Table of Contents

El Salvador

Table of Contents

Currency

US Dollar (USD)

Payroll Frequency

Weekly, Bi-Weekly, or Monthly

Employer Taxes

15.25%-16.25%

About El Salvador

El Salvador is the smallest nation in Central America and borders the North Pacific Ocean between Guatemala and Honduras. In 1821, El Salvador won independence from Spain and in 1839, from the Central American Federation. A brutal civil war that cost 75,000 lives concluded in 1992 when the government agreed to establish a multiparty constitutional republic. With a population of 6,172,011, El Salvador remains a very poor nation with an agricultural focus on coffee which makes up almost 90% of its exports. Spanish and Roman Catholicism are, respectively, the predominant spoken language and practiced religion in the region. Ethnic groups represented in the country include Mestizos, whites and indigenous peoples. El Salvador has a tropical climate and is geographically situated in an area of tremendous climate volatility, including being susceptible to droughts and earthquakes. It also has very rich biodiversity with several species of wildlife that recent conservation efforts have been pushing to protect. The country’s most well-known culinary product is the pupusa, a hand-made corn tortilla stuffed with cheese, chicharrón, or refried beans.

Employment Relationship

• Permanent Employment

In El Salvador, the Labor Code defines permanent employment as a type of employment relationship related to tasks that, by their nature, are permanent. These would be tasks that cannot be classified as temporary or transitory. Permanent employment contracts are considered to be made for an indefinite period, even if they include a date of termination.

• Fixed-Term or Specific-Purpose Contracts

In El Salvador, employment contracts concluded for a specific job are considered fixed-term contracts. The term of the agreement ends when the job is completed. When the job is expected to last for more than 15 days, the employer is obliged to give notice to the employee in writing at least 7 days before the end of the job. If notice is not given, the employer is required to pay a benefit equivalent to 7 days of the employee's regular salary.

• Temporary Employment Contratcs

The Labor Code of El Salvador provides that in cases where a permanent employee is not available due to suspension of the employment contract or any other cause, employers can hire interim employees to fill in. When the permanent employee returns, the contract with the interim employee will end. However, temporary employees are presumed to be permanent if they continue working for more than 15 days after the substituted employee returns.

Probationary Period

In El Salvador, the Labor Code provides that an employment contract can stipulate a probationary period of up to 30 days. Either party may terminate the agreement without cause during the probationary period. If the probationary period expires without either party having manifested its will to terminate the contract, it will continue indefinitely, unless the parties have set a deadline for its termination. If a new contract is concluded between the same contracting parties within 1 year for the same kind of work, no probationary period can be stipulated in the new agreement.

Working Hours

Per the Labor Code, the working time in El Salvador cannot exceed 8 hours in a day or 44 hours in a week. All work done over this limit is considered overtime and must be remunerated at 200% the ordinary salary. If a job requires the completion of dangerous or unhealthy work during the day, working time cannot exceed 7 hours a day or 39 hours a week. For jobs that require the completion of dangerous or unhealthy work during the night, working hours cannot exceed 6 hours a day or 36 hours a week. Teleworking is strictly voluntary for both the employee and employer and there must be a written agreement between the parties where the terms and conditions are established. 

Holidays / PTO

• Statutory Holidays

The Labor Code of El Salvador recognizes the following paid public holidays: New Year's Day – January 1 Thursday, Friday, and Saturday of Holy Week – date subject to change annually Labor Day – May 1 Feast of San Salvador – August 6 August 3 and 5 – holidays in the city of San Salvador Independence Day – September 15 All Souls' Day – November 2 Christmas – December 25  

• Paid Annual Leave

According to the Labor Code of El Salvador, employees are eligible for an annual leave of 15 days after 1 year of work with the same employer. The employee must have worked for at least 200 days in the year to qualify for the annual leave. The employee is entitled to a benefit equal to the ordinary salary plus a 30% surcharge for the duration of the leave. The remuneration for leave must be paid to the employee immediately before its start.

• Sick Leave

Per the Labor Code of El Salvador, an employment contract can be suspended during a period of employee illness. Employers must pay an amount equal to 75% of the employee's base salary for the duration of illness. The number of days allowed for the suspension of the contract depends on the employee's seniority.

• Maternity Leave

In El Salvador, employees are entitled to receive up to 16 weeks of paid maternity leave. The employee must use 10 weeks of maternity leave after the birth of the child. In case of any complications, the leave can be extended in the prenatal period. Employees who have made at least 12 weeks of contributions and remained with the same employer for at least 6 months are eligible for maternity benefits paid by the Social Security System. Maternity benefits are equal to 75% of the employee's basic salary for the duration of maternity leave.

• Paternity Leave

Employees in El Salvador are entitled to 3 days of paid paternity leave, which may be taken within 15 days of the birth of the child (or date of adoptive judgment for adoptive parents). To enjoy this leave, the employee must present a birth certificate or certificate of adoption.

Termination of Employment

• Notice Period

The Salvadoran Labor Code does not generally require employers to give notice of dismissal to individual employees. However, prior judicial authorization is required for certain collective dismissals, and the authorities may order a notice period in such circumstances.

• Severance Benefits

For de facto dismissals (dismissals without cause), workers are entitled to receive compensation equivalent to 30 days' pay for each year of service (or portion thereof) with a minimum severance payment of 15 days' pay. The same severance payment is applicable if the termination of an employment contract occurs because the employer breaches its obligations. No severance payment is due if the dismissal was for a justified reason, such as employee misrepresentation, misconduct, or insubordination.