In order to “generate sources of work that successfully contribute to development”, the Young Entrepreneur Law (No. 31828) has been in force since this year, promoted by Congress and endorsed by the Executive. The aim is to promote only the hiring of Peruvians between 18 and 29 years old.
This measure will not generate any substantial change in the marketwarns labor activist Fernando Cuadros Luque, since the chips are poorly distributed: more incentives are given to businessmen and more obstacles are placed on interested parties.
For example, to determine the Income taxemployers who hire these workers may apply for an additional deduction of 50% of the remuneration basic that is set for them until 2025, as long as young people in the age group already mentioned have been unemployed the previous year.
Furthermore, the law states that the basic remuneration of this employee cannot exceed S/1,700 and the minimum term of validity of the employment relationship is one month.
Another point establishes that the new worker is incorporated into the T-registration of the electronic payroll within the deadlines provided for in current legislation.
Bad focus
“It’s more of the same,” laments Cuadros for La República, alleging that These parameters appear to be mere temporary employment. and “that is not the solution” with which the labor market must be straightened, where denaturalized contracts prevail. In his opinion, hiring for an indefinite period should be promoted to give predictability to young people.
Labor activist Ricardo Herrera agrees with the urgency of a youth regime of unrestricted hiring for at least one year or giving employers an additional percentage in public tenders for purchases of state goods and services for hiring young people.
It is worth remembering that Law No. 31828 had to be regulated 60 days after its approval – given in July 2023 – but until now the Government of Dina Boluarte he hasn’t done it.
What dangers does the lack of regulation generate? According to Herrera, it could happen that Sunat does not recognize the 50% deduction to the employer even though it hired young people. “The slowness with which the process is handled is terrible. Government. Not this one, but several, in terms of regulations. It’s already over with remote work,” Herrera mentioned for this newspaper.
On the other hand, Cuadros concludes that despite the stimulus to entrepreneurs, with the current recession and lack of demand – noted in the tiny 0.2% of private consumption in 2023 according to the BCRP – hiring can hardly move forward. “Sales fell and no matter how much taxes go down, they won’t hire anyone,” he pointed out.
They bet on very limited stimuli
It is also established that in the processes of contracting goods, services or works of public entities, companies formed by young people, whose age is equal to or greater than 18 years up to 29, have an additional score bonus of 5% in the technical proposal.
Herrera adds that it is more common for companies to hire young people than for young people to hire in the State because they do not usually have the economic capacity or productivity to compete in the market supplier. They just emerge. Reactivation further encourages expanding the range of youth recruitment.
The numbers
- 60% of young Peruvians opted for a career without demand, according to the MTPE.
- 340,000 young people who finish school do not continue higher education.
Source: Larepublica
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