11. Labor Policies and Practices
With a population growth rate above 1.4 percent per annum and more than 64.5 percent of the population below the age of 35, job creation to meet the large and growing labor force is one of the most pressing issues for the government. However, the weak education system limits the supply of well-educated workers and is an obstacle to growth. Current levels of unemployment are at 5.2 percent for year 2019. Employment informality remains high in Paraguay. According to the Paraguayan National Administrative Department of Statistics, informal employment represented 64.3 percent of the total working population in 2018 and studies published by the World Bank suggested the rate reached 71 percent for 2019.
Paraguay’s labor code makes it very difficult to lay off a formally registered, full-time employee who has completed ten consecutive years of employment. Firms often opt for periodic renewals of “temporary” work contracts instead of long-term contracts.
Paraguayan law provides for the right of workers to form and join independent unions (with the exception of the armed forces and the police), bargain collectively, and conduct legal strikes. The law prohibits binding arbitration and retribution against union organizers and strikers. While the law prohibits anti-union discrimination and sets the financial penalty, employers are not required by law to reinstate workers fired for union activity, even in cases where labor courts fine firms for anti-union discrimination.
The minimum age for formal, full-time employment is 18, including for domestic workers. Adolescents between the ages of 14 and 17 may work if they have a written authorization from their parents, attend school, do not work more than four hours a day, and do not work more than a maximum of 24 hours per week. Adolescents between the ages of 16 and 18 who do not attend school may work up to six hours a day, with a weekly ceiling of 36 hours.
For more background on labor issues in Paraguay, please refer to the Department of Labor’s Findings on the Worst Forms of Child Labor at and the latest Department of State’s Country Reports on Human Rights Practices at https://www.state.gov/j/drl/rls/hrrpt/humanrightsreport/index.htm#wrapper.