The Peruvian Congress recently approved a measure that allows the total withdrawal of Compensation for Time of Service (CTS) for workers in the private regime, valid until December 31, 2024. This decision seeks to mitigate the adverse economic effects caused by exceptional situations and provide immediate financial relief to workers.
The approval of this measure represents a significant step towards making economic resources more flexible in times of crisis. The next step is the responsibility of the Executive, who can enact the law or observe it, which would further delay the deadlines for accessing the money in this account.
CTS Withdrawal: will you be able to access your CTS in May?
The process of releasing CTS funds has not yet begun. Congress approved on May 2 that millions of workers can withdraw their money. In the event that the Executive decides to observe the law and the Legislature insists on approving it, citizens could access their CTS from June 4, 2024.
What is the schedule that must be met before retirement?
Finance expert José Carrillo prepared a schedule with the possible dates of each step necessary for the CTS retirement law to be enacted and workers to be able to disburse their money.
- Sending the signature of the law to the Executive Branch: 05/03/24
- Possible observation by the Executive Branch: 05/20/24 (15 business days)
- Approval at the insistence of the law by the Plenary of Congress: 05/23/24
- Promulgation of the law in the Official Gazette El Peruano: 05/24/24
- Publication of the regulations by the Ministry of Labor: 06/03/24 (10 calendar days).
- Start of withdrawals: 06/04/24.
Who has CTS?
All employees under the private employment regime who meet the criteria established by law, including a minimum of four hours of work per day and one month of service in the calculation period, are covered. In addition, workers in the agricultural regime who do not receive their CTS along with their remuneration, as well as domestic workers.
When is the CTS deposited?
CTS deposits are made twice a year, in May and November. If the new provision is enacted, workers will be able to access these funds in advance and in full.
How much is the fine for companies that DO NOT deposit CTS?
Companies that do not comply with the CTS deposit on the stipulated dates face significant penalties. The fine depends on the size of the company and the number of workers affected and ranges from S/566 to S/134,518.
The entity responsible for applying the fines is the Superintendence of Labor Inspection (Sunafil) and to determine them it is based on the current Tax Tax Unit (UIT), which is S/5,150.
What is CTS in Peru?
In Peru, the Compensation for length of service (CTS) is a work benefit that serves as a reserve fund for dependent employees, intended to offer economic protection in situations of unemployment. Employers make deposits into this fund twice a year, in May and November. The CTS is intangible and its withdrawal is only permitted under specific conditions dictated by law, such as the termination of the employee’s employment relationship.
Source: Larepublica
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