You have plenty to worry about as an employer in Ecuador, including compensation and benefits. Your employees will likely choose a position based on compensation and benefits, so it’s important to make sure your company stands out. Plus, meeting the country’s statutory minimums will ensure that you stay compliant.
Globalization Partners will help you provide competitive compensation and benefits through our Ecuador PEO. When you choose Ecuador compensation and benefits outsourcing with us, we’ll add your employees to our payroll and benefits plan. You can have peace of mind knowing your workers are getting what they deserve and that you’re staying compliant.
Ecuador Compensation Laws
Ecuador’s minimum wage increased from $386 a month to $394 a month in 2019. The increase was a compromise between business owners and labor groups and trade unions. Keep in mind that Ecuador’s compensation laws require you pay employees on a semi-monthly or monthly basis on the last day of the month. Usually, employers pay 40% of an employee’s monthly wage in the first half of the month and 60% at the end of the month.
Guaranteed Benefits in the Country
An important guaranteed benefit in Ecuador is paid leave. Your Ecuador benefits management plan should include time off for the country’s national holidays, as well as vacation, sick days, maternity leave, paternity leave, and more. Employees usually receive 15 days of paid vacation each year after five years of employment. They get an extra day for every year they work after that for up to 30 annual days. You should also give employees up to two months of sick leave at 50% of their normal pay.
New mothers should receive 12 weeks of paid maternity leave. Social security will pay for 75% of the leave, while you’ll owe 25%. Fathers should get 10 days of paid paternity leave, with additional days under special circumstances such as multiple births, premature births, or severe disability or illness.
How to Disperse Your Ecuador Benefits Management Plan
Dispersing your Ecuador benefits management plan means giving out both required and supplemental benefits. Many South American countries, including Ecuador, give workers 13th- and 14th-month bonuses. The 13th-month bonus is a 12th of the employee’s annual salary and should be paid by December 24 each year. The 14th-month bonus is equal to a unified minimum salary.
Restrictions for Benefits and Compensation
Your company cannot provide benefits and compensation until you have a subsidiary in the country. While that may sound simple, it can take up to a year to incorporate in Ecuador. Globalization Partners will help you start working faster with Ecuador compensation and benefits outsourcing through our global expansion solution. We offer all services through our existing Ecuador subsidiary, so you won’t have to set up your own entity to start working in the country.
Contact Globalization Partners to Learn More
At Globalization Partners, we want to see you focus on your company. We’ll help by taking the stress of compliance off your shoulders and onto our own. Contact us today to learn more about Ecuador benefits and compensation outsourcing.