COUNTRY

Written Agreements

Employment contracts can be made expressly (written or oral) or tacitly in Ecuador. Written contracts can be executed by public instruments or by private instruments. Certain types of contracts must necessarily be made in writing, such as those in a particular profession, those where remuneration exceeds five times the general minimum wage, those on probation, etc. Such contracts must include the following information:

• Type of work and the way in which it is to be executed: if by units of time, by units of work, by task, etc.
• The amount and form of payment of the remuneration
• Duration of the contract
• Place where the work must be carried out

Written contracts must be signed by both parties and registered with the regional labor inspector within 30 days.

Oral Agreements

Oral employment contracts are valid in Ecuador, except those mandated by law to be in writing.

Implied Agreements

Contracts made in the absence of any express stipulation are implied contracts. In such contracts, the conditions determined by laws, collective agreements, and place or industry uses and customs apply in the same manner as those in written contracts.

Standard working hours are 8 hours per day or 40 hours per week. For underground work, the maximum working hours are 6 hours a day. The working day for adolescents may not exceed 6 hours a day for 5 days a week. 2 days' paid weekly rest is mandatory. Collective agreements can determine higher or lower working hours.

Employees who stop working 8 hours a day without justification will lose a proportional part of remuneration. When work is interrupted due to accidental or unforeseen causes, force majeure, or other reasons beyond the control of employers and employees, employers have the right to increase working hours by 3 hours a day to recover the lost time without liability for overtime pay.

New Year’s Day, January 1; Good Friday, Labour Day, May 1; Battle of Pichincha Day, May 24; Independence Day, August 10; Guayaquil Independence Day, October 9; Day of the Dead, November 2; Independence of Cuenca, November 3; Christmas, December 25; Carnival (dates vary).

Annual leave is an inalienable right for employees and cannot be compensated in lieu of. All employees have the right to annual leave of 15 days. Employees under 18 years of age have right to 18 days' annual leave. Employees who have worked for more than 5 years with the same employer are entitled to additional leave of 1 day per extra year of service. The choice between additional days due to seniority or payment in money will depend on the employer.

Annual leave is paid in accordance with the average salary of the employee and is paid in advance. If an employee's contract is terminated without having enjoyed vacations, he/she will receive compensation for unused leave the proportional part to the time of services.

Employees can choose to not use vacations for up to three consecutive years, in order to accumulate them in the fourth year. In case of work technical work or trusts for which it is difficult to replace the worker for a short time, the employer may deny the vacation in one year to accumulate it to the following year. If the worker does not get to enjoy the vacation due to leaving the service, he/she will have the right to remuneration corresponding to those not enjoyed, with 100% premium over their usual wages.

Employees are entitled to sick leave if they have paid 6 months of continuous contribution before the onset of non-occupational disease. They must inform their employers and labor inspector in writing within the first 3 days of their sickness, along with a medical certificate from a doctor from the Directorate of General Individual and Family Health Insurance of the Ecuadorian Institute of Social Security (IESS). The benefits are paid for a maximum of 185 days. The employer covers the first 3 days, and the IESS pays the remaining. The benefit is paid from the fourth day as 75% of the last remuneration.

Employers must pay sickness benefits at 50% of their wages to employees who are not entitled to IESS sickness benefits. Such benefits are paid for a maximum of 2 months.

All female employees in Ecuador have the right to 12 weeks of paid maternity leave, 2 weeks before delivery, and 10 weeks after.

Employees are entitled to 15 months of optional unpaid leave after paid maternity leave has ended to care for their biological or adopted children.

Adoptive employees are entitled to adoption leave for 30 days from the date of leaving the adoption entity. Employees who adopt newborn children are entitled to the same paid and unpaid leaves as those provided to biological parent employees.

Employers are prohibited from dismissing pregnant employees and those on maternity leave, except for liquidation or disability that makes them unable to work.

Ecuador grants fathers 15 days of paid and 15 days of unpaid paternity leave. Employees are entitled to 15 months of optional unpaid leave after paid maternity leave has ended to care for their biological or adopted children. In case of premature birth, the leave is increased by eight days and when the child is born with a disease - degenerative, terminal or irreversible, or with a degree of severe disability, the parent can take paid leave of up to 25 days.

In the event of the death of the mother during childbirth or while enjoying maternity leave, the father may make use of all, or where appropriate, of the remaining part of the maternity leave that would have corresponded to the mother if she had not died.

Minimum Wage

The unified basic salary is USD 470 (US dollar) per month, and sectoral minimum wages will increase by 2.174% in 2025.

Overtime, Holiday & Vacation Pay

Work done more than the daily limit of 8 hours or the weekly limit of 40 hours is considered overtime. Overtime cannot exceed 4 hours a day or 12 hours a week. Overtime can be done with a written agreement between the employee and employer. It is paid as follows:

• Day overtime is paid at a 50% premium
• Overtime done between 12:00 AM and 06:00 AM is paid at 100% premium
• Work done on Saturday or Sunday is paid at 100% premium

Employers must inform the labor inspector if employees are required to work on public holidays. Employees are entitled to a premium of 100% of their wages for the day. Annual leave is paid in advance and is based on the employee's average salary.

Notice Period

It is not mandatory to give notice to terminate a contract. Both employers and employees can terminate a contract without notice by paying a sudden dismissal bonus. Fixed-term contracts can be terminated by giving a notice of at least 30 days by the employer and 15 days by the employee. In case of termination without notice, employers must pay the employees compensation equal to 25% of their last monthly remuneration for each year of service with the employer. This compensation is in addition to any severance pay to which the employee is entitled.

Severance Benefits

Severance benefits are paid to employees whose contract is terminated untimely, as follows:

• Up to 3 years of service - 3 months of remuneration
• More than 3 years of service - 1 month of remuneration for each year of service up to a maximum value of 25 months of remuneration

In case of sudden dismissal without notice, employees are entitled to a sudden dismissal bonus equal to 25% of their last monthly remuneration for each year of service with the employer.

Pension

All employers in Ecuador must register their employees with the Ecuadorian Institute of Social Security (IESS), which provides pension benefits. There is no fixed age for retirement. The retirement pension is granted from the month a member ceases employment and fulfills the following requirements:

Retirement pension is the average of 5 best years of income on which contributions are paid. This average is multiplied by the annual coefficient corresponding to the number of years of contributions. The pension coefficient increases by 0.0125 for each additional contribution year beyond 40 years.

In addition to their regular pension, retirees receive an additional month's pension as a Christmas bonus in December. A fourteenth pension is paid in September of each year for pensioners from the Sierra and Amazon regions and in April for those of the coast and insular region. The amount is equal to a unified minimum wage in force in the year of payment.

Dependents/Survivors Benefits

The Ecuadorian Institute of Social Security (IESS) provides survivors' pension to widowed spouses, cohabitants, children under 18 years of age or disabled, and in absence of these, to financially dependent parents of a deceased member. The members must have been recipient of old age or invalidity pension or active member with at least 60 contributions.

The surviving spouse of legal cohabitant receives 60% of the pension the deceased was entitled to. If there are children, they receive the remaining 40% of the pension divided proportionally. In the absence of these, parents of the deceased receive 40% of the pension the deceased was entitled to. The right to pension ceases upon death, remarriage or reaching 18 years of age.

In case of death due to work injury or occupational disease within 180 days of the accident or beginning of disease, employers are liable to pay survivors pension to the heir of the deceased. This pension is paid as 60% of the pension the deceased was entitled to. If there are children, they receive the remaining 40% of the pension divided proportionally. In the absence of these, parents of the deceased receive 40% of the pension the deceased was entitled to.

Invalidity Benefits

The Ecuadorian Institute of Social Security (IESS) provides disability pension to insured members who are permanently incapable of seeking temporary or definitive job proportionate to their ability, strength and training due to non-occupational reasons. To be eligible for this benefit, insured member must have paid at least 60 monthly contributions of which six must be immediately prior to disability. Unemployed insured members can avail disability benefit if their disability occurs within 2 years of being unemployed, provided they have paid a minimum of 120 contributions.

Disability pension is granted after medical approval from IESS qualifying physician and rehabilitation efforts. After this, a temporary subsidy is granted for up to a year. If the condition does not improve after that, an economic analyst proceeds to calculate the benefit and pension for life. Pension is calculated as average of 5 best years of income on which contributions are paid. This average is multiplied by the annual coefficient corresponding to the number of years of contributions.

In case of disability due to work injury or occupational illness, benefits are paid by employers. The employer will be obliged to pay for medical treatment and supply and renew normal use of prosthetic and orthopedic devices, the use of which is deemed necessary due to the injury suffered by the victim.