New Modifications to the Ecuadorian Labor Regime 

March, 2016 - Alejandro Pérez Arellano

In the Official Gazzette 720 of March 28th, 2016 was published the Development of Youth Work, Exceptional Regulation to the Working Time and Unemployment Insurance Organic Act (Ley Orgánica para la Promoción del Trabajo Juvenil, Regulacion Excepcional de la Jornada de Trabajo, Cesantia y Seguro de Desempleo).This brand-new Act modifies the following laws:Labor CodeCreates the new labor figure of Youth Work, which can be sign with persons between 18 to 26 years old. The purpose is to guarantee the access to first job. One particularity is that the contribution to the Social Security is performed by the State in the first year of relationship, in the following case:a) If the employee salary is under 2 SBU (Basic Unified Salary which is USD 366 for year 2016);b) If the number of youth workers in under the 20% of the total amount of stable workers of the company.Another implementation was to permit the modification to the working time. Now it is possible to increase the working time up to: 10 hours a day, 40 hours at maximum a week. On the contrary, it is also possible to reduce the working time until a minimum of 30 hours a week.In both scenarios, the company must present the technical and economic justifications to implement the measure, which must be evaluated by the Ministry of Labor. It was also created a new parenthood license, which is applicable for both parents. This allows to the employee to take additional 09 months without payment for taking care of their child. Social Security ActIt creates a new figure of “Unemployment Insurance”. This allows to unemployed persons to apply for insurance for 05 months. The payments of this insurance have a decreasing character. It is only applicable for persons who were under labor relationship in the last 06 months, and have 24 registered contributions in the Social Security.Internship Act Since the enactment of this new Act, the term of an internship cannot be longer than 06 months. Also the salary was reduced to a third part of a SBU. However the contribution to the Social Security must be performed taking into account a SBU.



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