Deposit of the Compensation for Time of Services (CTS)
The deadline to make the semi-annual deposit of the Compensation for Time of Services expires on May 15th, 2019.
Do you want to know the most relevant aspects regarding the deposit of the CTS?
Here is a brief Q&A about this social benefit:
Who is entitled to receive the payment of the CTS?
Workers subject to private activity who work at least 4 hours a day on average.
Workers who have a minimum service period of 1 month.
Which is the payment opportunity of the CTS?
First Fortnight of May: for the semi-annual period of November - April.
First Fortnight of November: for the semi-annual period of May - October.
What infractions are generated if a company fails to fulfill this labor obligation?
Serious infringement in the matter of labor relations in case the CTS is not deposited in full and in a timely manner.
Example: From 1 to 10 workers affected by such breach, the fine may amount up to 1.35 of the UIT (S / 5,670.00).
Is the worker currently able to withdraw his/her accumulated CTS funds?
The worker will be able to dispose of 100% of the surplus of 4 monthly gross remunerations, considering the amount of the last salary of the worker.
Example: If the accumulated funds of a worker's CTS is S/ 6,000.00 and its gross monthly remuneration amounts to S/ 1,000.00, he/she may withdraw S/ 2,000.00.
Why? Because 4 gross monthly remunerations would amount to S/ 4, 000.00, leaving as balance the S/ 2,000.00 which will be available to withdraw.
How does the CTS withdrawal procedure work?
The worker must inform his/her employer that he/she will withdraw the corresponding amount (taking as a maximum point the amount of which he can legally dispose of). After that, the employer must inform the financial institution where the worker has this social benefit, and must specify the amount.
What happens when the employment relationship between the employer and the worker ends?
The employer has a period of 48 hours to give the worker the "CTS withdrawal letter" for the worker to withdraw 100% of their accumulated CTS funds in the corresponding financial institution.
What happens when the employee worked for a period of less than one semester?
The "Truncated CTS" will be paid directly in the worker's social benefits settlement within 48 hours of the termination.