Labor regulations recognize the categories of employees and laborers.

A laborer is understood as a worker who provides physical services or executes work, while an employee is a worker who provides services of an intellectual or intellectual and physical nature.

The treatment of workers under legal regulations does not vary greatly based on the category of employee or laborer.

Legal regulations also recognize the category of self-employed persons and apprentices.

A self-employed person is someone who performs a trade or work or regularly performs an economic activity on a self-employed basis and receives income in the form of fees, commissions, interests, profits or other payment that is not a salary or wages.

An apprentice is a person who agrees to provide their personal services to another person for a specific period (generally no more than one year). In exchange, they receive an agreed salary and are taught art, trade or any form of manual labor.

Contracts are mainly classified into two groups: Stable or permanent contracts and non-permanent contracts (in addition to special categories such as contracts with domestic employees, apprentices, transportation employees, team contracts, etc.).

1. Stable or permanent contracts: Stable or permanent contracts are indefinite-term contracts. All indefinite term contracts executed for the first time may include a trial period of no more than 90 days after the execution date of the contract during which the employer and the employee may terminate it at any time with no previous notice and no indemnification payment. To be enforceable, this provision should be in writing. Stable or permanent contracts expressly allow part-time work, i.e. instead of the regular 8-hour workday, shorter workdays are permitted. The ‘youth contracts’ have been recently introduced among indefinite-term contracts of employment, that is, contracts entered into with an employee who is between 18 and 26 years of age.
2. Temporary contracts of employment: The main temporary contracts of employment are: (i) Spot: In response to an emergency or extraordinary needs not related to the company’s usual activities. It cannot exceed 30 days in a year. (ii) Occasional: Executed in the event of special needs (for instance, replacement of absent personnel due to vacation, illness, etc.) in which case the contract must specify the cause, the name of the replaced employees and the duration. These contracts may also be executed in the event of increased temporary demand for the employer’s production or services, in which case the employment relationship cannot exceed 180 days per year (continuous or discontinuous) and the agreed compensation cannot be lower than the basic sectorial salary increased by 35%. Exceptionally, occasional contracts of employment executed to temporarily replace employees on leave without compensation (to take care of children under 12 months of age) are exempt from the increased compensation of the replacing employee equivalent to 35% of the compensation of the replaced employee (i.e. over the minimum sectorial amount). In such cases, an occasional work contract must terminate at the end of the leave with no compensation for the replaced employee. When work by an occasional employee continues for more than 180 days within one year, or if other contract systems are adopted until one year is completed, the contract will be understood to be an indefinite term contract. When existing circumstances or the need for an employee’s services are repeated in more than two annual periods, the contract becomes a seasonal contract. (iii) Seasonal contract: Hiring of individuals or groups of employees for cyclical or seasonal work such as sowing, harvesting, and fishing. Failure to execute a contract for a cycle is equal to unfair dismissal. Employees hired for a season have the same benefits as permanent employees in proportion to their work period after having met the legal parameters for their contracts. Failure to comply with the contracting parameters under the law for temporary contracts of employment will result in these being considered permanent contracts. Likewise, if one or more occasional contracts are executed with the same employee for more than 30 days per year, the employee may argue that he is a permanent and not an occasional employee. Permanent contracts entered into with the same employee for temporary work or even for work whose duration is linked to the performance of a job may, in the event of a conflict, bring about the determination that the employee is permanent.
3. Non-permanent contracts: (i) Contract for specific work: When an employee performs a specific work for compensation comprising its entire value, without taking into consideration the time required for its performance. (ii) Task: The employee agrees to perform a specific amount of the work over a day or over a previously established timeframe. Once the task is completed, it will be understood that the workday or timeframe has finished. (iii) Piece work: Work is performed by pieces, parts, surface measurements, and, generally, by work units, and compensation is agreed for each one of them without taking into account the time involved in the work.
4. The Labor Code includes a special modality of temporary employment contracts where its term is linked to the term of the project for which the employee is hired: at the end of the project, the employment contracts also terminate. Nevertheless, if the employer begins a new project, is obliged to hire the same workers (only to cover the available positions).
5. Special modality fix-term contracts for the productivity sector, youth workers, entrepreneurship, and tourist sector. These special contracts establish a fixed term for up to one year, renewable for up to an additional year. If executed for the first time may include a trial period of no more than 90 days after the execution date of the contract during which the employer and the employee may terminate it at any time with no previous notice and no indemnification payment.
6. Emergent special contract: a special type of fixed-term contract applicable for the sustainability of production and sources of income in emerging situations or in the case of new investments or lines of business, products or services, extensions of the business, modification of the line of business, increase in the supply of goods and services, and in the case of needs of greater demand for production or services in the employer's activities. These special contracts establish a fixed term for up to one year, renewable for up to an additional year.
7. Contract for startups: These special contracts establish a fixed term for up to one year renewable for the term in which the license for startups is obtained by the employer. It may include a trial period of no more than 90 days after the execution date of the contract during which the employer and the employee may terminate it at any time with no previous notice and no indemnification payment.

In general, contracts of employment must be in writing. However, the law recognizes written and verbal contracts, as well as express and tacit contracts.

Ecuadorian legislation determines that employment contracts must be executed in writing for activities requiring technical knowledge or an art or a specific profession, as well as contracts including a trial period or temporary contracts, among others.

It also provides that written contracts must include clauses regulating the following aspects:

• The kind or kinds of work that is the purpose of the contract;
• How work is to be performed: if by time units, work units, tasks, etc;
• Amount and form of payment of the compensation;
• Term of duration;
• Place where the work or job is to be performed; or
• A statement indicating whether or not sanctions will be established, and if so, how will they be determined as well as a guarantee for their effectiveness.

Yes, part-time employees are afforded the same rights as full-time employees in proportion to their workday.

Yes. The Labor Code establishes that the assignment or sale of a company or a business or any other mode whereby the employer’s responsibility is assumed by another employer triggers the employer’s obligation to comply with the work contracts of the predecessor’s personnel.

The assignee or buyer of the business is obliged to honor the work contracts executed by the assignor (seller) and, should the assignee decide to terminate one of them without cause (unfair dismissal), it must indemnify the worker and must take into account the length of service in years of that work with the assignor.

Likewise, this rule allows a worker to stop working with the assignee upon the termination of the work contract. In that case, the assignee is obliged to indemnify the worker who wishes to leave, just as if unfair dismissal were involved.

Assignment of a business wherein the assignee honors the work contracts of the assignor’s employees will also bring about the assignee’s obligation to respect and pay all the benefits that the workers are entitled to, even those included in collective bargaining agreements.

The applicable norm (Article 171 of the Labor Code) reads as follows:

“Article 171 - Obligations of the assignor and the worker’s rights: In the event of an assignment or sale of a company or a business or any other mode whereby the employer’s responsibility is assumed by another employer, the latter shall be obligated to honor the work contracts executed by its predecessor. If the workers elect to continue with the working relationship, no indemnities shall be paid.”

The employer cannot unilaterally change the terms of employment, except when increasing the benefits of the worker.

The unilateral change of the employee’s occupation without his consent is considered unfair dismissal, even if the change does not imply a reduction of his compensation or a demotion.

The employer can temporarily oblige the worker to perform a different activity than the one he was hired for, but only to avoid serious damage to the establishment or exploitation threatened by the imminence of an accident and, in general, by chance or force majeure that demands urgent attention.

Ecuadorian Labor Law does not allow termination at will except during the trial period in indefinite-term contracts when a trial period (for up to 90 days) has been agreed upon.

In all other cases, a termination without cause constitutes unfair dismissal, which entitles the worker to receive indemnification.

In general, and save for specific situations when dismissal is declared ineffective, the employer is fully entitled to terminate the employment relationship with his employees unilaterally and in advance.

The following is deemed ineffective: (1) the dismissal of pregnant employees or those who have been fired on grounds associated with their pregnancy or maternity status; (2) the unfair dismissal of workers who are members of the board of directors of a labor organization; and (3) the dismissal of an employee who has taken unpaid leave to care for a child or children, provided that the reason was precise that the employee has used that leave (a subjective concept).

Yes. The unilateral termination of the work contract constitutes unfair dismissal that entitles the employee to indemnification for unfair dismissal and to the “desahucio” severance bonus, in addition to his other pending entitlements (such as compensations, thirteenth and fourteenth salaries, monetary compensation for unused vacation time, employee profit-sharing, rewards, commissions, etc.).

The indemnity for dismissal without cause is equivalent to the worker’s last regular and full remuneration multiplied by his number of years of service, but in no case can it be less than three months’ remuneration or more than 25. For the purposes of this calculation, a fraction of one year is considered a complete year. In addition to this indemnity, a worker dismissed without notice is also entitled to a “desahucio” severance bonus equivalent to 25% of his last remuneration multiplied by his number of complete years of service.

Workers who have worked for 20 or more years but less than 25 years continuously or interruptedly for the same employer will also be entitled to a proportional retirement pension provided by the employer. All workers who have worked for more than 25 years continuously or interruptedly will enjoy the complete retirement pension paid by the employer.

In addition to indemnification for unfair dismissal and the “desahucio” severance bonus, employees who have been unfairly dismissed are entitled to special indemnification in the following cases:

a. Unfair dismissal of female pregnant employees or unfair dismissal associated with their pregnancy or maternity status is inoperative. A period of protection for a pregnant woman during which she cannot be dismissed (because her dismissal would be inoperative) even covers a twelve-month period after childbirth known as the “nursing” period in which the mother is entitled to work a reduced 6-hour workday instead of the regular 8-hour workday.

A woman employee who is dismissed for the above reasons must file a complaint with the labor judge of competent jurisdiction within 30 days for purposes of obtaining an order for immediate reinstatement to her job. However, if she does not wish to continue working, she is entitled to a special additional indemnification equivalent to one year’s compensation.

If her dismissal is declared inoperative, the employer must reinstate the dismissed employee and must pay her any pending compensation (for the period when she did not work by reason of her dismissal) plus a 10% surcharge.

b. Unfair dismissal of an employee who is a member of the board of directors of a labor organization is considered “inoperative” and the dismissed employee is required to follow the same process established for the reinstatement of a pregnant employee. If the dismissed employee does not wish to continue working, he is entitled to a special additional indemnification equivalent to one year’s compensation.

If dismissal is declared inoperative, the employer must reinstate the dismissed employee and must pay any pending compensations for the period when the employee did not work by reason of his dismissal, plus a 10% surcharge.

This special protection is extended by up to one additional year after the termination date of that person’s duties.

c. In any event when dismissal occurs due to discrimination that affects the employee because of his condition as a senior citizen or his sexual orientation, among other things (aside from the reasons for inoperative dismissal), the employee is entitled to a special additional indemnification equivalent to one year’s compensation, but the right to be reinstated will not apply.

d. A handicapped employee or an employee suffering an impairment or disabling condition, his replacement (a person replacing the disabled employee), or an employee who is responsible for a disabled person who is unfairly dismissed, is entitled to an additional indemnification equivalent to 18 months of his best compensation.

In the event of job cuts, the employer is obligated “[…] not to consider the positions held by disabled persons or by those who take care of or are responsible for a disabled child, spouse, common-law spouse or parent duly certified by the national health authority.”

e. A stable or permanent employee who is unfairly dismissed while the request for a collective work contract submitted by the employer’s employees is being processed will be entitled to an indemnification equivalent to 12 months’ compensation.

f. An employee who is dismissed from the moment a labor inspector is notified that the employee has met with the rest of the employees in a general assembly to create a labor union or company committee and until the first board of directors is established will be entitled to indemnification equivalent to one year’s compensation.

g. The employer cannot terminate the contract of an employee who suffers a non-occupational illness rendering the employee unable to work (duly certified by a Social Security physician), provided that the illness does not exceed one year. If the employee is dismissed, the employer must indemnify him according to the regular indemnifications (unfair dismissal and “desahucio” severance bonus). However, if the employee is able to return to his role but the employer does not allow him to return, the employer must pay an additional indemnification equivalent to six month’s compensation, without prejudice to the payment of the other corresponding entitlements. Furthermore, the employer must pay the attorneys’ fees and legal expenses of a lawsuit that the employee might file to have those rights recognized.

The Ecuadorian Labor Law does not establish protection for whistleblowers. The only protections for whistleblowers established in the law are related to anti-monopoly and antitrust matters.

Yes, as well as any other person.

Ecuador’s Constitution establishes the right to “protection of personal information including access to and decisions on such information and data and protection of same”. By virtue of this constitutional right, authorization from the data subject is required in order to collect, keep on file, process, distribute or disclose such information, unless there is an express legal provision to the contrary or an order from a competent authority.

A person’s public information in the possession of the public or private sectors must be treated as confidential and comprises “information deriving from a person’s personal and fundamental rights” (especially those relating to civil due process rights). Illegal use or disclosure of such information gives rise to the relevant legal actions under the Organic Law on Transparency and Access to Public Information.

The Law on Telecommunications ratifies the foregoing by prohibiting third parties from intercepting, interfering with, publishing or disclosing any information exchanged by means of telecommunication services without the parties’ consent.

Under labor laws, there is no express provision concerning the handling of employee data kept by the employer. Therefore, the abovementioned rules shall apply, meaning that the employer cannot use this information without the employee’s prior consent.

Nevertheless, the Law on Electronic Commerce, Signatures and Data Messages provides that:

“No consent is required to collect personal data from publicly accessible sources when such data is collected for the purposes of performing duties inherent to public service, within the scope of its jurisdiction, and concerning persons with whom there is a business, employment, administrative or contractual relationship, provided that such information is necessary for the continuance of the relationship or the performance of the contract.”

In case of breach of the confidentiality and privacy obligation, the Criminal Code imposes penalties of up to three years’ imprisonment.

Article 178 of the Criminal Code reads as follows:

“Article 178 – Violation of privacy: A person who, with no consent or legal authorization, through any medium gains access to, intercepts, examines, withholds, records, reproduces, discloses or publishes personal information; data messages; voice, audio and video data; postal objects; information in computerized form; private or confidential communications of any other person, shall be penalized with one to three years’ imprisonment […].”

A criminal offense does not occur in the case of public information.

Article 229 of the Criminal Code states the following:

“Article 229 – Illegal disclosure of a database: A person who for his/her own benefit or for the benefit of a third party discloses confidential information included in card indexes, files, databases or similar means through or addressed to an electronic, computer, telematics or telecommunications system, thereby voluntarily and intentionally violating the confidentiality and privacy of persons shall be penalized with one to three years’ imprisonment.”

Aside from criminal sanctions, a person who infringes the right to privacy must redress the damages suffered by the data subject and indemnify him on grounds of moral damage. In this case, the data subject must justify that this right has been violated and the extent of the damages suffered. No punitive damages exist in Ecuador.

Yes. Labor regulations protect the worker against discriminatory practices and harassment.

For discriminatory practices that are not a crime, the employee can be fined 3 to 20 consolidated basic salaries (the monthly consolidated basic salary for 2024 is USD 460).

For discriminatory actions that are a crime, the punishment is 1 to 3 years’ imprisonment. Sexual harassment is punishable by a prison sentence of 1 to 5 years.

Workplace harassment (including sexual connotations) is considered grounds for the worker to ask the Labor Inspector to declare the termination of the employment contract, which has the same effects as unfair dismissal.

Take into consideration that Ecuadorian regulations establish that the employer must have an internal procedure to process complaints related to discrimination, workplace harassment and violence against women.

Yes. Under the Labor Code, and among other specific situations, employees are entitled to the following:

1. Vacation: The employee is entitled to a consecutive period of 15 days of rest per year, including holidays. Additionally, employees who have served for more than five years with the same employer are entitled to one extra day of vacation per year in excess, up to a maximum of 15 days, or to receive cash compensation corresponding to those extra days. The employer must choose between giving the extra days or making a cash payment.
2. Medical leave: The employee may be absent from work due to health reasons. He must justify his absence with a medical certificate.
3. Maternity Leave: 12 weeks of absence, with 10 additional calendar days of paid leave in the event of multiple births.
4. Paternity Leave: 15 calendar days for the father in case of normal birth. 20 calendar days in case of multiple births or a cesarean. Eight additional calendar days in the event of premature birth or conditions requiring special care. 25 days when the child is born with a degenerative, terminal or irreversible disease, or with a severe disability. In the event of the mother´s death during maternity leave, the father has the right to use the total number of days of leave that remained for the mother to use; the use of this leave is not cumulative.  
5. Adoption Leave: 30 calendar days of paid leave from the date the adopted child is received.
6. Leave due to hospitalization of a child: The parents are entitled to 25 days’ paid leave to care for hospitalized children or children with degenerative illnesses. This leave may be taken jointly or alternating.
7. Unpaid leave to care for children: Both mother and father have the right to voluntary and optional unpaid leave for up to 15 months in addition to their regular maternity/paternity leave to care for their child or children. This unpaid leave also applies in the case of adoption. Unpaid leave does not suspend or interrupt the duration of work for purposes of calculating the employee’s seniority.
8. Reduced special working hours for breastfeeding: during 15 months after the end of maternity leave, the working mother is entitled to paid breastfeeding leave for two hours per day (which is reduced from the regular working day). If the working mother is unable to exercise the right to breastfeed, the working father may use this leave under the same conditions. The adoptive parents have the same right; in their case, the 15 months begin 12 months after the adopted child's presumed date of birth and until the child reaches 18 months of age.

The Constitution of Ecuador and the Labor Code recognize the principles of freedom to work, non-waiverable workers’ rights and indubio pro operario, whereby the judge is obliged to rule in favor of the employee if there is doubt as to how to apply the legal rules.  

Based on these principles, an agreement with the worker that he will not provide his services for a given period and/or in a given area in the same activities once the employment relationship is over could be considered unconstitutional and illegal, unless the restriction is justified to protect trade secrets and confidential information.

Ecuadorian law only prohibits the worker from using and disclosing information, even when the employment relationship has ended when the prohibition on providing work services is justified to protect trade secrets and confidential information. In this case, it is understood that the period of restriction must be reasonable for the time during which the information has these characteristics.

The employment contract cannot be terminated if the employee refuses to sign a restrictive covenant.

The employment contract can only be terminated if the employee discloses secrets or information that harms the employer, without prejudice to bringing actions for damages and unfair competition. 

The termination of the employment contract must be declared by the Labor Inspector in the administrative procedure known as “visto bueno” (approval for dismissal).

The employer must enroll its employees (employees, workers) with the Ecuadorian Social Security Institute (“IESS”) from the first day of work and must comply with all other obligations in social security laws, including the payment of social security contributions. The IESS covers the employees’ pensions.

Contributions to the IESS are a percentage of the employee's compensation, as follows:

1. Paid by the employee: 9.45%
2. Paid by the employer: 12.5%
       
   The employee-paid contribution must be withheld by the employer from the employee’s compensation and paid to the IESS within the first 15 days of the following month, together with the employer´s contributions.

Employers are obliged to pay a retirement pension to workers who have continuously or interruptedly worked for 25 years in the same company. This retirement is separate from and independent of the worker's retirement pension paid by the IESS.

In no case can the monthly retirement pension paid by the employer exceed the average consolidated base salary of the last year, or be less than US$ 30 per month if the workers are only entitled to the employer's retirement pension, or US$ 20 per month if the workers are beneficiaries of a double retirement pension (i.e. retirement paid by the IESS and retirement paid by the employer at the same time).

The employer-paid retirement pension lasts for a lifetime (in the event of the retiree's death, the heirs are entitled to the pension for one additional year after the death).

Yes. The main mandatory economic benefits are the following:

a. Minimum consolidated basic salary

Under the Labor Code, at the beginning of each year, the Labor Ministry must set the value of the minimum consolidated basic salary which is the minimum monthly amount that an employee must receive for his regular work during regular workdays (8 hours per day, 40 hours per week).

In 2024, the minimum monthly consolidated basic salary is USD 460.

Notwithstanding the above, depending on each type of activity there are some higher minimum sectorial salaries established by sectorial committees every year.

b. Additional salaries:

(i) Thirteenth salary: All employees are entitled to this additional payment which is equivalent to the one-twelfth of the salary that an employee receives in a calendar year (not including profits, per diems, occasional subsidies, fourteenth salary or social benefits).

This additional payment must be paid each month unless the employee has asked the employer in writing to deliver it on an accrued basis, in which case the accrued payment must be made in December each year (before December 24).

The employee’s request for accrued payment must be submitted to the employer within the first fifteen days of January. The employee may change his decision in respect of the accrued monthly/annual payment within the first fifteen days of January only.

(ii) Fourteenth salary: All employees are entitled to this additional payment which is equivalent to one minimum consolidated basic salary for employees generally, as established for a given fiscal year.

This additional payment must be paid each month unless the employee has asked the employer in writing to deliver it on an accrued basis. In that case, the accrued sum must be paid by March 15 in the Coastal Region and the Galapagos Islands, and by August 15 in the Highlands and the Amazon Region.

c. Reserve fund: All employees are entitled to an amount equal to one month’s salary per year served, starting from the second year of employment.

This fund must be deposited each month with the Ecuadorian Social Security Institute (“IESS”) at a rate of 8.33% on the taxable amount (i.e. the employee’s salary for purposes of paying contributions to the IESS) or be delivered directly to the employee if requested.

d. Payment of a living wage:

An employee’s salary must, as a minimum, satisfy the annual parameters for the “living wage”. It is defined as a wage that covers the employee’s basic needs and those of his/her family and it corresponds to the cost of the standard basket of essential goods divided by the number of family members.

The referential value of the living wage for a fiscal year is set by the Labor Ministry in the first months of the following year.

When the employee’s salary does not cover a least the living wage then, in the first three months of the year, the employer must pay the mandatory additional economic compensation as a contribution in order to attain the living wage, which is calculated according to the parameters established in the law.

e. Employee profit-sharing:

Companies or employers must distribute 15% of their net profits each year to their employees. This percentage is calculated before establishing any reserves, social benefits or taxes or other participation.

Distribution will be made as follows:

(i)       10% delivered to the employees directly without taking into consideration the salary paid to each one of them.

(ii)      The remaining 5% is delivered to the employees in proportion to their family dependents.

The current law states that family dependents include children under the age of 18, disabled children of any age, the spouse, and the legally recognized domestic partner.

Family dependents must exist or arise during the fiscal year to which the profits correspond. 

The employees (and former employees) must justify the existence of their dependents to their employer (or former employer) by March 30 in the fiscal year when profits will be distributed.

Should the employee fail to justify his family dependents, “5% employee profit-sharing shall be distributed among all the employees and former employees in the same manner as the 10% employee profit-sharing.”

The distribution must be made by the labor association comprising the majority of the company’s employees and in proportion to the number of family dependents proven by the employee to the employer.  If no association exists, the distribution will be made directly.

Employees who have not worked for a complete year are entitled to a proportional share of the profits (according to their length of service).

Employee profit-sharing must be paid within 15 days after the date the company settles its profits, which must occur by March 31 each year.

The amount of profits received by the employee must be taken into account for his income tax payment calculation, but not for his IESS contributions.

Employees of ancillary services companies (surveillance/security, food, messenger and cleaning services) who have worked for the user company during the year when profits were obtained are also entitled to participate in 15% of the user company’s profits.

From the general 15% employee profit-sharing, employees engaged in hydrocarbon activities (exploration and exploitation) and mining activities can only receive 3%. This is because the remaining 12% must be paid to the State and to decentralized autonomous governments where the applicable hydrocarbon and mining activities take place, for use in social investment projects and territorial development projects in the relevant areas.

Small-scale mining employees may only receive 10% and the remaining 5% must be paid to the State and decentralized autonomous governments according to the same parameters mentioned above.

No. It is not permitted.

No. It is not possible.

There is no express rule in that regard.

However, the general rule obliges workers to comply with the employer's occupational health and safety regulations (duly approved by the Labor authority), so if the employer establishes in those regulations the mandatory vaccination against COVID-19 (with a proper justification related to the nature of the activities that the employer or the employee performs), the compliance with such obligation should be mandatory. Therefore,  only in justified cases (e.g. health, religious, etc.) the worker could be considered exempt from compliance.

Among other legal causes, employment contracts may terminate upon a favorable opinion of a Labor Inspector (an administrative procedure known as “Visto Bueno”) for not obeying the security, prevention and health measures established by law, regulations or a competent authority, or for disregarding medical prescriptions and opinions with no justification.

Nevertheless, in the current situation of COVID-19, and the application of the non-waiverable workers’ constitutional rights and indubio pro operario principle, the Labor Inspector could apply the law in the most favorable way for the worker and dismiss the employer’s request for termination of the employment contract.

Yes. If the employee refuses to return to the office without a proper justification, then the employer could request the Labor Inspector (through the administrative procedure of “Visto Bueno”) to declare the termination of the contract for legal cause.

Among other legal causes, employment contracts may terminate in the event of repeated and unjustified lateness, absence or non-attendance during more than three consecutive days without cause, provided that those cases occurred during a month-long period of work.