Companies in Peru are legally required to maintain formal salary policies and explain their compensation criteria under Law 30709, legal and human resources experts warned.
Data from professional services firm PwC reveals that more than 70 percent of workers know little or nothing about the benchmarks their employers use to set salaries and promotions.
At the same time, research from consulting firm Mercer shows that 77 percent of organizations globally are developing pay transparency strategies, though only 14 percent have fully implemented them. A separate study by compensation data provider Payscale found that transparent salary practices can reduce an employee's intention to resign by 30 percent.
Jorge Tomaya, a lecturer in the Academic Department of Law at the Pontifical Catholic University of Peru, stated that companies have a legal obligation to establish a salary policy and explain the criteria used to fix earnings.
Tomaya explained that while employers may keep individual worker earnings confidential, they must communicate how job positions are valued, what criteria govern pay adjustments, and what justifies wage differences between staff. He noted that confidentiality protects personal data, whereas transparency ensures corporate decisions rely on objective and verifiable rules.
The Pontifical Catholic University of Peru, founded in Lima in 1917, is the oldest private university in Peru and a major center for legal education. Law 30709 was enacted in Peru to enforce equal pay for men and women across the private sector.
Job Evaluation and Salary Band Creation
Latife Reaño, general manager of human resources firm LRS Consultoría, pointed out that many businesses confuse salary confidentiality with a total lack of transparency. She explained that transparency requires revealing the rules used to set pay rather than disclosing individual worker salaries, which builds trust and strengthens workforce commitment.
Reaño detailed that in any compensation framework, the position is evaluated before the individual employee occupying it. Organizations evaluate positions by analyzing required knowledge, job complexity, assigned duties, and the direct impact of the role on business performance.
Following job evaluation, companies establish salary bands that define the minimum and maximum pay ranges for each job tier. These internal bands are then benchmarked against external market data to ensure the firm remains competitive in attracting and retaining qualified personnel.
Reaño cautioned that a widespread mistake among growing firms is failing to establish a formal pay structure. In such cases, salaries are determined through individual negotiations or external market rates without considering internal job value, a problem frequently seen in family owned businesses and rapidly expanding companies.
Objective Factors Behind Salary Differences
Comparing earnings with colleagues is common among employees, but pay differences do not automatically indicate unlawful discrimination.
Reaño explained that two workers in the same role can legitimately receive different pay based on objective factors. These include accumulated work experience, individual job performance, professional certifications, specialized skills, length of service with the company, and growth potential.
When assessing whether their pay is competitive, employees should examine their total compensation package rather than base salary alone. Reaño advised workers to include bonuses, employee benefits, training opportunities, and professional development prospects when evaluating their overall remuneration.
Legal Risks and Penalty Enforcement
Under Peruvian Law 30709, employers must apply objective standards to categorize job roles and promote equal pay across their workforce.
Tomaya outlined that businesses must maintain a communicated salary policy, a job category schedule supported by objective evaluations, clear criteria for internal promotions, equal access to training programs, and advance notice of how performance appraisals impact pay.
During workplace audits on pay equality, labor inspectors ask to examine the corporate salary policy first. Tomaya warned that companies unable to produce a policy or justify pay differences between comparable workers face fines, labor lawsuits, and mandatory orders to equalize salaries and issue retroactive back pay.
Tomaya added that failing to follow objective criteria during employee promotions can be classified legally as an act of workplace hostility equivalent to unfair dismissal.
Beyond legal penalties, Tomaya emphasized that secrecy carries severe intangible costs for workplace culture. He noted that workplace conflicts rarely stem from the salary amount itself, but from corporate silence, as employees can accept pay differences if their employer clearly explains the reasoning behind them.
Both experts agreed that international workplace trends are moving toward greater pay transparency. Reaño stressed that clear compensation rules foster internal trust, while Tomaya anticipated that Peru may gradually introduce stricter transparency requirements while preserving business flexibility to reward merit.
