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Monday, November 4, 2013

Good intentions, bad law. More about Mandatory Benefit Regulations for Maids in Ecuador. November 2013.


quote
DOMESTIC HELP
A new law was enacted with a legal requirement to have a contract with domestic help and to pay into their version of Social Security.   Here are the legal obligations:
http://www.ecuadorlegalonline.com/laboral/obligaciones-derechos-como-empleador-y-empleado/

Here is a sample contract:
http://www.ecuadorlegalonline.com/modelos/contratos/modelo-contrato-trabajo-jornada-parcial-permanante-servicio-domestico/
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Here are the sample Q & A:
http://www.ecuadorlegalonline.com/laboral/preguntas-sobre-trabajo-y-empleo/

See # 2 and 12, 13
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The underground economy is thriving and strong with many folks paying cash for a few hours work every other week, in most cases.   But they have absolutely no protection under the law other than denial and a "he says - she says" defense if a disgruntled, hurt, pregnant or sick casual worker decides to sue them for not providing the IESS benefits.

Some Ecuadorian business friends also confirm that 3 months full-time employment is considered a trial period and that after 3 months it is almost impossible to fire any type of employee, which is borne out in the following information:

NOTE that, in the case of domestic workers, the probation period is only 15 days (visits)!

This was a very scary situation!   We had heard of employers being sued by a pregnant domestic for $50,000, and settling for a large sum, plus fines, after being threatened with the loss of their home.
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You not only have to contribute 11.15% of their salary to IESS, but you have to pay them a Christmas Bonus plus Holiday Pay and then later an 8.33% reserve fund.  You may even have to pay for pregnancy leave, 2 weeks before and 10 weeks after.   Nobody want to skirt the law but the method of doing all this appeared way too complicated.   Who wanted to spend $300 or so on a lawyer to set up fancy contracts for a minimal part-time worker who may leave you the following week?   
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IMPORTANT  The word from a labor lawyer that we contacted is that the simplest way to avoid this problem altogether is to have your cleaning lady get a "Registro Unico De Contribuyentes Personas Naturales" (R.U.C.) and then to submit an invoice (clearly stating this R.U.C. number) for payment every time she comes to work at your house.  This ensures that she is seen as self-employed and is adhering to all laws here in Ecuador.  The choice to apply for IESS Benefits is now on the shoulders of the Domestic
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Part one: Good intentions, bad law. Medical malpractice in Ecuador. October 2013.
http://dayinquito.blogspot.com/2013/10/good-intentions-bad-law-part-one.html
Part two: Good intentions, bad law. Mandatory Benefit Regulations for Maids in Ecuador. November 2013.
http://dayinquito.blogspot.com/2013/11/good-intentions-bad-law-mandatory.html



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Rental in Quito, for tourists and expats.
3 bedroom, 1 bath remodeled
Colonial Quito, furnished apartment for rent.
For booking, pictures and more info
http://quitorental2.blogspot.com