Ecuador 🇪🇨
Congratulations on your decision to hire employees in Ecuador! Ecuador is known for its affordable labor costs and for having a diverse workforce with expertise in various industries, including agriculture, oil and gas, and tourism. Plane makes the hiring process easy for you by providing automated tax document collection, payroll, benefits, and more. This ensures compliance and efficiency throughout the process. Navigating how to hire in a new country can be challenging, so we've compiled the details below to help guide you.
Currency
USD
 Onboarding
2.5 weeks minimum
Employer Cost
14.15%
Pay Frequency
Monthly
Public Holidays
10
4 Considerations Before Hiring in Ecuador
As an employer in Ecuador, it is important to have a comprehensive employment contract outlining the employment relationship's terms and conditions. The contract should include compensation, benefits, vacation time, and sick leave policies. Before onboarding a new employee in Ecuador, take a moment to consider the following questions:
Getting Started with Hiring in Ecuador
Employment Contract
It is advisable to have written employment contracts in Ecuador that specify the terms and conditions of employment, including the employer and employee, place of employment, job duties, salary and payment schedule, vacation and other benefits, and any agreed-upon probation period or other terms.The Ecuadorian government ended the possibility of entering fixed-term contracts. There is a possibility of entering “temporary contracts” in circumstances such as for maternity leave, sick leave cover, or circumstances where the employer can demonstrate the need to employ someone temporarily. A temporary contract may only last 180 days within a 365-day period.
Payroll Timelines and Dates
Pay Frequency: Employee payroll is monthly. Employees receive their pay via direct deposit by the last working day of the month.Payroll Change Cutoff Dates: To meet payroll deadlines, any changes must be submitted to support@pilot.co by the cutoff date.Pilot sends payroll summaries to admins at the end of the second week of the month. After that, charges are automatically debited. Payroll summaries are also available to admins in their Pilot accounts. Payday may vary based on country requirements.
Working Hours
Employees in Ecuador generally work 8 hours a day, 5 days a week, totaling a 40-hour workweek. Approval from the local labor inspector is necessary for overtime work, which is limited to a maximum of 4 hours per day and 12 hours per week. Overtime pay varies between 150% and 200% of the standard rate, depending on the timing of the work.
Public Holidays
There are 10 public holidays in Ecuador:
- New Year’s Day
- Carnival
- Good Friday
- Labor Day
- The Battle of Pichincha
- Independence Day
- Independence of Guayaquil
- All Souls’ Day
- Independence of Cuenca
- Christmas Day
Compensation
To check remote salary data in Ecuador by job title, you can use Plane's Remote Compensation Tool.
Health Insurance Benefits
Ecuador provides universal healthcare that is available at no cost to patients. The healthcare system is operated by the Ministry of Public Health and IESS (Ecuadorian Institute of Social Security) and includes prenatal and postnatal care for pregnant women.For our recommendations about supplemental health insurance, please see the section above on "Do you want to offer private supplemental health insurance?"
Sick Leave
Employees have unlimited sick leave, but must inform social security after 3 days of illness. Social security pays 75% of sick leave, while the remaining amount is paid by the employer.
Vacation Leave
Employees are entitled to 15 days of paid vacation per year, and those who have worked for at least 5 years are entitled to either an additional day of vacation or a cash payment. Some collective bargaining agreements may provide for more vacation days. Vacation days may be carried over for up to 3 years.
Maternity / Paternity / Parental Leave
Female employees in Ecuador are entitled to 12 weeks of paid maternity leave, of which 2 weeks must be taken before the birth if the employee can provide a medical certificate. This leave is paid at 100% of their salary and can be extended by 10 days in the case of multiple births. Female employees also receive up to a year of unpaid leave for a pregnancy-related illness. Male employees are entitled to 10 days of paid paternity leave, which can be extended by 5 days in the case of multiple births or a cesarean birth or 8 days for a premature birth. Employees are also entitled to 15 days of paid adoption leave once the adoption process has begun.
Employment / Termination
Employment contracts may be terminated by the employer for just cause or breach of contract with the permission of the labor inspector, or for economic reasons. The employer must follow specific rules and procedures, which may require notice depending on the reason for termination, and they may be required to pay severance.In the event of termination or resignation, the employer must pay 25% of the last monthly compensation for each year of service. Additionally, in the case of termination, employees with less than 3 years of service receive 3 months of salary, while those with more than 3 years of service receive 1 month of salary per year of service, up to a maximum of 25 months.At Pilot, we process involuntary offboarding via Mutual Termination Agreement (MTA) as a common practice that enables an employer to terminate an employee while trying to minimize the risk of litigation and cost. It is a separation agreement including unused leave, notice period, severance, and terms negotiated between the parties in exchange for a waiver where an employee waives their right to challenge a termination as unfair or unlawful. The notice period varies based on the length of employment.It is important to note that Pilot often cannot facilitate unilateral terminations or dismissals. These types of termination are a potential source of litigation that can expose employers to increased damages and other costs. Also, the reason for these terminations may not be valid for an employer of record. The notice period varies based on the length of employment.We ask that you give us as much notice as possible and involve us right from the beginning of the process so we can better support and guide you through the process. Involuntary termination can take time to negotiate with the employees to mutually agree and end on good terms. Here you can find additional information on how to terminate an employee.
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Annual cost of employment*
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| Salary | Taxes (32.65%) | Total | |
|---|---|---|---|
| Monthly | 0BRL | 0BRL | 0BRL |
| Annual | 0BRL | 0BRL | 0BRL |
*rates for: July 23, 2024
Once you have sorted out the details mentioned above, you can add the employee to the Plane platform. We provide a step-by-step workflow that shows what tasks need to be completed, as well as real-time updates and notifications. This way, you can stay on top of the hiring process at all times. With Plane, you can confidently hire, knowing that you have a powerful platform at your disposal to manage the entire process from start to finish. Here are the instructions for adding a new employee to the platform:
How to hire and onboard an employee
Plane offers a guided process for administrators and managers to hire and onboard their new employees...
Learn moreHiring an employee in a new country can be complex, but with the right guidance and resources, it can be a smooth and successful transition. At Plane, we're committed to helping you navigate the process of hiring an employee in Ecuador. We'll keep you updated with the latest regulations and employment laws. Best of luck with your new hire, and welcome to Ecuador!
Frequently Asked Questions
Here are the answers to some common questions about hiring employees in Ecuador with Plane:
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