Hiring in Uruguay

The terms set out role, salary in UYU, working time, the wage council category that fixes minimum pay and scheduled increases, and any restrictive covenants. The EOR is the counterparty to the employee, which is what removes the need for your own entity.

Spanish is the standard contract language, often with an English version alongside.

Fixed-term contracts must be in writing, and renewing one risks turning it into an indefinite contract, so most EORs default to indefinite terms.

Set probation from day one in the written contract. A trial period is not presumed, so without one, employment counts as indefinite from the start.

Monthly-paid staff accrue severance from their first day, so a valid probation is the main window to part ways without paying it. Ask how the EOR documents it before you agree a start date.

Overtime is paid at double the hourly rate on working days and 2.5 times on rest days and public holidays, capped at 8 extra hours a week.

Many senior hires sit outside the overtime regime, so overtime becomes a contractual matter rather than a statutory one. Put the position in writing either way.

The salario vacacional, a statutory holiday bonus equal to the net pay for the leave days, is easy to miss, so build it into the budget. Uruguay marks around 15 public holidays, but only five are paid days off by law.

Sickness benefit is paid by BPS at 70% from the fourth day, so the first three days are unpaid unless a collective agreement says otherwise. Maternity leave is 14 weeks paid by BPS, and paternity leave is 20 days with the first three paid by the employer, so confirm what the EOR tops up.

Dismissal for serious misconduct (notoria mala conducta) removes severance, but the bar is high. Protected employees cost more: dismissing a pregnant employee or new mother adds six months' pay, and dismissing within the protected period after a workplace accident triples the standard amount.

The EOR runs the process as the legal employer and will want the paperwork in order, including final pay, the proportional aguinaldo, unused leave and holiday bonus. Abusive dismissal claims exist, and proposals to add notice and a cause requirement have been tabled, so keep a documented reason.

The aguinaldo, a 13th salary paid in June and December, is mandatory, so plan for two extra cash calls a year.

FONASA already covers membership of a mutualista health provider, so private medical cover is a top-up rather than a necessity. EORs often bundle extras such as group life through a group scheme. Ask what is included in the fee and what is billed on top.

Employer contributions add 12.625% on top of gross salary, plus a risk-rated workplace accident premium with the state insurer BSE. That is before the EOR fee.

Joint liability is the trap. Under Uruguay's outsourcing laws, your company can be held jointly liable for wages and contributions the EOR fails to pay. Requesting proof of compliance, such as BPS and BSE certificates and payroll records, reduces that to subsidiary liability, so ask for them on a regular schedule.

Ask whether the EOR handles residence cases directly or refers them to a partner. Work is generally accepted once the residence application is filed, with the employee holding residence-in-process status, but the EOR must see proof before day one.

Assignments under 180 days can use a provisional identity sheet instead. Set start dates around the filing date, not the approval date.

Databases of personal data must be registered with the URCDP, the data protection regulator, so check that the EOR's employee records are registered. Get the data processing terms in the service agreement, not just the privacy notice. Transfers to countries without adequate protection need consent or contractual safeguards.

Ask where payroll data is hosted and who in the partner chain can see it.

An SAS can be incorporated online, often without a notary, but the running cost is the point: an accountant, monthly BPS and DGI filings, corporate tax returns, BSE cover and payroll software set an annual floor.

Permanent establishment risk is about what people do, not where payroll sits. Revenue-generating activity can create exposure regardless of the employment route.