee does not meet the requirements for the pension but has made a minimum 100 weeks of contributions in the last 4 years, the employee is entitled to a grant equal to 10% of total covered earnings.
Disability Pension: A disability pension is paid for the permanent or prolonged loss of more than 66.6% of working capacity with at least 250 weeks of contributions (decreased by 20 contributions per year the insured is younger than 35 years), including 100 weeks in the last 3 years before the start of disability. No qualifying period applies for a disability caused by an accident. A partial disability pension is paid for an assessed degree of disability between 25% and 66.6%.
Disability Grant: A grant is paid for the permanent or prolonged loss of more than 66.6% of working capacity with at least 100 weeks of contributions. The disability grant is equal to a lump sum of 10% of the insured's earnings.
Survivor Pension: A survivor's pension is payable when the insured satisfied the qualifying conditions or was a pensioner at the time of death. There is no qualifying period if the cause of death is an accident.
Survivor Grant: A survivor's grant is paid when the insured did not satisfy the qualifying period for a pension but had a minimum of 100 weeks of contributions during the previous 4 years. The survivor grant is 10% of the deceased's total covered earnings.
Marriage Grant: A marriage grant is provided to workers covered by the social insurance system if the worker has made 100 weekly contributions in the 3 years before marriage.
Medical Benefits: Free medical care coverage extends to employees in the public and private sectors and their dependents. Benefits include general and specialist medical care, medications, hospitalization, laboratory services, dental care, maternity care, appliances, and transportation.
Venezuela's social insurance program covers Workers' compensation. The employer contributes between 0.75% and 10%, depending on the assessed degree of risk. There is no minimum qualifying period. Workers' medical benefits include free general and specialist care, hospitalization, medicines, laboratory services, appliances, and rehabilitation services.
Temporary Disability Benefits: The benefit is equal to 100% of the insured's earnings and is paid after a three-day waiting period until the insured person is rehabilitated, recovered or certified with a permanent disability. A constant-attendance supplement of up to 50% of the benefit is paid if the insured requires the constant attendance of others to perform daily functions.
Permanent Disability Benefits: The benefit is equal to 100% of the insured's earnings. If the insured has a disability greater than 66%, is unable to continue the same job and is subsequently rehabilitated and rejoins the workforce, the pension is reduced according to the percentage of the reassessed degree of disability. A constant attendance supplement of up to 50% is also available. For a permanent disability of greater than 25% but less than 67%, a percentage of the full pension is paid according to the degree of disability. A lump sum of 3 times the insured's earnings multiplied by the degree of disability is paid for a permanent disability of 5% to 25%.
How GPS can Help
With our Global PEO/Employer of Record services, companies can expand into Venezuela and hire their employees without having to establish a branch office or subsidiary in Venezuela.
- Your candidate is hired via our Venezuela PEO. If needed, we can also help you find the right talent in any country with our comprehensive global staffing services
- Your new employee begins work quickly as we take care of employment contracts, statutory and non-statutory benefits, and running their payroll – all in full compliance with the Venezuela laws
- Global PEO Services experts manage all day-to-day operational issues, such as employee expenses, and severance/termination if required.
- No contractor risks, pass on the compliance burden to Global PEO Services.
Spin Off/M&A Support
- Ensure continuity of payroll, benefits and HR support when acquiring or spinning off a business with employees overseas.
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With our Global PEO, you get access to our proprietary Mihi SaaS solution for time and attendance, vacation, leave management and benefits enrollment and management. Mihi enables clients to have easy access to employee data in real time. It is designed specifically for companies with a global workforce, especially when working in multiple countries with low headcount.
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When ready, we can seamlessly transition you from the PEO/EOR model to your own legal entity and provide ongoing international HR, finance, legal, compliance and staffing support. Learn more about our end-to-end international expansion services here.