Law to promote the violet economy

Boletín laboral de CorralRosales - Foto edificio con cristalera

Below, a summary of the most important matters regulated in the Law to Promote the Violet Economy enacted by the Official Gazette Supplement 234 dated January 20, 2023.

1.    LABOR Aspects:

–    The working week for women may be freely distributed in 5 days, without exceeding 40 hours a week or more than 10 hours a day.

–    Companies with 25 or more employees must promote plans and working conditions that prevent sexual harassment in the workplace.

–    Companies with 50 or more employees must prepare and implement a plan for equal treatment, equal opportunities, and non-discrimination in the workplace. This equality plan must be registered with the Ministry of Labor. Equality plans must be submitted to the Ministry of Labor after 1 year, i.e., January 20, 2024.

–    The Ministry of Labor will award a badge to the companies that demonstrate:

i.    Balance in all jobs between women and men.
ii.    Adoption of the equality plan.
iii.    Issuance of non-sexist advertising of the company’s products or services.
iv.    Other measures aimed at achieving gender equality.

–    The breastfeeding period was modified and will last 12 months from the delivery date.

–    The working day of the nursing mother will last 6 hours according to the worker’s needs.

–    The 12 weeks paid maternity leave may be used exclusively by the mother, or shared with the father, up to 75% of the period. The modality will be determined by mutual agreement between the father and the mother, must be notified to the employer prior to the beginning of the leave and cannot be modified.

–    The percentage of insertion of interns will include students in dual training. If female individuals are included in this modality, the percentage of inclusion of interns may be increased by an additional 0.5 percentage points.

2.    TAX Aspects:

As a tax benefit, the taxpayers will be able to deduct up to an additional 140% of the remunerations and social benefits paid for the creation of new jobs for female workers, according to their time of permanence:


If the employment relationship is terminated, the benefit may continue to apply if the job vacancy is filled by another female worker under the same salary and contractual conditions.

The benefit may be applied up to 3 fiscal years if the number of new job openings for women exceeds the following percentages:

The benefit may not be accumulated with other additional deductions granted for the increase of employment contemplated in article 10 numeral 9 of the Internal Tax Regime Law.
3.    CORPORATE Aspects:

It is established that all entities subject to the Companies Law must integrate to their boards at least one woman for every three members of such corporate bodies.

Edmundo Ramos

Specialist in Labor Law
Edmundo Ramos, partner at CorralRosales
eramos@corralrosales.com
+593 2 2544144

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NOTE: The above text has been prepared for informational purposes. CorralRosales is not liable for any loss or damage incurred as a result of acting or failing to act on the basis of the information contained in this document. Any additional determined situation requires the specific opinion and concept of the firm in Quito / Guayaquil, Ecuador.

CORRALROSALES

Suspension of workday on November 3rd

Suspensión de la jornada de trabajo el 03 de noviembre - CorralRosales - Abogados Ecuador

On October 15th, 2021, the President of the Republic issued the Executive Decree 222, by which the following was established:

1.    To suspend of working day corresponding to November 03, 2021.

2.    The recovery of the working day for the private sector will be made by mutual agreement between employers and workers.

3.    During November 01, 02 and 03, 2021, the entities and agencies of the public sector shall guarantee the provision of public services.

Edmundo Ramos

Specialist in Labor Law
Edmundo Ramos, socio de CorralRosales
eramos@corralrosales.com
+593 2 2544144

Marta Villagómez

Specialist in Labor Law

Marta Villagómez, asociada de CorralRosales
mvillagomez@corralrosales.com
+593 2 2544144

New regulations for employment termination with cause procedures known as “visto bueno”

New regulations for employment termination with cause procedures known as "visto bueno" - CorralRosales - Lawyers Ecuador - Latam

On August 13th, 2021, the Ministry of Employment, through Ministerial Agreement MDT-2021-219, issued new regulations governing the procedure to be followed for the approval of Employment Termination with Cause (known as and hereinafter, “Visto Bueno”). The new process will be effective as of September 24, 2021.

The main features of the new procedure are as follows:

1.    Jurisdiction: The competent employment inspector to handle requests for Visto Bueno is that of the territorial circumscriptions of the place where the employment agreement was executed or that of the place of the employees’ domicile.

2.    Appearance: The parties may appear in person or by proxy, accompanied by a defense attorney, who may act by legal proxy or by simple written authorization.

3.    Notifications:  The Visto Bueno request must be notified to the employee by ballot delivered to his/her workplace or domicile. The latter may be received by an employee’s relative or be posted on the door of the domicile in case there is no one to receive it, or if the employee refuses to do so.

If it is impossible to locate the employee, he/she may be notified by e-mail, provided that there is a document whereby the employee states its clear and express acceptance to be notified by such mean.

Notification by the press: If it is not possible to notify the employee by any of the means described above, it may be done through a single publication in one of the newspapers with the largest circulation in the place where the Visto Bueno process is carried out. For this purpose, the employer must carry out a statement before a Public Notary that he/she does not know the employee’s domicile. After 20 days since the publication, the employment inspector shall set a date and time for an investigation hearing.

4.    Suspension of the employment relationship: Before or after  filing  the Visto Bueno the employer may request the suspension of the employment relationship. To this end, a certified copy of the employee’s payroll corresponding to the last full monthly remuneration must be attached and the relevant amount must be deposited in the account designated by the Ministry of Employment to this effect.

5.    Response to the Visto Bueno request: The employee shall answer to the Visto Bueno request within 2 working days of being notified with the procedure. Failure to do so will result in the inspector continuing with the proceedings in absentia.

6.    Investigation hearing: Once the term to submit the response to the Visto Bueno´s request has lapsed, the inspector shall, within the following 3 working days, set a date and time for the investigation hearing.

The investigation hearing may be held at the inspector’s office or, if necessary, at the place where the facts leading to the Visto Bueno occurred.

The inspector may, exceptionally, and for the purpose of clarifying the facts of the dispute, suspend the investigation for up to 3 days. The inspector may not formally require public or private entities in order to obtain evidence.

Once the investigation hearing has concluded, the inspector will have 3 working days to issue a resolution.

Specialist in Labor Law

Marta Villagómez, associate at CorralRosales
mvillagomez@corralrosales.com
+593 2 2544144

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CORRALROSALES

Living wage 2020

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On March 18th, the Labor Ministry -by Ministerial Agreement MDT-2021-087- set the living wage for 2020 on US$447,41 monthly and stablished the payment procedure.

On those cases, that living wage compensation is applicable, employer shall pay it to employees no later than March 31st, 2021.

For living wage payment, “profit” shall be understood as the value declared by the employer as accounting profit deducting: (i) employees profit  sharing, (ii) tax  or advance payment fixed for the fiscal year declared, and (iii) statutory reserve.

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CORRALROSALES

Reform to General Guidelines for Internships

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Labor Ministry through Ministerial Agreement MDT-2021-042, reformed the “General Guidelines for Internships”.

The Agreement establishes that students under a dual training modality may be considered for the mandatory percentage of interns.

Students under dual training are those whose professional training process occurs in educational environments and production or real services environments.

According to the Internship Law, for every 100 regular employees, employers are ordered to hire interns in a number equal to 4% of their employees who hold a professional degree. Consequently, the obligation to hire interns is subject to 2 conditions: (i) company has 100 or more employees; and (ii) at least 4% of such employees hold a professional degree.

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DISCLAIMER: The previous text has been prepared for informational purposes. CorralRosales is not responsible for any loss or damage caused as a result of having acted or stopped acting based on the information contained in this document. Any additional determined situation requires the specific opinion and concept of the firm.

CORRALROSALES

Special labor regime for private higher education institutions academic staff

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The Labor Ministry by Ministerial Agreement MDT-2020-286 regulated the special labor agreement for private Higher Education Institutions academic staff:

– Scope: Mandatory implementation to hire academic staff on private Higher Education Institutions.

– Term for Regular Staff:  Up to 1 year (continuous or discontinuously) renewable up to 2 years. A 90-day trial period may be agreed.

– Term for Non-Regular Staff: Up to 1 year (continuous or discontinuously). The agreement may be renewed as many times as necessary. A 90-day trial period may be agreed.

– Weekly working day: Up to 40 hours per week, that may be distributed in no more than 6 days a week. A noninterrupted rest of 24 hours per week is guaranteed.

– Special leave regime: The Higher Education Institutions may grant, at the employee´s request, a special leave with or without payment.

If the leave is without payment, the employee is not entitled to labor and social benefits. The employment relationship is suspended; therefore, no seniority will be generated during it.

– Termination of the agreement: The employment relationship ends once the term has concluded, without any other formality.

– Termination for cause: Under Labor Code provisions to terminate an employment relationship with cause, prior Labor Ministry authorization (“Visto Bueno”), the following definitions shall be included:

  • Indiscipline: Breach of terms to return in cases of licenses or mobility.
  • Ineptitude: If employee obtains results below the minimum for 2 consecutive times or 3 times throughout his/her career. The term for request the Labor Ministry authorization will run from the date on the employer’s decision to separate the employee.

– SUT´s registration: Within a period of 15 days upon its execution.

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CORRALROSALES

Unified basic salary and minimum wages for economic sectors 2021

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The Ministry of Labor by Ministerial Agreements: MDT-2020-249 of November 30, 2020 and MDT-2020-282 of December 22, 2020, resolved to maintain for 2021, the same values of the unified basic salary (“SBU”) and the minimum wages for economic sectors of the year 2020.

The Authority underpins its decision considering that the registered inflation at the end of 2020 was negative (-0.73%), therefore, an increase in minimum wages for 2021 is not justified.

In this regard, the SBU for 2021 is $400.00.

Current regulations provide that in no case will a SBU be set lower than that of the previous year.

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TAG Alliances – Ecuador: Guidelines for the Application of the Law on Humanitarian Support

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DETAILS

DATE: 21-07-2020

MEDIA: TAG Alliances

“The alliance of professional services firms TAG Alliances, of which CorralRosales is a member, has echoed our labor bulletin on the guidelines to apply the new labor regulations contemplated in the “Organic Law of humanitarian support to combat the health crisis arising from COVID-19”, issued last July 15 through ministerial agreements.

According to the agreement to preserve labor sources, the employer must update in the SUT – Humanitarian Law module – the employee’s data in accordance with the agreement signed, including its term. The agreements may be registered as of July 31, 2020. Employers who have signed agreements with their employees prior to the issuance of Agreement 132, will have 15 business days to register the information.

Another agreement reached is in the emerging special employment agreement. The employer must register in the SUT the information about the employee and the agreement, within 15 days from the beginning of the labor relationship. As in the previous case, they shall be able to register as of July 31 and will have 15 working days to register the information if the employers signed agreements with their employees prior to the issuance of Agreement 132.

Regarding the working-day reduction, it may be implemented when faced with situations of unforeseen circumstances or force majeure in the terms provided for within the Civil Code. The conditions and characteristics regulated to be able to take advantage of this reduction include the time of reduction, the term, the remuneration, the contributions to the IESS, the labor benefits, the compensations, the exceptions, the registration in the SUT and the notification. To read the news about our bulletin, click hereSi quiere leer la noticia sobre nuestro boletín, pulse aquí

In CorralRosales we publish a portal in which we inform you about all the legislative updates approved due to the health crisis caused by the Covid-19, such as the Law of Humanitarian Support. Click here to view it.

Teleamazonas – The Ministry of Labor issued the agreements on labor related matters

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DETAILS

DATE: 16-07-2020

CORRALROSALES IN THE NEWS: 

-Edmundo Ramos

MEDIA: Teleamazonas

Television network Teleamazonas conducted an interview with our partner Edmundo Ramos as an expert on labor practices to find out his opinion on the labor changes that began to take place since last March, following the arrival of the health crisis caused by Covid-19. These changes shall be implemented, after the Ministry of Labor issued the agreements with the guidelines for the application of the registration of the types of work and the emerging working-day reduction.

“These agreements specify the procedure to be followed and the deadlines in those cases where employers have already implemented these alternatives,” explained our Partner.

Regarding compensations, within the interview it was clarified that in the event of layoff during the emerging working-day reduction, these compensations, payments and other legal benefits will be calculated based on the salary received by the employee before the reduction.

These guidelines are based on what is stated in the Humanitarian Support Law approved by the National Assembly. In an example given in the interview, it is explained that the emerging contract duly signed shall be registered by the employer in the “Single Work System” (SUT) within fifteen days from the date of execution.

“In the case of emerging working-day reduction, it is established that this reduction shall not be applied if another of the reduction formulas contemplated by law is in force at the time,” adds Ramos.

If you want to see the complete interview, click here

Click here if you want to see the guidelines for the application of the Humanitarian Support Law.

Click here for our information document on the Humanitarian Support Law.

Guidelines for the application of the Law on Humanitarian Support

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On July 15th, the Ministry of Labor (hereinafter “MdT”) through Ministerial Agreements MDT-2020-132 and MDT-2020-133, issued guidelines for the establishment of the new labor categories contemplated in the “Organic law on humanitarian support to combat the health crisis arising from COVID-19”.

1. Preservation of labor sources agreements (MDT-2020-132 Agreement)

The employer must update in the online platform SUT – Humanitarian Law section – the employee’s information in accordance with the signed agreement, including its validity.

Agreements may be renewed once, for the same period for which they were originally entered.

Note: Agreements may be registered from July 31st, 2020. Employers who signed agreements with their workers prior to the issuance of Agreement 132, will have 15 working days to register the information in the online platform SUT, that is, until August 21st, 2020.

2. Emerging special employment agreement (Agreement MDT-2020-132)

The employer must register in the online platform SUT the information about the employee and the employment agreement, within 15 days from the beginning of the employment relationship.

Note: Employment agreements may be registered from July 31st, 2020. Employers who signed such agreements prior to the issuance of Agreement 132, will have 15 working days to register the information in the online platform SUT, that is, until August 21st, 2020.

3. Emerging working-day reduction (Agreement MDT-2020-133)

The employer may implement the emerging working-day reduction when facing situations of unforeseen circumstances or force majeure in the terms provided for in Article 30 of the Civil Code.

Conditions and characteristics

  • Reduction: The employer may reduce the working hours by up to 50%, prior authorization from the Ministry of Labor.
  • Term: Up to 1 year, renewable only once for an equal term. After the expiration of the term, the employee’s salary will be the same he/ she received before the measure was applied.
  • Salary: It may not be less than 55% of the salary in force before the reduction and must be proportional to the hours worked.
  • Contributions to IESS: Must be based on the salary paid.
  • Labor benefits: The thirteenth and fourteenth remunerations, reserve fund, vacations and profits shall be paid in proportion to the working-day and the income received by the employee.
  • Compensation: In case of layoff, the compensation will be calculated based on the salary received before the reduction.
  • Exceptions: Employees whose working-day have been reduced under the provision of article 47.1 of the Labor Code may not have this measure applied to them while the previous reduction remains in force.
  • Registration in the SUT: Update the worker’s data in accordance with the new working conditions, including their validity. The lack of registration will be sanctioned according to the Labor Code (US$200 fine), as well as the Constitutional Mandate 8, that is, fines from 3 to 20 minimum statutory wages (currently, from US$1,200 to US$8,000).
  • Notification: The employer must notify the employee by any means of the implementation of the measure and its conditions.

Note: Employers who have applied the working-day reduction before the issuance of Agreement 133, will have 15 working days to register the information in the online platform SUT, that is, until August 5th, 2020.

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DISCLAIMER: The preceding text has been prepared for general information purposes only. CorralRosales is not responsible for any loss or damage caused as a result of having acted or stopped acting based on the information contained in this document. Any given situation requires the specific opinion and view of the firm in Quito / Guayaquil, Ecuador.

CORRALROSALES