Minimum Wage

General

The minimum wage in Ecuador is referred to as unified basic salary (“SBU”) and the minimum wage for economic sectors is 425 USD per month.

Payroll

Payroll Cycle

The payroll cycle in Ecuador is generally monthly or bi-monthly, and employers must make salary payments on the same day of the month.

13th Salary

In Ecuador, it is mandatory to pay a 13th-month and even a 14th-month salary payment. Generally, the 13th-month salary is to be paid in December and the 14th-month salary in March or April.

Working Hours

General

The standard working week in Ecuador consists of 40 hours a week, typically 8 hours a day for a five-day working week.

Overtime

All work above the standard working hours a week is paid as overtime and regulated by the employment contract/collective agreements. When an employee is requested to work overtime or work on holidays, there are maximums of four hours a day and 12 hours a week.

All overtime hours more than 40 hours a week are paid at an overtime compensation rate of either 150.00% or 200.00% of the employees’ regular salary; the rate depends on the work performed during overtime and the time when the overtime was worked.Overtime hours completed must be approved by the local labor inspector.

Working Week

Monday-Friday

Leave

Paid Time Off

In Ecuador, full-time employees’ standard paid leave entitlement is 15 days per year, increasing to 16 days of paid leave after five years of continuous employment. An employee must have served one year of service to be entitled to the standard paid leave entitlement.

Public Holidays

There are 14 public holidays.

Sick Days

Employees who have 180 days of continuous contribution to the Ecuadorean Social Security Institute (IESS) within six months prior to the onset of illness, or 189 days of continuous contribution within eight months before the start of illness.

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

All sick absences require a professional medical certificate provided to the employer within 48 hours of the start date of the sick period.

Maternity Leave

New mothers are entitled to maternity leave of 12 weeks, two weeks before birth and ten weeks after birth.

Social Security and the employer share maternity payments; Social Security pays 75%, the employer pays 25%. Ten days are added for additional births.

New Mothers are also entitled to nine months of shortened working days, six hours instead of eight.

Paternity Leave

In Ecuador, Fathers are entitled to ten days of paid paternity leave, increasing to 15 days in the case of multiple/complicated births. Fathers are entitled to 18 days of paid paternity leave in the unfortunate circumstance of premature birth.

Parental Leave

In Ecuador, following the end of paid paternity leave, adoption leave,or the conclusion of maternity leave, employees are entitled to an optional unpaid leave for up to nine additional months to take care of the children within the first year of their life.

Other Leave

Depending on collective agreement/employment contract terms, an employee may be allowed additional leave types, on approved between the employer and employee, for the following:

• Bereavement leave: employees who have suffered the loss of an immediate family member are entitled to up to 3 days of paid bereavement leave.
• Childcare leave: employees are entitled to 25 days of leave should their child be hospitalized.
• Adoption leave: employers must grant adoptive parents 15 days paid leave of absence, from when the child is legally delivered to them.  Military leave: when an employee is called to partake in Compulsory Military Service in the National Armed Forces, the employee is entitled to paid absence. The employer is required to pay the salary, in the following proportion:
• During the first month of absence from work, a 100% salary  
• During the second month of absence from work, 50% of the salary
• During the third month of absence from work, 25% of the salary

Termination

Termination Process

The termination process varies according to the employment agreement and collective agreements in place and is based on the type of contract and reason for termination.

Notice Period

In Ecuador, the notice period is stipulated in the employee’s employment contract/collect agreement; it is not a statutory obligation.

Severance Pay

Should financial compensation for an employment termination relationship without a cause be required, the amount and calculation are determined in the Ecuadorian Labor Code.

Severance pay is equivalent to a one-month salary payment for each year of service, pro-rated for any part-year worked. The minimum financial compensation is three monthly payments (at the regular salary rate), and the maximum is 25 monthly payments.

Additionally, the employer can offer a sudden dismissal bonus at 25.00% of monthly wages for each completed year of service.

Probation Period

The probationary period in Ecuador is dependent on the type of role and is stipulated within the employment agreement. In general, probation periods are up to three months.

VISA

VISA

Ecuador has a very lenient visa policy, and citizens from most countries can enter and stay without a visa – but only for up to 90 days.

The temporary resident visa for Ecuador is a type of long-stay visa. It is issued to foreigners who want to live, study, work or retire in Ecuador. They can be issued for up to two years and can be renewed before they expire. The types of Ecuador temporary resident visas include:

• The Ecuador Work Visa is for foreigners who have found a job with a company in Ecuador.
• The Ecuador Student Visa is suitable for foreigners who have been accepted in a university or other academic program in Ecuador and wish to pursue their studies there.
• For foreigners who want to retire in Ecuador and have the necessary financial means to do so, Ecuador Retirement visa.

The visa documentation must be legalised by the Ecuadorian Embassy or Consulate and may need to be translated into Spanish.

Once the foreigner has lived in Ecuador for more than 21 months under a temporary resident visa, an application can be made for a permanent resident visa for Ecuador.

VAT

General

The standard rate of VAT in Ecuador is 12.00%.