Updated on: 2025/08/04 14:03 (UTC)
Overview
In Uruguay, there is no single employment law or code. The rules governing employment are found in various legislative and regulatory instruments, including the constitution, international treaties and conventions, and statutes and regulations. Judicial opinions are very important in the development of Uruguayan employment law.
Hiring
Employment Contracts
There is no requirement that employer and employee enter into an employment agreement, although the practice has become more common in recent years.
Employment contracts are private agreements between employer and employee and do not need to be registered with the Ministry of Employment. These agreements are, however, subject to Uruguayan law, international norms including International Labor Organization conventions and collective bargaining agreements. An employment contract, which may be written or oral, is presumed to be indefinite unless it contains an express stipulation as to a fixed term.
It is common practice in Uruguay for a worker to be employed for a trial period prior to entering into an employment agreement. The trial period must not exceed three months and should be agreed to in writing.
During the trial period, the employment relationship may be terminated by either party without cause and without liability for severance pay. After the successful completion of the trial period, there is automatic conversion to an employment agreement.
Telework. On Aug. 10, 2021, Uruguay implemented a telework law that aims to promote and regulate telework in the country. Telework is voluntary, so employers must gain employees’ prior consent, in writing. Teleworking employees enjoy the same rights as face-to-face workers, including the right to privacy and safety and to disconnect from work outside of normal working hours. Employers must bear the costs that employees incur when working from home.
Restrictions on Hiring
Employment of workers under 18 years of age must be approved by the Child and Adolescent Institute of Uruguay, which takes into account the nature of the job, parental approval and the minor’s medical and academic records in reaching a decision.
There are prohibitions against minors working at night and under other circumstances, many included in international agreements to which Uruguay is a signatory.
Recordkeeping
Employers must obtain and maintain a Book of Labor Registration (Libro de Registro Laboral). Employers must apply for the book at the local Ministry of Labor and Social Security office by the 10th day after the initiation of activities. Employers must record workers hours and schedule in the book and must obtain the signatures of inspectors of the Ministry of Labor and Social Security upon inspection. Once the book has been filled, it must be renewed. Filled books must be kept for two years.
Other employment documents generally should be kept for five years.
Background Checks
Employees cannot be forced to undergo medical examinations.
Criminal record checks can be requested from the Ministry of Internal Affairs and from police authorities.
Noncompetition Agreements
An employee and an employer may enter into a noncompetition agreement. In order to be valid, the agreement must be executed at the time of engagement or termination of employment, be expressly agreed to and written in Spanish and provide for compensation for the employee’s agreement not to compete. Noncompetition agreements are unenforceable if they are unreasonable in geographical scope, time or subject matter.
Reference Citations
Employment Contracts: Procedural Provisions
Immigration and Work Permits
In General
To work in Uruguay, foreign workers must obtain a residence permit, temporary or permanent, from the National Migration Office.
Visas and Work Permits
Residency is granted without major requirements: proof of good behavior in the country of previous residence, a certificate of good health and a certificate of means of subsistence. Temporary residence permits are valid for two years and renewable. The process for obtaining permanent residence generally takes 12 to 18 months. After obtaining a residence permit, the employee must apply for an identity card, renewable every three years.
Penalties
Violations of the rules governing foreign workers in Uruguay carry penalties of 100 to 150 pesos, double these amounts for repeat offenses.
Reference Citations
Visas and Work Permits: Embassy of Uruguay
Nondiscrimination
In General
Employers may not discriminate on the basis of race, color, religion, national or ethnic origin, disability, appearance, gender, or sexual orientation or identity.
Article 7 of the constitution prohibits discrimination that interferes with an individual’s right to be protected in the enjoyment of life, honor, liberty, security, work and ownership. Article 53 guarantees the right to apply intellectual and physical energy to generate income through economic activity. Article 8 requires that no distinction be made between individuals except based on talents or virtues.
In compliance with Article 55, legislation regulates the impartial and equitable distribution of work, stating clearly that discrimination based on race, religion, gender or disability is prohibited. Any distinction, exclusion, restriction, preference or moral or physical violence based on race, color of skin, religion, national or ethnic origin, disability, appearance, gender or sexual orientation or identity that interferes with the equal enjoyment or exercise of human rights and civil liberties in the political, economic, social, cultural or other sphere of public life is prohibited. In addition, the Law on Immunity of Association prohibits anti-union discrimination.
While there is an implicit prohibition against age discrimination in the constitution, it is not unusual to see advertisements for employment positions excluding applications from certain age categories.
Gender Discrimination
Any discrimination in employment based on gender is prohibited, and the law requires that men and women receive equal pay for equal work that is performed within the same establishment. Discrimination with respect to remuneration targeted at promoting equality of treatment and opportunity for both sexes in situations where there exists an inherent inequality may be permitted by the law in specific circumstances.
Law 16.045 prohibits discrimination on the basis of pregnancy or breast-feeding and provides maternity leave, lactation breaks and employment protection.
Sexual harassment in the public and private sectors is prohibited under laws that impose disciplinary or corrective measures. Law 18.561 sets general guidelines for the prevention of harassment and the protection of the victims.
Disability Discrimination
All employers with 25 or more employees must have four percent of their workforce represented by workers with disabilities.
Reference Citations
Nondiscrimination: Constitution of Uruguay, art. 7-8, 53-55; Law on Trade Union Rights, 2006, No. 17,940 art. 1 (Spanish)
Gender Discrimination: Law on Equal Treatment and Opportunities for Both Sexes in Labor Activity, 1989, No. 16,045 (Spanish); Sexual Harassment Law, 2009, No. 18,561 (Spanish)
Employee Privacy
Employee Data
Consent generally is required when collecting information about employees except when the data is:
- obtained from public sources;
- obtained by public bodies to comply with legal obligations;
- limited to domicile, telephone number, ID number, nationality, tax number, and corporation name;
- obtained based on a contractual or professional relationship; or
- obtained by individuals or corporations for their personal and exclusive use.
Personal data cannot be transferred to countries which do not provide adequate levels of protection. However, international transfer to unsafe countries or entities is allowed when the employee consents to the transfer.
Employee Monitoring and Surveillance
Uruguayan Law does not address employee monitoring and surveillance.
Reference Citations
Employee Data: Law on the Protection of Personal Data, 2008, No. 18,331, arts. 9, 23 (Spanish)
Compensation
Hours of Work
Employees working in the commercial sector or in the commercial areas of the industrial sector are limited to working 44 hours per week. Employees in the industrial sector may work 48 hours per week.
The working day of both industrial and commercial workers is limited to eight hours with a daily rest period that ensures that industrial workers do not work more than five consecutive hours and commercial workers no more than four consecutive hours.
The rest period for industrial workers varies between 30 minutes and two hours, the rest period for commercial workers between 30 minutes and 2 1 / 2 hours depending on whether the break is compensated. In both cases, when the break is uncompensated the two or 2 1 / 2 hour rest period may be reduced to one hour with the written agreement of the employer and the employee.
A weekly rest period of 36 hours is mandatory in the commercial sector. Generally speaking, this is taken from 1:00 p.m. on Saturday through all day Sunday. An employer and an employee can agree to other days of rest, provided their duration is still 36 consecutive hours.
A weekly rest period of 24 consecutive hours is mandatory in the industrial sector and is generally taken on Sundays after six days of work.
Minimum Wage
Effective Jan. 1, 2024, the standard national minimum wage is 22,628 pesos, up from 21,106 pesos.
In Uruguay, employees’ minimum salaries and other benefits are determined by a remuneration committee/wage council made up of representatives of government, business and labor.
Overtime
Overtime hours are those that exceed the statutory or contractually agreed limit for the activity or employment category. Overtime hours on normal working days are paid at double the hourly rate usually paid to the employee. Overtime worked on days that—pursuant to statute, convention, agreement or custom—constitute bank holidays or weekly rest days are paid at two and a half times the normal hourly rate.
Employees must agree to overtime and can generally work no more than eight hours’ overtime during a single week. Following consultation with employers and employee representatives, the labor ministry can raise this cap either temporarily or permanently. The employer must record all overtime worked.
Wage Payment
Salary may be based on time worked (monthly, daily or hourly), production/completion of a given task or project (e.g., commissions, piecework, incentive-based payment) or a hybrid including a base salary and a commission based on sales or production.
Uruguayan law requires wages to be paid on a weekly basis, biweekly, or on a monthly basis. Salaries paid on a monthly basis must be paid within the first five business days and never later than the 10th day of the following month. Salaries paid on a biweekly basis must be paid within five days of the end of the pay period, salaries paid on a weekly basis at the end of the week. Employers must provide all employees with payment slips after each payroll.
Salaries can be paid in Uruguayan pesos or in foreign currency.
Mandatory Bonuses
Employees are entitled to a statutory annual bonus equal to one-twelfth of total compensation paid during the 12 months ending Dec. 1. Payment of the bonus must be made in two installments, one covering the six months from December to June and paid before June 30, the other the six months from July to November and paid within 10 days prior to December 24.
Terminated employees are generally entitled to a pro rata share of their bonus based on time worked, although dismissal for misconduct may result in loss of the entire bonus.
Reference Citations
Hours of Work: Law on Weekly Breaks, 1988, No. 7,318 (Spanish)
Minimum Wage: Law on Minimum Wage, 1943, No. 10,449, arts. 1-4 (Spanish)
Overtime: Law on Overtime, No. 15,966, arts. 1-5 (Spanish)
Wage Payment: Constitution of Uruguay, art. 54; Law on Wages, 1974, No. 14,159, arts. 1-4 (Spanish)
Mandatory Bonuses: Law on Complementary Annual Salary, 1960, No. 12,840, arts. 1-5 (Spanish)
Benefits
Vacation
Employees are entitled to a minimum annual paid vacation of 20 consecutive days, although under a collective bargaining agreement the annual leave may be divided into two periods of not less than 10 days. Employees with more than five years of service are entitled to one additional vacation day for every five full years of service. Payment for annual leave must be made before the leave begins.
If an employee works for part of the year only, vacation entitlement is calculated pro rata for the months worked. Public holidays or Sundays cannot be considered in the calculation of the leave period.
The right to vacation may not be waived and employees may not be given additional wages in lieu of vacation except where specifically provided by law (e.g., technicians may in exceptional cases accept three times their salaries in lieu of vacation leave).
Holidays
The following five paid public holidays are observed in Uruguay:
- Jan. 1: New Year’s Day
- May 1: Labor Day
- July 18: Constitution Day
- Aug. 25: Independence Day
- Dec. 25: Christmas Day
Work performed on mandatory public holidays must be compensated at two and a half times normal wages.
According to Uruguayan Law, public holidays are observed under the following scheme:
- if the public holiday falls on a Saturday, Sunday or Monday it will be observed on those days;
- if it occurs on Tuesday or Wednesday, it will be observed on the Monday immediately preceding;
- if it occur on Thursday or Friday, it will be observed on the Monday immediately following.
Maternity Leave
Pregnant workers have the right not to work during the six weeks preceding and the eight weeks following childbirth and to receive medical assistance and a stipend representing wages, yearend bonuses and vacation pay plus vacation bonus. In the event of birth before the expected date, postpartum leave is extended to reach the full leave entitlement of 14 weeks. If birth is later than expected, the full eight weeks of postnatal leave is still available to the mother. If the mother suffers a pregnancy- or childbirth-related illness, leave can also be extended. The mother can also choose to take the entire 14 weeks of leave after the child is born.
Payments to the employee during maternity leave are made by the social security institute—Banco de Previsión Social (BPS)—not the employer.
Paternity Leave
Male employees of newborns are entitled to 10 days of maternity leave.
Sick Leave
From the fourth day of absence for illness (or from the date of hospitalization), employees may claim a social security benefit of 70 percent of salary for a period of up to one year, which may be extended for an additional year. To be eligible for salary replacement, an employee must have made social security contributions for at least 75 days or three months within the 12 months prior to the date of illness, although employees are entitled to medical, surgical and pharmaceutical benefits from the first day of work.
An employee on sick leave cannot be dismissed during the period of eligibility for health care benefits or during the following 30 days, except for cause or for another reason unrelated to the illness. If an employer violates this prohibition, the employee is entitled to double his or her usual compensation.
Other Leave
Newborn care. This benefit allows the mother or the father (but only one of them at a time, in alternation if desired) to work part time for the first six months following maternity or paternity leave to take care of the newborn child. This benefit may be used in installments.
Study leave. Employees with more than six months’ tenure in a company undertaking studies at an educational institution approved by the Ministry of Education and Culture are entitled to the following leave per calendar year:
- up to 36 hours worked per week: six days minimum,
- more than 36 hours but less than 48 hours: nine days minimum and
- more than 48 hours: 12 days minimum.
Leave may be granted in three-day periods.
Marriage leave. Employees are entitled to three days’ matrimonial leave, one the date of the wedding, if they have provided the employer with at least 30 days’ prior notice.
Bereavement leave. Employees are entitled to three working days’ leave following the death of a father, mother, spouse, adopted child, adopting parent, partner, common-law spouse or sibling.
Blood donation leave. Employees who donate blood are entitled to one day’s leave.
Prevention of genital/mammary cancers. Women are entitled to one day’s leave for examination.
Adoption leave. Employees who adopt one or more under-aged children are entitled to six continuous weeks of leave (42 days).
Pensions and Social Security
The legal retirement age is 60 with at least 30 years of contributions to the social security system. Women are credited with one year of contributions for each biological or adopted child up to five years. Additional years of contributions are credited to workers in hazardous occupations. The pension may be deferred if the insured has at least 35 years of contributions.
Affiliation with the social security system is mandatory except for foreign workers rendering services in the Free Zones. Certain foreign workers may opt out of the Uruguay social security system by way of international treaties. The social security administration (BPS) is responsible for the social security system, collects all contributions from companies and their employees and maintains an up-to-date employment history for each worker. The social security system provides pension, unemployment, sickness and maternity/paternity benefits.
The pension system covers disability, old age and retirement.
Workers’ Compensation
Employers are required to insure workers against accidents occurring in the workplace or during travel to and from work, as well as for work-related illness, and may only do so through the BSE (Banco de Seguros del Estado), the Uruguayan National Insurance bank, which will pay for the employee’s medical care and pay the employee an allowance during unemployment.
Employers in Montevideo are required to inform the BSE of a work-related accident within 72 hours, other employers within five days. Failure to comply can result in an employer fine of 50 pesos, 100 pesos for a repeat violation.
Reference Citations
Vacation: Annual Leave Act, No. 12,590 of 1958, arts. 1-5, 15, 25 (Spanish)
Holidays: Annual Leave Act, No. 12,590 of 1958, art. 18 (Spanish); Law on National Holidays, 1996, No. 16,805, art. 1
Maternity Leave: Law on Family Allocations, 1980, No. 15,084, arts. 2, 12-14 (Spanish); Modification of Maternity Subsidy and Settlement of Subsidy for Paternity, 2013, No. 19,161, arts. 2, 8 (Spanish)
Paternity Leave: Modification of Maternity Subsidy and Settlement of Subsidy for Paternity, No. 19,161, art. 8 (Spanish)
Sick Leave: Annual Leave Act, No. 12,590 of 1958, art. 8 (Spanish)
Workers’ Compensation: Law on Work Accident Insurance, 1990, No. 16,074, art. 1 (Spanish)
Labor Relations
In General
Employees have the right to organize into trade unions and to bargain collectively.
Right to Organize
Article 57 of the constitution guarantees the right of employees to organize into trade unions, and Law 17,940 bans discrimination against union members in employment. The right to collective bargaining is guaranteed by the constitution and under 2009 legislation reaffirming the role of wage councils comprised of representatives of government, business and labor and formally guaranteeing the right to bilateral collective bargaining. Agreements reached through bargaining apply to all employees working in the relevant industry sector. Employees terminated for union activities have the right to immediate reinstatement, including payment of any outstanding salary.
Dispute Resolution
Uruguay promotes dialogue, negotiation and collective bargaining to mitigate the impact of labor conflict and has ratified a large majority of the ILO employment conventions.
Individual employment disputes can be settled in the employment courts, and the constitution promotes the creation of arbitration and conciliation tribunals. The Ministry of Employment can act as conciliator in labor disputes, although it has no real power to enforce its rulings.
Resolution of labor disputes—including strikes, lockouts and informal negotiations—often rests with the parties.
Strikes and Lockouts
The right to strike is guaranteed by the constitution, which describes it as inherent in the right to organize and associate. Lockouts are not expressly provided for by statute, but Law 13,720 provides criteria for legal strikes and lockouts and so implicitly recognizes their legality.
A strike cannot be called before the end of a conciliation period established by a competent agency named by the Ministry of Employment. If conciliation fails, the parties are free to engage in strikes or lockouts. Striking is illegal if it does not relate to an employment dispute, concerns individual rather than collective disputes or involves violence. Occupation of the workplace is considered a valid exercise of the right to strike, if the occupation is peaceful.
Reference Citations
Right to Organize: Constitution of Uruguay, art. 57; Law on Collective Bargaining, 2009, No. 18,566 (Spanish); Law on Trade Union Rights, 2006, No. 17,940 art. 1 (Spanish)
Dispute Resolution: Constitution of Uruguay, art. 57
Strikes and Lockouts: Constitution of Uruguay, art. 57; Law on Essential Services, 1968, No. 13,720 (Spanish)
Safety, Health and Security
In General
Employers must provide a safe and healthy environment in the workplace.
Workplace Safety and Health
The Uruguayan government adopted in Law 15,965 the International Labor Organization’s guidelines on occupational safety and health management systems, which require employers to provide a safe and healthy environment in the workplace as well as workers’ compensation insurance.
Drug and Alcohol Use
Law 18,256 prohibits smoking in enclosed workplaces.
Reference Citations
Workplace Safety and Health: Law Approving the ILO Conventions of Safety and Health at Work, 1988, No. 15,965, (Spanish)
Drug and Alcohol Use: Law Protecting the Right to Smoke-Free Environment, 2008, No. 18,256 (Spanish)
Termination
Termination by Employer
Employers are not required to specify a reason for an individual dismissal provided the employee is paid all severance owed. Employers also are not obliged to give notice prior to dismissal.
While there is no legal definition of unfair dismissal, courts have held that employers can be guilty of “abusive dismissal” in cases where the workers’ dignity has been offended (through shouting or insults) or the employee is dismissed on account of testifying against the employer. In such cases, employers can required to pay additional severance as a penalty.
Plant Closings and Mass Layoffs
There is no statutory provision for collective dismissals.
Payment on Termination
When the employment relationship is terminated by dismissal, an employee has the right to receive compensation unless the dismissal was for cause. If severance is withheld, the employer must provide a written explanation to the employee, who may challenge the termination in court.
Severance is equivalent to one month for every year or portion of a year worked up to a maximum of six months’ pay. Employees who leave an employer are also generally entitled to be compensated for accrued but unused vacation leave and annual bonus.
Unless terminated for cause, a dismissed pregnant employee or new mother is entitled to additional compensation equal to six months of salary.
Unemployment Insurance
Laid-off employees who contributed to the social security fund for at least six months over the 12-month period preceding termination are entitled to unemployment compensation. The maximum period of benefits is six months.
Partial unemployment benefits may be paid in some instances where work time has been reduced by 25 percent or more.
An additional supplement of 20 percent may be claimed if the person lives with dependents—for example, a disabled person, a spouse or a child younger than 21. When the unemployed worker is more than 50 years old, the coverage can be extended another six months.
Reference Citations
Payment on Termination: Law on Indemnifications for Disposal, 1944, No. 10,570, art. 1 (Spanish)
Unemployment Insurance: Law on Unemployment Insurance, 1981, No. 15180, arts. 2-6 (Spanish)
Personal Taxes
Residency Requirements
A resident for tax purposes is anyone who resides in Uruguay for more than 183 days in a year or whose personal or economic activities are centered in the country.
Taxable Income
Residents are taxed on all income earned, whether within Uruguay or abroad. Nonresidents are subject to tax only on Uruguayan-source income. Income subject to taxation includes remuneration, travel expenses given as compensation, vacation pay, severance payments, profit-sharing payments and the cash value of employer-provided benefits.
Tax Rates
Employment income earned by nonresidents is taxed at a flat 12 percent.
The income tax rate for residents is progressive and ranges from 0 percent to 36 percent depending on annual income.
Reference Citations
Residency Requirements: Uruguyan Tax System (Spanish)
Tax Rates: Uruguyan Tax System (Spanish)
Web References
In Spanish unless otherwise noted.
Law and Regulation
Annual Leave Act
Constitution of Uruguay (English)
Law on Equal Treatment and Opportunities for Both Sexes in Labor Activity
Law on Family Allocations
Law on Modification of Maternity Subsidy and Settlement of Subsidy for Paternity
Law on National Holidays
Law on Trade Union Rights
Law on Work Accident Insurance
Sexual Harassment