El Salvador
Knowledge Base
Frequently asked question, important data and information on EOR.
General information
$ 365 USD per month
Labor Law
Laws that regulate Labor Relationship
Labor Code
Onboarding guide
- Contract requirements
- Types of contracts
- Probation Period
- Offer letter
- Digital signature
- Onboarding documents
Requirements for a labor contract
• Name, surname, sex, age, marital status, profession or trade, domicile, residence and nationality of each contracting party;
• Number, place, and date of issue of the personal identity cards of the contracting parties. and when they were not obliged to have it, mention shall be made of any reliable document or the identity shall be proved by means of two witnesses who shall also sign the contract.
• The work to be performed under the employer’s supervision, trying to determine as precisely as possible
• The term of the contract or the expression that it is for an indefinite period of time; in the first case the circumstance or event that motivates the contract to term must be stated.
• The date on which the work is to commence. When the performance of the services has preceded the written awarding of the contract, the date on which the worker began the provision of services shall be recorded.
• The place or places where the services are to be rendered and where the worker is to live if the employer undertakes to provide him with accommodation
• The working hours.
• The salary to be received by the employee for his services;
• Form, period, and place of payment;
• The quantity, quality, and condition of the tools and materials provided by the employer.
• Name and surname of the persons who are economically dependent on the worker;
• Such other stipulations as may be agreed upon by the parties;
• Place and date of the conclusion of the contract; and
• Signature of the contracting parties
Article 23, Labor Code
Pre-hire Medical exam
Not mandatory
Types of contracts
• Indefinite
• Fixed-term
• Interim term
Probation Period
The probation period can be no more than 30 days.
Are offer letters mandatory in the country?
Mandatory
Are digital signatures in labor contracts valid?
Permitted
Mandatory onboarding documents
• Identity card (DUI)
• Taxpayer identification (NIT)
• Social security card (ISSS)
• Pension affiliation card (AFP)
• Proof of income withholding tax
• Identity card of the beneficiaries to be included in the contract for benefits
• CV/ resume
• Bank account at Banco de Cuscatlan
Statutory benefits
Annual Bonus
The payment is to be made around 20th December, and the amount depends on the years of service. The employer pays 15 days of salary to employees with one to three years of service, 19 days of salary for three to ten years of service, and 21 days for more than ten years of service.
Additional bonus
Doesn’t Apply.
Leaves (medical, maternity, paternity, etc.)
• Sick days: 1-5 months of employment entitles the employee to 75.00% of the basic salary for 20 days. Five months to 1 year of employment service entitles the employee to 75.00% of the basic pay for 40 days. One year or more of employment entitles the employee to 75.00% of the basic pay for 60 days.
• Maternity Leave: Employees must take at least six weeks of leave before the expected due date and up to 10 weeks after the child is born. The employee can request to extend the maternity leave if there are any pregnancy-related illnesses/complications.
• Paternity Leave: In El Salvador, Fathers are entitled to three days of paternity leave which the employee must take within the first 15 days of the child’s birth.
• Other leave: employees who have suffered the loss of an immediate family member are entitled to one day of paid leave bereavement leave.
Annual Leave (days per year)
15 days of paid annual leave. The annual leave is calculated from December 12-December 12 | Paid time off is paid at a rate of 130.00% of the employee’s regular salary rate of pay and paid to the employee before their leave. Any unused vacation days cannot be compensated financially and will be lost.
How do vacation days expire?
Any unused vacation days cannot be compensated financially and will be lost.
Official Holidays
•1 Jan New Year’s Day
•6 Apr Maundy Thursday
•7 Apr Good Friday
•8 Apr Easter Saturday
•1 May Labor Day
•10 May Mother’s Day
•17 Jun Father’s Day
•6 Aug Feast of San Salvador
•15 Sep Independence Day
•2 Nov All Souls’ Day
•25 Dec Christmas Day
Art. 192: Workers who, by mutual agreement with their employer, work on a day off, shall earn an extraordinary salary consisting of the ordinary salary plus a surcharge of one hundred percent thereof.
Working on holidays and Sundays
Double pay for working on holidays. Art. 192
Number of Working hours
8 hours a day, 44 hours a week. Typically five and a half days a week
Overtime
Paid at 100% on the regular wage.
Social Security (what does it cover)
• Pensions
• Dependent/ survivor (Widow, widower, children, parents)
• Disability benefits: in case of accident/injury/non-occupational disease resulting in permanent disability. Law No. 927
Payroll
Salary payment currency
United States Dollar (USD)
Can salary be paid in a different currency other than the local currency?
No.
Payment frequency
Weekly, bi-weekly, or monthly, and payments must be made on the same day of the month and no later than one working day following the end of the pay cycle.
VAT percentage
VAT in El Salvador is 13.00%.
Income Tax
Residents and non-residents are taxed at progressive income tax rates ranging from 5% to 35%. For more information see: https://taxsummaries.pwc.com/el-salvador/individual/taxes-on-personal-income
Tax Payer Identification Number
NIT (Número de Identificación Tributaria)
Offboarding
Voluntary resignation
Art. 54 Resignation shall take effect without the need for acceptance by the employer.
Contract termination
A contract is automatically terminated in the following cases:
• End of the contract term
• Death of the worker
• Due to the legal, physical or mental incapacity of any of the parties that makes it impossible to comply with the contract
• For the dissolution or liquidation of the company
• By the enforceable sentence that imposes the prison sentence on the worker
Justified Dismissal
1) if the worker deceived the employer by means of false letters of recommendation or certificates when the contract was concluded. This ground ceases to be operative after the worker has completed 30 day’s employment;
2) due to the worker’s repeated negligence,
3) if the employer lost confidence in an employee exercising managerial supervision, surveillance, audit functions, or similar functions – however lack of confidence of employees holding supervising duties is difficult to prove at court. As stated by the Supreme Court of Justice –Sala de lo Civil. Sentencia N° 436- 2002 de 13/08/2002, sufficient objective evidence must be submitted by the employer to convince the Judge that the actions that led to the dismissal for lack of confidence are indubitable –;
4) if the worker reveals manufacturing secrets or communicates administrative matters to the detriment of the undertaking;
5) if the worker commits serious acts of immorality inside the undertaking or while performing work outside the workplace,
6) if the worker commits disrespectful acts against the employer or his/her relatives, except in the case of provocation,
7) if the workers commits acts causing serious disruption to the company’s activity;
8) f the worker (either intentionally or by negligence) seriously endangers the safety or operation of the establishment, or the persons therein safety or activity of the workers, or their health,
9) if the worker deliberately damages the plant, machinery, tools, work implements, goods or merchandise,
10) if the worker is absent from work without any justification for two consecutive working days, or a total of three days within the same months;
11) if the worker, after imprisonment or pre-trial detention, comes back to work, within three days from the date of release, and s/he committed a crime against the employer or his/her relatives,
11) if the worker commits serious breaches of the obligations under the contract of employment,
12) in the event of disobedience to the employer (or employer’s representative),
13) if the worker drinks alcohol or takes drugs during working time or if s/he works under the effect of alcohol or drugs,
14)If the worker does not fulfil his/her obligations under art 24 LC. In these cases, no severance payment is due
Unjustified Dismissal
In case of dismissal without cause (“despido incausado”), the severance payment amounts to 30 days
basic salary per each year of service or in proportion for any fraction of year, with a minimum of 15 days´
basic salary (Article 58 LC). The same severance payment applies to the termination of the employment
agreement due to the employer´s breach of its obligations, as defined in article 53 LC (despido de facto).
Severance pay in El Salvador is subject to specific regulations and will vary depending on the reasons that led to the termination of the employment. For instance, severance is not provided in case of resignation by the employee or when the employment contract’s duration term has elapsed.
If severance is required, it is generally calculated as 30 days of salary for each year of service.
Minimum Notice Period
Employees are not required to give notice of their decision to resign, however they must provide written notification of their decision to leave. For employees in senior or specialized roles, a 30-day notice period of their intention to resign may be required.
There is no notice period required for employers.
Immigration
Visa process
In order to apply for a work visa in El Salvador, it is required to have a valid passport for at least 6 months, in addition to proof of vaccination against yellow fever and evidence of sufficient funds for the time of stay in the country. A letter from your company stating that you will be working in the country is also required.
Visa documents
A work permit and a temporary residence permit have some of the same requirements, which include:
• Police certificates from El Salvador, the applicant’s country of residence and country of origin.
• Medical certificate
• Proof of experience or university degree
• Copy of passport pages with visa/entry stamps
• Certificate of residence
• Copy of the applicant’s last utility bill.
• Registration form
• Provisional residence card
• Residence application form
• Original birth certificate.
•Certificate of good conduct
• Two recent photos
• HIV / AIDS test results
• Employment contract
• Personal data form
•Letter requesting residency