Employment and labor laws vary from country to country. This guide is intended to provide the most up to date information available. We will update this guide as needed when changes are made to the laws.
Employment Contracts
Employers are legally required to provide formal written contracts for all employees that include salary/wage, termination terms, job title, etc. The contracts must be written in Spanish and use the United States Dollar currency (USD).
Working Hours
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.
Public Holidays
Public holidays that fall on the weekend are usually lost.
For the year 2024:
- Jan 1: New Year’s Day (Monday/Tuesday)
- Feb 12: Carnival (Monday)
- Feb 13: Carnival (Tuesday)
- Mar 29: Holy Friday (Friday)
- May 3: Labor Day (Friday)
- May 24: Battle of Pichincha (Friday)
- Aug 9: National Independence Day (Friday)
- Oct 11: Guayaquil’s Independence (Friday)
- Nov 1: All Soul’s Day (Friday)
- Nov 4: Cuenca Independence (Monday)
- Dec 25: Christmas (Wednesday)
Annual Leave (vacation)
Full-time employees’ standard paid leave entitlement is 15 days per year following the completion of 1 year of service. After five years of continuous employment, an additional day is given per year (capped at an additional 30 days).
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 are entitled to sick leave of up to two months at 50% of their salary.
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 and Paternity
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.
Paternal 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
Employee Severance and Terminations
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
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 of 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.
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.
The minimum wage in Ecuador is referred to as unified basic salary (“SBU”) and the minimum wage for economic sectors is 460 USD per 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.
Contributions
Employer Payroll Contributions
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 legalized 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
The standard rate of VAT in Ecuador is 12.00%.