Ecuador

Labor Compliance Guide

Labor Requirements

In Ecuador, employment conditions can vary greatly depending on the type of work. The Ecuadorian Constitution and the Labor Code establish the fundamental principles of labor law. 

Hours & Pay Regulations

Normal Working Hours

An employee may work up to a maximum of 8 hours per day, five days per week, thus totaling a maximum of 40 hours per week. 

 

Employees working underground may have a maximum duration of six (6) hours of work distributed in up to five (5) days a week. Part-time is understood as that which is held to provide services for less than eight (8) hours a day, forty (40) a week, and less than one hundred and sixty (160) hours a month.

 

Recovery of Working Hours

When due to accidental causes or unforeseen events, force majeure or other external reasons at the will of employers and workers work is interrupted, the employer pay the remuneration, without prejudice to the following rules:

      • The employer shall have the right to recover the wasted time increasing by up to three hours in the subsequent days, without being obliged to pay the surcharge;
      • This increase will last until the hours of excess are equivalent by the number and the amount of the remuneration, to the period of interruption.
      • Make up for lost time for workers may require the prior authorization of the labor inspector before the employer will submit an application.

Art 47 of the Labour Code.

 

Part-Time Work

In the permanent part-time work contracts, the duration of the working day is less than eight hours. Art 82 & 50 of the Labour Code. 

Overtime

Overtime may not exceed 4 hours per day or 12 hours per week.

 

Overtime occurring before midnight is considered “supplementary hours”. The employer will pay the corresponding remuneration for each of the supplementary hours with a fifty percent (50%) surcharge.

 

Overtime occurring from midnight to 6:00 a.m. is considered “extraordinary hours” and is paid with a surcharge of 100%.

 

For part-time workers, the units of work executed during the surplus hours of the mandatory eight will be considered for the surcharge of the remuneration; in such case, the remuneration corresponding to each unit will be increased with 50 or 100 % surcharge depending on the case. Article 47 of the Labour Code.

 

There shall be no supplementary pay for overtime in the case of employees who represent or act on behalf of the employer through management, supervision, or administration (activities based on confidence). Article 58 of the Labour Code.

Night Work

The night shift is between 7:00 p.m. and 6:00 a.m. the next day, can have the same duration and gives the right to equal pay as the day, with an increase of twenty-five percent (25%). Art 49 & 55 of the Labour Code.

Breaks

The ordinary workday can be divided into two parts, with rest up to two hours after the first four hours of work. In the case of supplementary work, the parts of each shift shall not exceed 5 hours. Art 57 of the Labour Code.

 

Breastfeeding Break 

Employees are entitled to 2 hours of breastfeeding leave, during the 12 months after giving birth. In other words, a working day will last 6 hours until the child is one year old.

Work On Rest Days

Saturdays and Sundays will be mandatory rest days. If due to certain circumstances, an employee is required to work on the rest day, another equal time of the week will be designated for the rest, by agreement between employer and workers. Rest day will comprise a minimum of 48 consecutive hours.

 

Work during Saturdays and Sundays must be paid with a 100% surcharge if these are obligatory rest days.  In the case of part-time workers, said payment will be made based on the average of the remuneration earned from Monday to Friday; and, in no case, will it be less than the minimum wage the employee is entitled to. Art 50-53 of Labour Code. 

Public Holidays

There are 11  public holidays in Ecuador which are as follows – 

  • January 1 – New Years
  • Shrove Tuesday
  • February 24 & 25 – Carnival
  • Good Friday
  • May 1 – Labor Day
  • May 24 – The Battle of Pichincha
  • August 10 – Independence Day
  • October 9 – Independence of Guayaquil
  • November 2 – All Soul’s Day
  • November 3 – Independence of Cuenca
  • December 25 – Christmas

Holidays that coincide with Wednesday, Thursday, or Saturday will be moved to Friday. The holidays that coincide with Sunday or Tuesday will be moved to Monday. Exceptions for transfers of holidays are January 1, December 25, and Shrove Tuesday. These dates will be off regardless of the day they coincide. In the event that national holidays coincide in continuous days, the following rules apply:

      • If those holidays coincide with Monday and Tuesday, the mandatory rest days will not be transferred, the same rule will apply in case the holidays coincide with Thursday and Friday
      • If the holidays coincide with Tuesday and Wednesday, the day of rest mandatory Wednesday will go to the Monday immediately prior to Tuesday of holiday and this last day will not be subject to transfer;
      • If the holidays coincide with Wednesday and Thursday, the rest day mandatory Wednesday will move to the Friday immediately following, and the day Thursday of the holiday will not be subject to transfer;
      • If the holidays coincide with Friday and Saturday, the rest day Mandatory Saturday will go to the Thursday before the Friday holiday; and,
      • If the holidays coincide with Sunday and Monday, the rest day mandatory Sunday will be moved to Tuesday following the Monday of the holiday.

For the sectors that cannot stop their activities, the alternatives of rotating shifts or the payment of those days worked are established.

        • Rotating shifts: other days will be assigned for mandatory rest.
        • Payment of holidays: employers will cancel those days to their workers.

Work on Holiday

Work carried out on holidays will be paid with a 100% surcharge. For the calculation of these hours, the remuneration received by the worker corresponding to the hour of his work is taken as a basis.

Saturday & Sunday which are weekly rest days will be paid with the amount equivalent to full remuneration, that is, two days, according to the nature of the work or industry. In the case of piecework workers, said payment will be made taking as a base the average of the remuneration accrued from Monday to Friday; and, in no case, it will be less than the minimum remuneration.

 

In the same way, the mandatory rest days will be paid, provided it does not coincide with the weekly rest days. Art 64-68 of Labour Code, http://www.ccq.ec/wp-content/uploads/2017/06/Consulta-Laboral-Diciembre-2016.pdf.

Annual Leave

Every employee will have the right to enjoy an annual period uninterrupted 15 calendar days of annual leave, including non-working days. 

 

Those who have provided services for more than five years to the same employer shall have the right to additionally enjoy one day of vacation for each of the excess years. Additional vacation days for seniority will not exceed 15 unless the parties agree to extend the benefit.

 

Vacation Pay

Vacation pay is the twenty-four part of what the employee receives during a full year of work, taking into account what is paid to the worker for ordinary, supplementary, and extraordinary hours of work and any other ancillary remuneration. If the employee is separated from work without having taken a vacation, he will receive for this concept the part proportional to the time of service. The employee will receive in advance the remuneration corresponding to the vacation period.

 

Taking Vacation

Employees can take the 15 days of vacation in a fractional way, under an agreement between employer and employee.

 

Vacations that are taken before mandatory rest days (Saturdays, Sundays, or holidays), those rest days must be considered to count the total days of vacation taken by the worker. In the vacations that are taken after days of weekends or obligatory holidays, these days of forced rest are not counted.

 

Holiday Accrual

Holidays can accumulate up to three years and enjoy them in the fourth year, otherwise, you lose the first year of vacation. Art 69-76 of the Labor Code.

Minimum Wage

As of January 1, 2020, the Labor Ministry of Ecuador fixed the unified monthly minimum wage for workers generally at US$ 400. 

Christmas Bonus:  On 24th December you are entitled to a bonus equivalent to a twelfth of all wages earned in the year, not including social benefits.

 

Discharge Bonus“Desahucio” bonus (Discharge Bonus), equivalent to 25% of the remuneration received by the employee for the last month of regular work multiplied by his years of service (complete years only).

Meal Breaks

The ordinary workday can be divided into two parts, with rest up to two hours after the first four hours of work.

Special Leave

Sick Leave

Employees who have 180 days of continuous contribution to the Ecuadorian Social Security Institute (IESS) within 6 months prior to the onset of illness, or 189 days of continuous contribution within 8 months prior to the onset of illness are entitled to sick leave 

Employees who are covered are paid by the employer for the first three days and covered by IESS for the remainder.

Maternity Leave

In addition to job security, the woman is entitled to a 12-week paid leave (84 days) for maternity. They are distributed as follows:

      • 2 weeks prior to the estimated due date
      • 10 weeks after the birth of your child

In the case of multiple births, this time is extended for 10 more days (total 94 days). In addition, the Code indicates that employees must receive their full salary. That is, payment is 100%.

 

Birth of Child with Disabilities

        • 174 days (additional 90 days) in case the child is born with a special ability or severe congenital.
        • 184 days (100 additional days) in case of multiple births and that at least one of the children was born with a special capacity or severe congenital. 

If the child dies at the time of delivery or within a few days, the employee will be entitled to 3 days of paid leave from the date and time of death.

 

The absence from work will be justified by presenting a medical certificate granted by a physician of the Ecuadorian Social Security Institute, and, failing that of this, by another professional; certificate stating the probable date of delivery or the date in which such an event has occurred. Art 152 of the Labor Code.

Bereavement Leave

Employees are entitled to 3 days of leave with full remuneration, in the event of the death of their spouse or partner in the common-law union or of their relatives within the second degree of consanguinity or affinity. 

Adoption Leave

Employers must grant adoptive parents a paid leave of absence for 15 days, from the date the child is legally delivered to them. During the enjoyment of this leave, the employer must pay full compensation. Art 152 of the Labor Code.

Paternity Leave

If the child is born by normal delivery, the father is entitled to 10 days of paid leave. If the child is born by cesarean section, the father is entitled to 15 days of paid leave. If the child is born prematurely or under conditions of special care, the father is entitled to 18 days of paid leave. If the child is born with a degenerative, terminal, or irreversible disease, or with a degree of severe disability, the father will be entitled to 25 days of paid leave.

 

If the mother dies during childbirth or while on maternity leave, the father may make use of the entire leave, or the remaining part of the period of leave that would have corresponded to the mother, if she had not passed away. Art 152 of the Labor Code.

Unpaid Paternity Leave

Once the paid paternity leave has concluded, employees are entitled to an optional unpaid leave for up to 9 additional months, to take care of the children within the first 12 months of the minor’s life. This license also applies to adoptive parents. The period during which workers make use of this license is computable for seniority purposes.

 

During the use of this leave and up to 90 days after the worker’s reinstatement, his dismissal is considered ineffective, so the employer who commits it can be sanctioned with the payment of an additional year of remuneration or reinstatement to the job, at the worker’s choice.

 

Employers can hire temporary personnel to replace workers who make use of this license, without having to pay additional surcharges and without being subject to the 180-day term limit that these types of contracts normally have.

Leave for Hospitalization of Children Leave

Workers are entitled to 25 days of paid leave to attend to the cases of their children hospitalized (for any reason), or with degenerative pathologies. Art 152 of the Labor Code.

Military Leave

When the Ecuadorian employee is called to service in ranks, for the reasons determined in the law of Compulsory Military Service in the National Armed Forces, the employee is entitled to absence. The employer is required to pay the salary, in the following proportion:

      • During the first month of absence from work, 100 hundred percent salary is paid.
      • During the second month of absence from work, 50 percent paid a salary
      • During the third month of absence from work, 25 percent of salary is paid.

Art 43 of the Labor Code.

Voting Leave

Employees must be granted the paid time necessary to exercise their right to vote in elections.established by law, provided that said time does not exceed 4 hours. Art 42 of the Labor Code.

Education Leave

Employees with more than 5 years in the company that obtain a scholarship for studies abroad, in fields related to work activity, will be entitled to a leave of absence up to 1 year, entitled to payment for 6 months. Applies to employers with 15 or more employees and the number of scholarship holders do not exceed 2%.

Last updated on: September 23rd, 2020