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Ecuador - Compensation & Benefit Legislation

CAPITAL

Quito

 

CLIMATE

Tropical climate along the coast, becoming cooler inland at higher elevations. Tropical climate in the Amazonian jungle lowlands.

 

LANGUAGES

Spanish (official), and Amerindian languages (especially Quechua).

 

LEGAL SYSTEM

Ecuador’s legal system is based on civil law system. Ecuador has not accepted compulsory ICJ jurisdiction.

 

CURRENCY

US dollar (USD)

NOTE: on March 13, 2000, Ecuador’s National Congress approved a new exchange system whereby the US dollar was adopted as the main legal tender in Ecuador for all purposes.

 

ECUADOR - COST-OF-LIVING

ERI's Relocation Assessor is a recommended source for cost-of-living data.

 

ECUADOR - EMBASSY/CONSULATES

U. S. Embassy at Quito

Avenida 12 de Octubre y Avenida Patria

Quito, Ecuador

Telephone: [593] (2) 562-890

Fax: [593] (2) 502-052

http://www.usembassy.org.ec/

 

Embassy of Ecuador at Washington D.C.

2535 15th Street N.W.

Washington D.C. 20009

Telephone: (202) 234-7200

Fax: (202) 667-3482

http://www.ecuador.org/

 

ECUADOR - HOLIDAYS

ECUADOR - LEAVE

Annual Leave: Minimum 15 days vacation each year.

 

Maternity Leave: 12 weeks – 100% of pay (paid by employer – 25% and social security – 75%).

 

ECUADOR - MINIMUM AGE

The law prohibits boys younger than age 12 and girls younger than age 14 from working, except in special circumstances such as apprenticeships, domestic service, or in cases of "need," which requires permission from the Ministry of Labor. It requires children between the ages of 12 (boys) or 14 (girls) and 18 years of age to have the permission of their parent or guardian to work.

 

The law also prohibits children between the ages of 14 and 18 years from working more than 7 hours per day or 35 hours per week, and it restricts children below the age of 14 to a maximum of 6 hours per day and 30 hours per week. The law prohibits children between the ages 14 and 18 from working at night, working on the high seas, and performing hazardous work.

 

(Section 6.d. Acceptable Conditions of Work, Ecuador – Report of Human Rights Practices, 2001, U.S. Department of State.)

 

ECUADOR - MINIMUM REMUNERATION

As of September 2001, the minimum wage plus mandated bonuses provided a gross monthly compensation of approximately $118, or 75 cents per hour in the case of contract workers.

 

(Section 6.e. Acceptable Conditions of Work, Ecuador – Report of Human Rights Practices, 2001, U.S. Department of State.)

 

ECUADOR - REMUNERATION

ERI's Geographic and Salary Assessors are recommended sources for international remuneration covering 189 countries.

 

ECUADOR - REPORT OF HUMAN RIGHTS PRACTICES (2001, U.S. DEPARTMENT OF STATE)

Section 6 Worker Rights

 

a. The Right of Association

 

The Constitution and Labor Code provide most workers with the right to form trade unions. Members of the police, the military, and public sector employees in nonturnover producing entities are not free to form trade unions. The 1991 Labor Code reforms sets the number of workers required for an establishment to be unionized at 30, which the International Labor Organization's Committee on Freedom of Association considers too stringent a limitation at the plant workers' council level. Although the Congress debated additional labor reforms, labor law was in flux during the year because the Constitutional Court ruled in July that some recent labor legislation was unconstitutional. The court's ruling nullified several articles that the Government stated provided flexibility to employers, but that some observers claimed undercut constitutional protections of worker rights.

 

While employees of state-owned organizations enjoy rights similar to those in the private sector, the law technically prevents the majority of public sector employees from joining unions or exercising collective bargaining rights. However, most public employees maintain membership in some labor organization.

 

The labor market is highly segmented, with a minority of workers in skilled, usually unionized, positions in state-run enterprises or in medium-to-large industries. Approximately 12 percent of the work force is organized. Most of the economically active population is employed in the agricultural sector or the urban informal sector; the vast majority of these workers are not organized.

 

Although the labor confederations are politically independent, the two largest single labor unions, the National Union of Educators (UNE) and the Union of Social Security Workers, are allied with the Democratic Political Movement, a communist party. There are four large labor confederations, called centrals. None of the main labor centrals is connected firmly to any one political party, and there are no ties between the Government and any labor union.

 

There are few restrictions on the right of workers to strike, although a 10-day cooling-off period is required before a strike can be declared. The Labor Code revisions limit solidarity strikes or boycotts to 3 days, provided that the Labor Ministry approves them. In a legal strike, workers may take possession of the factory or workplace, thus ending production at the site, and receive police protection during the takeover. The employer must pay all salaries and benefits during a legal strike; the Labor Code protects strikers and their leaders from retaliation. The law does not provide public workers with the right to strike; however, there were frequent "illegal" strikes. The Government occasionally takes action against striking public workers. For instance, during the year, the Government did order striking public health, civil registry, and prison workers and guards back to work.

 

There were several significant strikes during the year, mainly in response to government austerity measures. They involved public sector employees such as medical, prison, and registry workers. Indigenous groups also protested during the strikes. In January Quito bus drivers struck briefly. Police in Quito used tear gas in January, February, and July to repel demonstrators who sought access to the city center. On July 2, public health workers, including doctors, nurses, and paramedics went on strike to demand higher wages and better working conditions. On July 26, police blocked a protest strike by health workers using tear gas. Four persons were injured, and 36 babies at a nearby hospital were affected by the tear gas, 2 of whom allegedly died as a result. In August the Ecuadorian Bishops Conference brokered a deal with the doctors' union and the Government. The Government ordered the nurses and other health care workers back to work and promised to raise salaries in 2002.

 

Unions may form freely and join federations or confederations, and three of the large labor centrals maintain international affiliations.

 

b. The Right to Organize and Bargain Collectively

 

The Labor Code requires that all private employers with 30 or more workers belonging to a union must negotiate collectively when the union so requests. Collective bargaining agreements cover only one-quarter of the approximately 12 percent of the work force that is organized. In March 2000, a labor law allowed businesses to hire workers on "individual contracts," but the practice did not become prevalent because Congress began a review of the law and has not clarified its status.

 

The Labor Code streamlined the bargaining process in state enterprises by requiring workers to be represented by only one labor union. It prohibits discrimination against unions and requires that employers provide space for union activities upon the union's request. The law does not permit employers to dismiss a worker without the express permission of the Ministry of Labor, whose rulings are not subject to judicial review. If the Ministry of Labor rules that a dismissal is unjustified, it can require the employer to pay large indemnities or separation payments to the worker, although the reforms set a cap on such payments. A fired worker is eligible for reinstatement and in general would not be blacklisted at other companies. Workers generally are protected against antiunion discrimination only by pressure from the union. The Labor Code provides for resolution of labor conflicts through an arbitration and conciliation board which consists of one representative of the Ministry of Labor, two from the union, and two from management.

 

The 1990 Maquila Law permits the hiring of temporary workers for the maquila (in-bond processing for export) industries only. While there is no express prohibition on association rights in the Maquila Law, in practice it is difficult to organize temporary employees on short-term contracts. Since temporary workers are not recognized by the Labor Code, they do not enjoy the same level of protection offered to other workers. The maquila system allows a company and its property to become an export-processing zone wherever it is located. Many such "zones" have been established; most are relatively small and are dedicated to textiles and fish processing.

 

c. Prohibition of Forced or Compulsory Labor

 

The Constitution and the Labor Code prohibit compulsory labor, and there were no reports of it in general. There have been reports of children forced into prostitution, and there was one report that children were trafficked to Uruguay for forced labor.

 

d. Status of Child Labor Practices and Minimum Age for Employment

 

The law prohibits boys younger than age 12 and girls younger than age 14 from working, except in special circumstances such as apprenticeships, domestic service, or in cases of "need," which requires permission from the Ministry of Labor. It requires children between the ages of 12 (boys) or 14 (girls) and 18 years of age to have the permission of their parent or guardian to work. The law also prohibits children between the ages of 14 and 18 years from working more than 7 hours per day or 35 hours per week, and it restricts children below the age of 14 to a maximum of 6 hours per day and 30 hours per week. The law prohibits children between the ages 14 and 18 from working at night, working on the high seas, and performing hazardous work. In practice the Ministry of Labor and the Minors’ Tribunals fail to enforce child labor laws, and child labor is prevalent. Despite the economic recovery over the past 2 years, the problem has not improved substantially, in part due to the emigration abroad of many parents who have left their children behind. Urban child labor has increased with the migration of the rural poor to the cities. A 2000 UNICEF report estimated that almost half of the children between the ages of 10 and 17 worked. A 1999 report based on a joint national and World Bank study found that 45 percent of children between the ages of 10 and 17 worked at least part-time. Among children aged 10 to 11, who cannot work legally, 28 percent worked at least part-time nationwide. In rural areas, young children often must leave school at an early age to help out on the family's plot of land. More than 60 percent of all children live in rural areas and do unpaid agricultural work for their families. The Ministry of Labor does not have adequate resources to investigate exploitative child labor practices.

 

The Ministry of Labor has designated a "Social Service Directorate" to monitor and control child labor in formal sector businesses such as factories. In some instances the Directorate has applied sanctions, but in others, it merely has helped to provide documents to child workers. In urban areas, many children under 12 years of age work in family-owned "businesses" in the informal sector, shining shoes, collecting and recycling garbage, or as street peddlers. Others are employed in commerce, messenger services, domestic service, and begging. Children as young as 5 or 6 years often sell newspapers or candy on the street to support themselves or to augment family income.

 

ILO Convention 182 on the worst forms of child labor, which the Government ratified in July 2000, entered into effect on September 19.

 

Child prostitution is a problem, and there have been cases reported of children being forced into prostitution. There was one report that children were trafficked to Uruguay for forced labor. The law prohibits forced or bonded labor by children, and there were no other reports of such practices.

 

e. Acceptable Conditions of Work

 

The Ministry of Labor periodically sets the minimum wage in consultation with the Commission on Salaries, but Congress also may adjust it. As of September, the minimum wage plus mandated bonuses provided a gross monthly compensation of approximately $118, or 75 cents per hour in the case of contract workers. The statutory minimum wage is not adequate to provide a decent standard of living for a worker and family. Most organized workers in state industries and formal sector private enterprises earned substantially more than the minimum wage and also received other significant benefits through collective bargaining agreements. However, the majority of workers work in the large informal and rural sector without recourse to the minimum wage or to legally mandated benefits.

 

The Ministry of Labor has the principal role in enforcing labor laws and carries this out through a corps of labor inspectors who are active in all 22 provinces. The Labor Code provides for a 40-hour workweek, a 15-day annual vacation, a minimum wage, and other employer-provided benefits, such as uniforms and training opportunities. In March 2000, reforms to the labor law gave nominally greater flexibility to employers for hiring part-time workers; however, this legislation was affected by a Constitutional Court decision related to worker’s retirement benefits. The impact of the Court's decision remained to be clarified at year's end.

 

The Labor Code also provides general protection for workers' health and safety on the job. However, a worker may not leave the workplace of his own volition, even if there is a hazardous situation. The worker is allowed to request that an inspector from the Ministry of Labor come to the workplace and confirm the hazard; that inspector then may close down the workplace. Response time for inspectors ranges from a few days in major cities to much longer in the countryside.

 

The Government enforces health and safety standards and regulations through the Social Security Institute. In the formal sector, occupational health and safety is not a significant problem. However, there are no specific regulations governing health and safety standards in the agricultural sector and in practice there is no enforcement of safety rules in the small mines that make up the vast majority of the mining sector. During the year, at least three fatalities were reported due to accidents in the mines.

 

f. Trafficking in Persons

 

A misdemeanor law specifically addresses trafficking in persons, and other laws could be used to prosecute traffickers; however, there were reports of trafficking.

 

In May the authorities in Uruguay discovered a small child-labor ring. Traffickers had promised seven Ecuadorian youths and one young adult, as well as a Colombian, a better life: however, once in Uruguay the traffickers forced them to carry heavy packages under difficult conditions for 80 hours a week. In addition to being provided with an inadequate diet, the youths were denied proper medical care and one girl had to have her finger amputated. The Uruguayan police charged the ringleaders with violating the child protection and labor laws, and the children were placed in temporary shelters. There also were reports that children have been trafficked to Venezuela and Spain for forced labor, and that Ecuadorians are trafficked to Guatemala and the United Kingdom.

 

There also were many reports of persons, including non-Ecuadorians, being smuggled illegally from the country to the United States through Central America in which trafficking sometimes was suspected. In the early part of the year, trafficking was suspected in a case involving Ecuadorian children begging on the street in Uruguay who were being exploited by a ring of adult criminals.

 

A misdemeanor law specifically prohibits trafficking and provides for penalties from 6 months to 3 years in prison, as well as fines. The Migration Law and the Penal Code provide for the imposition of sanctions on suppliers of false documents for purposes of travel or work. Other laws dealing with kidnaping, labor, occupational safety, and slavery apply to and provide sanctions for trafficking in persons. In June 2000, Congress amended the Criminal Code to strengthen sentences for furnishing or utilizing false documents and for alien smuggling. Alien smugglers or traffickers can receive sentences from 3 to 6 years' imprisonment; the penalties range from 6 to 9 years if victims are injured, and a penalty of up to 12 years may be imposed if a death occurs. The law specifically exempts smuggling victims from prosecution. During the year no penalties were applied.

 

ECUADOR - SOCIAL SECURITY

Social Security Office of International Programs:

 

http://www.ssa.gov/SSA_Home.html

 

ECUADOR - STANDARD WORKWEEK

The Labor Code provides for a 40-hour workweek.

 

(Section 6.e. Acceptable Conditions of Work, Ecuador – Report of Human Rights Practices, 2001, U.S. Department of State.)