- Overview: El Salvador
- Global HR Compliance
- Global PEO and payroll
- Work permit for hiring expats via PEO
- Contractor vs. employee: which is better?
Global HR Compliance in El Salvador
If you hire international workforce, or plan to hire, then Hiring and Firing Workforce in El Salvador Guide below will help you understand the nuances of labor legislation in the country.
Companies hire international workforce for various reasons but in most cases they are:
- entering the foreign markets to sell company products. To do so, the company hires sales representatives who would represent their product and sell it to their local client base.
- hiring a global talent with unique skills that is unavailable in the local market or costs the company less than the talent with similar skills hired in the home country.
Before entering a certain foreign market or engaging a global talent, it is crucial for the company to understand how it can make local hires and reward its workers on a monthly basis. Growing companies often face a challenge of paying benefits and bonuses to the commission-based independent sales representatives they are working with.
If you intend to hire and pay your foreign workforce in full compliance with labor laws and regulations of El Salvador, then the Global Employer of Record service from Acumen International may be the best way for you to go. We are an International PEO company and we specialize in global employment, meaning we can employ your employees in El Salvador and act as their legal employer on your behalf. We will payroll your foreign workforce monthly and provide benefits to them through our global network so you don’t have to set up your own legal entities there.
We are experts in global workforce employment in , and our goal is to become your single provider. Instead of working with numerous local staffing agencies and legal advisors, Acumen International can solve your global business challenges and save you time, costs, and resources.
Our team of English-speaking professionals frees you from working through language nuances. Acumen International works 24/7 and can assist you whenever you need, regardless of time zones. Our goal is to create tailored labor solutions for you that are managed legally and in full compliance with the local employment laws.
With our knowledge and deep understanding of local nuances, you easily satisfy your need for skilled professionals in your global industry. With our qualified local partners, you can trust that your global workforce satisfies all local tax, social security, and immigration requirements in El Salvador.
See the guide below for a general overview of labor rules and regulations in El Salvador or contact us if you need to employ workers in El Salvador or would like to get more details.
Hiring and Firing Workforce in El Salvador Guide
# Employment contracts
There is no legal requirement for a contract to be in writing in order to be valid. The existence of an employment agreement can be proved by evidence such as witnesses, letters, payroll and payments. However, every employer is required to provide each employee with a written statement of the particulars of certain terms of the agreement, not later than 8 days after the beginning of the employee’s employment.
All employment relationships are eventually contractual in nature, whether or not the terms have been reduced to writing. Contracts of employment (whether express or implied) exist in several different forms: fixed term, variable, full-time or part-time. The compulsory terms apply regardless of the type of contract contemplated. There are laws against discrimination which prevent employees from being treated less favourably than other employees because of working part-time or working on a fixed term contract.
# Minimum (Statutory) Employment Rules and Regulations in El Salvador
# Hours of work:
The employees shall work a maximum of 44 hours per week, or 39 hours per week for night shift workers.
# Probation period:
When engaging new employees, the first 30 days will be a probation period. Within this period either party may terminate the contract without reason.
# Annual leave:
Employees are entitled to a minimum of 15 days paid vacation per year. There are also various holidays, compulsory daily and weekly rest periods which have to be observed. An example of daily rest period would be the lunch break. El Salvador’s Labour Code in article 166 stipulates that this break shall last half an hour at least. There is no other daily rest obligations established by statute.
# Parental leave:
A limited number of “family-friendly” rights exist, including paid maternity leave, paid breastfeeding leave, time off for dependents and part-time working. Employees are not entitled to paid paternity leave, paid adoption leave, paid parental leave and paid “honey-moon” leave. It is for the employer to grant such rights.
# Sick leave:
There are no mandatory requirements relating to illness and disability.
# State minimum salary:
El Salvador’s minimum wage rate is US$242.40 a month for retail employees; US$237.00 for industrial laborers; US$202.80 for apparel assembly workers; and US$113.70 for agriculture industry workers. El Salvador’s minimum wage was last changed in January 01, 2014.
# Employee dismissal:
In all cases the termination of an employment contract must comply with the terms of the contract. In most cases, there are certain minimum steps which must be followed before termination to avoid the termination amounting to an unfair dismissal.
An employer must be able to demonstrate a “potentially fair” reason for the dismissal. Whether the reason identified for the dismissal is fair depends on the tribunal’s view as to the reasonableness of the employer’s actions.
At present, a failure to comply with the minimum statutory procedures (see discipline and grievance, above) will result in an automatic unfair dismissal. It is important to note that compliance with the minimum procedures in itself is not sufficient to guarantee fairness.
The agreement can generally always be terminated by the employee’s resignation. A notice period is not required by law. It is not mandatory that the parties terminate the agreement by giving notice. Giving notice is only required if the employee has been hired to render services for a specific task or for a specific period of time.
The parties are entirely free to agree to terminate the employment agreement on any grounds they desire. Where the parties agree to terminate the employment, they are not required to obtain the courts’ or regulatory body’s approval before the termination is effective, but any termination agreement between the parties in which the employee purports to give up certain statutory legal rights will only be binding if it complies with certain requirements. By virtue of the Labor Code the agreement, reassignment or settlement will be void unless it is in writing (in forms delivered by the Ministry of Labor or signed before a Notary Public).