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Employment contracts in Paraguay can be either in writing or verbal. An employment contract may be signed by another person on behalf of either party. In this case, the signature must be done at the justice of peace of the jurisdiction, notary public, or the secretary-general of the respective union, if any. The employment contracts must have a stamp on each page along with signatures of the employer and employee. In the absence of a written employment contract, the existence of the employment relationship alleged by the worker will be presumed unless there is evidence to the contrary.

The standard work period in Paraguay is 48 hours per week and eight hours a day for work performed during the day. Work performed at night, which is between 8 p.m. and 6 a.m., cannot exceed 42 hours a week or seven hours a day. Mixed day and night work is limited to 45 hours per week. Employees are entitled to 30% above the standard rate for nighttime work. Overtime work is limited to three hours a day and total hours of 57 per week, including regular hours and overtime hours. The standard rate for overtime work is 50% above the wage. When the overtime is performed during the night, the rate is 100% above the standard rate. Overtime on public holidays is paid at 100% above the standard rate.

In Paraguay, the public holidays are:

• New Year's Day

• Heroes' Day

• Maundy Thursday

• Good Friday

• Labor Day / May Day

• National Holiday

• Independence Day

• Chaco Armistice

• Founding of Asuncion

• Boqueron Battle Victory Day

• Virgin of Caacupé Day

• Christmas Day

Employment contracts in Paraguay may be terminated by mutual consent, by the employer or by the employee. Employers may terminate an employee without providing notice in specific situations, such as deceit or lying, theft, violence or threats of violence towards the employer or co-workers, material damage to employer property due to negligence or serious fault of the employee, committing immoral acts at work, disclosing confidential information, failing to comply with company policies or rules, failing to comply with legal safety standards, decrease in work performance, or competing with the employer without consent. Employers can dismiss an employee without notice for unexcused absences of three consecutive days or four times in a month.

Severance is 15 days of wages for each year of service.

Employees in Paraguay receive a 13th month bonus each year equal to one-month’s salary. The bonus must be paid by Dec. 31 of each year. The bonus, generally referred to as the Christmas bonus, is equal to one-twelfth of all remuneration accrued during the calendar year, including salary, overtime, and commissions. The bonus is paid out on a prorated basis upon separation of service.