I. MINIMUM WAGE.
The minimum wage is set by the government (currently approximately US$40 per month) and is adjusted regularly in line with inflation. Normally, salaries are determined by companies in internal or private labor agreements. However, in some Groups of Activities, wages and other benefits are still determined through collective bargaining negotiations between the Unions and the Employers’ Associations, where the Government takes part and issues its own decrees. This type of negotiations were common prior to 1991, when the Executive Branch left this issue in the hands of private agreements.
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II. LIMITATION OF WORKING HOURS.
A) Working Hours.
In general terms, the working day may not exceed eight hours of work with a limit of 48 hours per week in the industrial sector, and 44 hours per week in commerce. This limitation of 44 hours per week is also established for office work for all kinds of work activities, including in industry. However, as indicated in this section, such limitations and overtime regulations do not apply to managers and senior personnel in general.
B) Overtime.
They are regulated by Law N115.996 and Decree 11/980.
Overtime is considered to be the hours that exceed the limit of the schedule applied to each employee.
The limitation of daily working hours is set at 8 hours (Law 5,530, dated 11/17/915 for Industry, and Law 8,797, dated 10/22/31, for Commercial Companies and Articles 19 and 35 of the Decree dated 10/29/57).
The limitation may be contained in an agreement made between the parties whereby the daily time limit is less than 8 hours (e.g. 6 hours).
By way of example, they are not included within the limitation of working hours:
a) B Senior personnel of industrial, commercial and service establishments;
b) B university and highly specialized professionals who, in their capacity as such, perform tasks in industrial, commercial and service establishments;
c) B Travelers and market salesmen, brokers, collectors and collection inspectors who perform their duties outside the establishment.
Overtime shall not be considered overtime if it exceeds the duration of the work schedule due to the distribution of the work hours of one day in the remaining days of the week, and the extension of the workday in such days shall not exceed one hour per day.
Since only actual work is counted, if the half-hour break (continuous work) is included, the working day will be 9 hours and 30 minutes, except in the case of Construction and Textiles, which will be 9 hours and 36 minutes.
There are other exceptional cases in which overtime does not apply. These are those performed by teams or successive teams; distribution of working hours over a period longer than one week; in the event of an accident of serious danger or accident due to urgent work.
Overtime shall not exceed eight hours per week, and shall be paid at 100% overtime over the regular hourly rate. Special authorization is required to exceed the eight-hour limit.
In the event that overtime is performed during working hours that fall within the night shift, the 100% overtime pay is calculated on the value of the hour plus compensation for night work. (See No.1D)
C) WORK ON DAYS OFF.
Overtime arising in the event of working during the weekly rest day is paid at an extra 150% over the value of the hour in the workday.
Overtime remuneration may not be compensated with rest.
D) NIGHT WORK.
1.- In our legislation there is no legal norm that establishes, in a perceptive way, in a general way, an improved remuneration for night work.
There are legal regulations that prohibit night work, such as Article 231 of the Children’s Code, which prohibits night work by minors under 18 years of age, except in the case of domestic employees. Night work is defined as work performed between 21:00hs. and 6:00 a.m.
Similarly, Law No. 111,577 (on working conditions in unhealthy industries) prohibits night work for minors under 21 years of age (Art. 14) and for adults, limits night work to 30 hours, the maximum working hours per week, for workers who perform night work, establishing that the salary will be equivalent to that received by the worker for 48 hours of work per week. Night work is defined as work performed between 10:00 p.m. and 6:00 a.m. the following day.
3.- Night work is regulated in several collective bargaining agreements, corresponding to different activity groups, which normally establish a 20% increase in night work hours.
Night work is generally considered to exist between 10:00 p.m. and 6:00 a.m. the following day.
There may be workers who work part of their shift during the day and part at night. In this case, the remuneration for night work is applied exclusively to the hours performed for night work.
III.- HOLIDAYS.
Holidays are classified into common and paid holidays.
The effect of a common holiday on remuneration depends on whether the employee performs his or her duties on a daily or monthly basis.
In the case of daily workers, if the worker works on holidays, he/she will receive the normal daily wage, otherwise he/she will receive nothing.
The monthly worker, if working on holidays, will not receive more than 1/30th of the remuneration, but will also receive his normal salary. In the event that he does not work during such holidays, he shall receive the same salary without any discount for such holiday.
In the case of paid holidays, the law not only declares them as holidays, but also imposes on the employer the obligation to pay the salary that would have corresponded if they had been worked. This has appreciable consequences for day workers, since on such holidays the law confers on them the right to be paid the day’s wages even if they have not worked.
In case of working on a paid holiday, the law establishes that the worker must receive double remuneration. The worker per day will receive 1/30 more than the monthly salary.
There are five paid holidays per year: January 1, May 1, July 18, August 25 and December 25. Extraordinarily, they are added on March 1 when the new government takes office after the elections. The remaining holidays are common.
In addition to the national holidays, there are other special holidays for some activities.
IV.- LICENSES.
The annual leave regime is regulated by Laws 12.290, dated 12/23/58; 13.556, dated 10/26/66; Decree-Law 14.328, dated 12/19/74; and Decrees dated 4/26/62 and 7/23/66.
A) Annual Paid Leave: – A) Annual Paid Leave: – A) Annual Paid Leave: – A) Annual Paid Leave
All workers hired by individuals or private companies of any nature, including domestic service and rural workers are entitled to an annual paid leave period of 20 days.
Annual leave lasts twenty consecutive days and does not include holidays or Sundays.
The twenty-day period must be successive; however, this may be changed by collective bargaining agreements or arrangements and may be divided into two periods of ten days, which must also be successive. Calculations should be made on a calendar year basis.
In addition, by means of an agreement between the parties, it may be established that holidays are counted as part of the leave.
For example, if the leave is on Monday and Tuesday of Carnival Week, since these days are considered holidays, they will not be counted as leave days. An agreement between the parties must be signed in order to be considered.
In the case of per diem workers, since common holidays are not paid for them, if they are granted leave that includes the two carnival days, they will not receive the wages corresponding to those days.
With respect to the number of days of leave corresponding to each employee, the law establishes that after the fifth year of employment, the employee will be entitled to one additional day of leave for every four years of seniority in the company. For example, if an employee has eight years of seniority in the company, he/she is entitled to two extra days of leave, but if he/she has four years of seniority, he/she will not be entitled to the extra day of leave, but will acquire such right as of the fifth year.
In the case of part-time workers, the rules established for eight-hour workers apply.
The leave must be taken in the year immediately following the year in which the entitlement arose. It is not necessary to obtain formal legal notice. In general there should be a verbal contract with the employee regarding the leave period, but the common practice is for the employer to use its right to organize work needs and establish when leave should be taken. However, in the event of a claim, it may be submitted to the labor authorities.
It is a non-waivable right and the Law declares null and void any agreement that implies the abandonment of the right to remuneration in money, as well as the accumulation that is also not admitted in any case. As an exception, compensatory rest days may be granted.
B) Vacation Salary.
All workers in the private sector and public entities other than the State will receive from their employers an amount for the better enjoyment of their leave (vacation salary), equivalent to 100% of the net salary or wage of the leave, including rural workers and domestic service. (Law N116.101, dated 10/11/89 B Decree dated 22/12/89).
As its name says, since it is specifically an amount for the better enjoyment of the leave, such amount must be paid prior to the leave in proportion to the corresponding days.
V.- MATERNITY LEAVE.
All private sector workers who are mothers will interrupt their work activity six weeks before the presumed date of delivery and will resume work six weeks after delivery.
During this period, the employer will not pay the worker’s salary, but the Family Allowance Welfare Agency will be in charge of paying an allowance which amount will include the 13th installment of the salary, leave and vacation salary for the protection period. This does not constitute an additional payment, but is a substitute payment made by the Social Security System and is equivalent to the net salary plus the prorated remuneration B to be generated in said period B of these other ordinary benefits.
In the event of any type of illness arising from pregnancy, additional prenatal leave may be provided. Similarly, if any illness is caused by childbirth, postpartum leave may be extended.
These possible extensions shall not exceed six months, in their totality, not including the basic leave period. In the event that the inactivity originates from an illness acquired outside the twelve basic months of maternity leave, the maternity allowance shall be paid as long as they are mothers who are not entitled to the benefits granted by the Sickness Insurance and the same shall be equivalent to the amount paid in common sick leave.
Annual leave that has not been taken may also be added to maternity leave.
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VI.- OTHER SPECIAL LICENSES.
In our legislation there is no general law that contemplates other types of leaves such as: paternity, marriage, death and other similar causes.
The different collective bargaining agreements by activity groups include agreements that establish this type of leave.
VII.- SICK LEAVE.
Common illnesses are one of the causes of interruption of the employment contract, for which the services rendered and the payment of salary are suspended without this implying the termination of the contract.
To be entitled to the sickness benefit paid by the Banco de Previsión Social (financed by contributions from employers and workers), the worker must have contributed 75 days’ wages (workers per day) or three months’ wages (workers per month) in the twelve months immediately preceding the date on which the illness was reported.
The sickness benefit shall be 70% of the basic salary or wage corresponding to the category, excluding the amounts for transportation, per diems, authorizations, overtime, overtime and special retributions.
This subsidy will be paid by the Banco de Previsión Social (DISSE) and will be collected by the worker from the fourth day of absence caused by the illness, with a maximum term of one year, which may be extended for one more year with the resolution of the Insurance Board of Directors (Arts. 14, 15 and 16 of Decree Law No. 114,407).
If at the end of this period the worker is still unable to perform his work, a procedure is established for him to obtain a pension. At that time the contract will be terminated.
In case of hospitalization of the employee, the benefit will be collected from the day the employee is admitted to the hospital, even if such hospitalization takes place within the first three days of absence due to illness, and will not constitute a period of loss of the benefit.
The maximum monthly subsidy will be three times the amount of the National Minimum Wage. If 70% of the beneficiary’s regular salary is higher than this amount, he/she will not receive a subsidy for 70% of the salary but the equivalent of three national minimum wages.
The period of absence due to illness shall be computed as if the employee had actually worked for the application of the provisions of the Labor Regulations. If leave and vacation salary are generated during such period, the International Agreement N1132 expressly provides that absences not attributable to the employee shall be counted as part of the period of services, so that absence due to illness shall generate leave and vacation salary as if the employee had worked.
The sickness benefit is financed through an employer’s contribution, which currently amounts to 5% of the total remuneration received by the worker, and an employee’s contribution of 3% of the total remuneration.
VIII.- OCCUPATIONAL ACCIDENTS.
1) In Uruguay Private Insurers cannot cover occupational accidents and occupational diseases. This insurance area is assigned to the Banco de Seguros del Estado.
Any injury resulting from a sudden and frequently violent external cause caused by work shall be considered an occupational accident and is regulated by Law N116.074 dated 01/17/90.
The following persons are bound by the legal regime established in this respect: all employers, which means all persons of a public, private or mixed nature who use the labor of another person, regardless of their number.
In the event that an employee has an accident, the employer is obliged to report the accident directly to the Banco de Seguros del Estado within 72 hours if it happens in Montevideo and within five days if it happens in the interior of the country at the branches of the Departments.
The worker, the victim of the accident, or their representatives, must also report the accident within fifteen days if it occurred in Montevideo, or within thirty days if it occurred in the interior of the country.
The classification as an accident at work or not, corresponds to the insurance company and not to the employer.
The Insurance Bank shall provide medical assistance and shall pay the corresponding indemnity, even if the employer has not complied with the insurance obligations, regardless of the fact that the Bank may sue the employer for such cause.
2) Payment of Insurance.
Work accident insurance is not included in the Social Security Contributions. This insurance payment must be made separately, and its cost depends on the activities of each worker.
3) Different situations.
a) B Temporary Compensation.
In the event that the accident temporarily deprives the employee of his ability to perform his work, a so-called temporary indemnity shall be payable from the fourth day of absence caused by the accident until his complete recovery under the following terms:
1) B He shall be entitled to a daily indemnity calculated on 2/3 of the daily wage or monthly salary at the time of the accident. Compensation will be paid on a daily basis and will be paid for holidays.
2) B If the injured person works irregularly or in parts, the indemnity shall be 2/3 of the daily wage resulting from dividing by one hundred and fifty the total amount of wages received during the previous six months. If six months have not elapsed from the injured worker’s entry to the date of the accident, the average of the six months will be taken into account but referring to similar workers in the same company, or if this is not possible, in another company with the same activity.
b) B Permanent Compensation.
The permanent disability may be total or partial.
1) B If the permanent disability does not reach 10% of the reduction of the professional capacity, you will not be entitled to any type of compensation.
2) B In the event that the permanent disability is equal to or greater than 10% and not greater than 20%, at the request of the victim and with the prior approval of the Bank, the injured party shall receive a single payment, equivalent to 36 times the monthly reduction in salary or wages caused by the disability.
3) B If the disability exceeds 20%, an annuity must be paid equal to the reduction that has originated in the wage or salary. If the injured person, given the extent of the injury, cannot subsist without the permanent assistance of another person, the annuity will be increased to 115% of the salary or wages.
c) B Fatal Accident.
In the event that a worker loses his life in a work accident, the person who succeeds him in his rights shall be entitled to:
1) B A perpetual annuity equal to 50% of the annual salary or annual remuneration, for the spouse who is not divorced or separated in fact, or to the cohabitant who genuinely demonstrates living together for a period of more than one year at the date of death.
If the surviving spouse or cohabitant is the only person receiving the annuity, the percentage shall be 2/3 of the annual salary or annual remuneration.
2) B Minors under 18 and up to that age and disabled elderly persons who were living on the worker’s remuneration, provided that this factor is genuinely proven, will receive an annuity of 20% of the annual salary if there is no more than one and 35% if there are two, 45% if there are 3 and 55% if there are four or more.
3) B If there is no surviving spouse or cohabitant, the annuity for minors or disabled persons shall be 50% of the annual salary, for each of them, and in no case shall it exceed 100% of the annual salary with the maximum limit established in general.
4) B In the event that the surviving spouse or cohabitant does not claim, the ancestor of the injured person shall be entitled to the annuity, provided that he/she has lived at the expense of the deceased, and such annuity shall be equal to 20% of the annual salary.
The Insurance Bank shall adjust at least once a year the permanent disability or death annuity in accordance with the average wage index established by the General Directorate of Statistics and Census.
Such annuities shall be paid monthly and may not be assigned, pledged or waived. However, the permanent disability annuity may be used as collateral for loans from banks.
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IX.- CHRISTMAS BONUS (SUPPLEMENTARY ANNUAL SALARY)
This annuity is also called AAguinaldo@. It is a kind of Christmas bonus payment or 13th. Salary and is regulated by Law No. 12,840 of 12/22/960.
Article No. 2 establishes this payment for all workers without exceptions, which must be paid before December 1. Equivalent to 1/12 (one twelfth) of the total amount collected during the year.
In addition, this law defines salary as the total annuity arising from the employment relationship.
By resolution dated December 27, 1989 of the Ministry of Labor and Social Security, profit sharing, Christmas bonus and vacation salary are exempt from the definition of salary.
Decree Law No. 14,525 of May 27, 1976 establishes that the Christmas bonus must be paid in two installments: the first half in June and the second half in December.
X.- INTERNAL WORK REGULATIONS
It is not mandatory that there be an Internal Regulation, nor is there any legal form that requires it to be approved by the competent authority (Ministry of Labor and Social Security).
Internal Regulations should be understood as the set of provisions that regulate work within the company: starting and finishing times, details of the obligations of each employee, the procedure for notification in case of absence, notification in case of illness, leaves of absence, permission to leave during working hours, disciplinary regime, etc.
In cases where the Labor Regulations originate from an agreement between the Company and the Employees’ Organization, it will acquire the character of a complementary norm to the Collective Labor Agreement, and will have in this case the same nature of a collective agreement, being a formal source of Labor Legislation, since it is formally a Collective Labor Agreement and, therefore, it is mandatory to register it before the Department of Labor and Social Security (law N116.170, of December 28, 1990).
The situation is different if the regulation comes from the unilateral will of the Company – In this case the binding nature of the provisions will be conditioned to their adaptation to the legal provisions in force, as well as to the Collective Labor Agreements in force in that area of activity.
XI.- EMPLOYMENT CONTRACT. RESCISSION
Leaving aside some forms of termination of the employment contract such as resignation of the employee, mutual consent between the parties, we will refer specifically to the termination of the employment relationship for unilateral cause of the employer: Ael despido@. When it is terminated by decision of the company and this termination has not been previously established by contractual terms, the employee is entitled to receive an indemnity, in general terms equivalent to one month per year or fraction of the work period, up to a maximum of six salaries. Strictly speaking, this calculation varies depending on the different types of workers and in some cases the law excludes the rights for some of them: seasonal, seasonal, term, temporary, etc. workers.
A) Common dismissal
In order to simplify this complex subject, we will distinguish between employment contracts with a fixed term for termination and those without a fixed term.
1.- Labor Contract with Fixed Term or Duration.
Termination of the contractual term. This is the normal way of terminating the contractual employment relationship that has a fixed duration or term, which is equivalent to saying that the contract ends on the date foreseen or stipulated by both parties.
In the same situation is the contract with a fixed duration, but with an uncertain term, such as the contract for a specific work, typical in the construction industry. In this case the contract will be considered terminated when the tasks for which the employee has been hired are completed.
In these cases, the termination of the employment relationship does not generate any right to the collection by the employee of the Severance Payment, with the exception of an early termination of this contract by the employee, in which case the employee may be ordered to pay compensation plus damages equivalent to the remainder of the term period.
2.- Labor Contract without termination term.
Unlike the aforementioned situations, when the employment relationship has no stipulated term, we find ourselves in the natural scope of severance pay.
The provisions that regulate dismissal are the following laws: 10.489 (trade employees); 10.542 (day laborers and industrial employees); 10.570 and 12.597 (day laborers or day laborers on a daily or hourly basis or on a permanent basis).
The notice of dismissal shall not be subject to a prior notice with a certain time limit and shall not be subject to any special formality.
The employer is not required to contribute to the Aun fondo para despidos@, and the employer is solely responsible for the payment of the severance payment, from which he may only be exempted in the case of duly proven gross misconduct of the employee.
In the case of workers with monthly remuneration, the amount of the indemnity is equivalent to the total remuneration corresponding to one month’s salary for each year or fraction thereof of activity with a limit of a maximum of six monthly payments.
In order to pay the dismissal, the last nominal salary is taken into account, increased by the part of the Christmas Bonus, the Vacation Salary and the Leave of Absence generated in that month. He does not have any type of pension discount.
In the case of workers with a daily wage, workers are entitled to receive 25 daily wages for each year worked if during the year they completed 240 days of work, with a maximum limit of six years, which is equivalent to saying that they are entitled to receive a maximum of 150 daily wages.
The salary of the last day worked is taken into account without any pension deductions.
In the case of Brokers, Traveling Salesmen and Salesmen, the common provisions of the common employee shall apply with one particularity: when they have maintained or contributed to increase the value of the business, they shall be entitled to an indemnity for the customers, equivalent to 25% of the indemnity corresponding to them for the dismissal, in addition to the common indemnity.
3) Trial Employment Contract.
In all employment contracts, employees may be hired on a probationary basis and will not generate any right to severance pay if, after the end of the probationary period, they are not considered as effective employees.
It is common practice to set the probationary period at a period not exceeding three months or ninety working days.
B) Special Dismissals
- Maternity Dismissal.
It is regulated by Law N111.577 and the Decree of 01/06/54.
In these cases the dismissed worker is entitled to receive the indemnity provided by the common system, plus a special indemnity corresponding to six months’ salary.
The Law does not speak about the notorious misconduct exemption.
This labor protection is extended for a reasonable period of time (normally considered by judges to be a period of about six months) after which the working mother is reinstated in her job under the same conditions. Rarely is such indemnity exempted when the employer’s decision to terminate the contract is based on causes unrelated to the pregnant worker or her recent condition as a mother.
2 Dismissal of Sick Worker.
Companies will not be able to dismiss or suspend a worker who misses work due to illness if he/she complies with the requirements established by law and will be obliged to reintegrate the worker to his/her activities once he/she is discharged from the hospital by DISSE.
The employee is obliged to report to the company twenty-four hours after being discharged from the hospital and may not be dismissed before 30 days after his return to work.
In the event of dismissal under these circumstances, the indemnity will be double the normal indemnity, except in the case of notorious misconduct or when the dismissal is not directly or indirectly related to the illness.
3) Dismissal due to Occupational Accident and Illness.
The worker victim of the work accident or occupational disease must be readmitted once his recovery has been proven in the same office where he was and must appear before the company within fifteen days from the date he was discharged from the hospital.
Once reinstated, the employee theoretically may not be dismissed until at least one hundred and eighty days have elapsed since his or her recovery, except in the case of gross misconduct or serious supervening cause.
If the company does not reinstate the employee, the employee, within a period of fifteen days after his or her appearance, shall be entitled to indemnification equivalent to three times the amount established in the Labor Laws in force.
XII.- HEALTH INSURANCE.
Sickness Insurance is regulated by Decree Law No. 15,180 of August 20, 1981 and Executive Decree No. 14/982 of January 19, 1982.
Decree Law No. 15,180 establishes a system of social services to cover the risk of forced unemployment of employees belonging to the private sector who provide services to third parties.
To be eligible for strike pay, the worker or employee must be registered on the company’s payroll for a period of at least six months.
Those receiving retirement benefits who are unemployed, have been terminated or suspended for reasons of conduct or who receive other forms of income are exempt from this type of insurance.
If monthly workers are laid off or suspended, they will receive severance pay insurance for at least six months. After this period, if the suspended employee is not returned to work, he/she will be considered effectively dismissed and may claim the corresponding indemnity.
The amount of this allowance is equal to 50% of the average monthly nominal remuneration received six months before the unemployment occurred.
If the worker is married or has a disabled family member under the age of twenty-one, he/she will receive a supplement of 20% of the corresponding subsidy.
In no case may the annuity exceed the equivalent of eight national minimum wages.
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XIII.- TERMINATION OF LABOR RIGHTS
Law No. 16,906, art. 29, dated January 7, 1998, regulates the statute of limitations for statutory labor rights, for a double term:
a) An employee may sue the company within one year after the termination.
b) The maximum extent of this claim is all types of labor rights for the last two years before the lawsuit was validly and formally filed.
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