Anyone, whether a national or a foreigner, can establish a business in El Salvador. Apart from the requirements for the process of incorporating a company, the owners must be aware of and comply with the labor rights of employees, employers, collaborators, and suppliers.
Our partner, Raquel Santos, emphasizes the importance of labor law in establishing order within the professional environment. This ensures that everyone involved knows their rights, obligations, and how to maintain a suitable working atmosphere.
"Meeting labor obligations improves work efficiency and prevents misunderstandings within the company or, if they do arise, helps to handle them according to the previously agreed terms," Santos explains.
According to our Head of Labor and Migration Department, companies must be aware that the Ministry of Labor and Social Security is the state entity responsible for overseeing the application of labor laws, codes, and regulations.
When it comes to hiring new employees, our specialist affirms that labor regulations usually recognize the following types of contracts, regardless of the sector in which the company operates:
1. Indefinite term
2. Fixed-term
3. Professional services
4. Probationary period
5. Temporary replacements
"Regarding working hours, the standard working time for daytime shifts is 8 hours per day and 44 hours per week, while for nighttime shifts, it's 7 hours per day and 39 hours per week," comments our lawyer.
Regarding salary payments, our expert defines them in different categories: Commerce and Services, $365.00; Industry, $365.00; Maquila, Textile, and Garment Manufacturing, $359.00; Sugar Mills, $365.00; Coffee Benefits, $272.00; and Agricultural Sector, $242.00.
"In the private sector, payrolls are typically issued at the end of each month, while in private companies, it's every 15 days. However, some private organizations may deposit payments on a monthly basis," mentions our partner.
In terms of vacations and leave, Santos explains that after completing one year of work, an employee is entitled to 15 days of paid vacation. In the case of pregnant women, the employer is obliged to grant 16 weeks of maternity leave, 10 of which must be taken after childbirth.
"Employees can request sick leave based on medical recommendations. Bereavement leave is granted in the event of the loss of a parent, child, partner, or another dependent person," emphasizes Santos.
On the other hand, according to the labor legislation of El Salvador, deductions are made from employees' salaries for both Social Security and the National Pension Fund (AFP).
"The employer's required contribution percentages are: ISSS, 7.50%; and AFP, 8.75%. The employee must contribute 3% to ISSS and 7.25% to AFP."
Additionally, our partner lawyer states that any employee who has provided at least one year of continuous service is entitled to an annual bonus, while workers who have served for less than a year are entitled to a bonus proportional to their length of service.
For further inquiries on this and other topics, you can contact us through our social media or by visiting our offices located at Cuscatlán Street, #4312, Escalón District, San Salvador, El Salvador.
- Written by the Torres Legal Team.