Guide to employment, payroll and benefits in

El Salvador

Rivermate offers complete payroll, benefits and compliance services for

El Salvador

01. Overview

Last updated: 

August 19, 2021

Currency
Norwegian Kroner
Capital
San Salvador
Ease of doing business
65.3
Language
Spanish
Population
6486205
GDP growth
2.32%

02. Grow your team in

El Salvador

with Rivermate

Payroll, benefits, taxes, and compliance can be difficult to manage in

El Salvador

, particularly if you don't have established local relationships. You can hire employees in

El Salvador

effectively, conveniently, and in full compliance with all relevant labor laws using Rivermate's global employment solution. We handle the responsibilities and legal risks associated with foreign employment so you can concentrate on growing your company.

03. Summary

El Salvador is a Central American country whose official name is the Republic of El Salvador. Honduras borders it on the northeast, Guatemala on the northwest, and the Pacific Ocean on the south. San Salvador is El Salvador's capital and largest city. The country had a population of 6.42 million people as of 2018. For millennia, the region was ruled by several Mesoamerican nations, especially the Lenca, Mayans, and later the Cuzcatlecs. Early Olmec presence during the first millennium BC is also suggested by archeological monuments. The Spanish Empire annexed Central America at the beginning of the 16th century, integrating it into the Viceroyalty of New Spain, which was ruled from Mexico City. The Viceroyalty of Mexico, on the other hand, had little or no say in the day-to-day affairs of the isthmus, which was colonized in 1524. The Spanish proclaimed the region the Captaincy General of Guatemala in 1609, which included the territory that would become El Salvador until 1821, when it gained independence from Spain. It was forced into the First Mexican Empire before seceding and entering the Federal Republic of Central America in 1823. El Salvador became a sovereign country after the republic was dissolved in 1841, and then established a short-lived union with Honduras and Nicaragua known as the Greater Republic of Central America, which lasted from 1895 to 1898. From the late nineteenth to the mid-twentieth centuries, El Salvador experienced chronic political and economic turmoil marked by coups, revolts, and a succession of authoritarian rulers. The Salvadoran Civil War, which raged from 1979 to 1992 and was fought between a military-led government supported by the US and a coalition of left-wing rebel groups, was the result of persistent social disparity and civil unrest. The Chapultepec Peace Accords brought an end to the war. A multiparty federal republic was created as a result of this negotiated agreement, which is still in effect today. El Salvador's economy has traditionally been dominated by agriculture, starting with the Spanish taking control of the indigenous cacao crop in the 16th century, with production concentrated in Izalco and the use of balsam fresco. In the 19th century, there was a surge in the use of the indigo plant, primarily for its use as a dye. Following that, the emphasis turned to coffee, which accounted for 90% of export earnings by the early twentieth century. El Salvador has since reduced its reliance on coffee and begun diversifying its economy by expanding the manufacturing sector and opening up trade and financial ties. Francisco Flores replaced the colón, El Salvador's currency since 1892, with the United States dollar in 2001.

04. Public holidays

05. Types of leave

Paid time off

Employees who have worked for the company for at least a year are entitled to 15 days of paid voluntary leave. The 12-month period from December 12 and December 12 is used to measure annual leave. Unused holiday days cannot be refunded; instead, the person must take all of his or her vacation days during the calendar year.

Public holidays

El Salvador recognizes 11 public holidays.

Sick days

The amount of pay and leave an employee receives is determined by the length of time they have served for the company.For a period of one year or more, 75 percent of the minimum wage is paid for 60 days.For a period of 5 months but less than a year, you will be paid 75% of your base salary for 40 days.For a period of one month but less than five months, 75 percent of the minimum wage is paid for a period of 20 days.

Maternity leave

In El Salvador, a woman is entitled to a total of 16 weeks of paid maternity leave, which is paid by social security at a rate of 75%. Six weeks should be taken prior to the planned due date and ten weeks after the infant is born.If the woman is temporarily injured as a result of the birth, she will be entitled to 100% of her normal salary. There is all that social security does to people who have paid their taxes.Furthermore, if the woman has complications during her birth, she might be entitled to extra rest. The woman cannot be subjected to hard labor until the fourth month of pregnancy.Finally, the woman must provide their boss with medical paperwork detailing their maternity status and anticipated due date.

Paternity leave

Fathers are entitled to three days of paid paternity leave, which must be taken within the first 15 days of the child's birth.

Parental leave

There are currently no provisions in El Salvador law regarding parental leave.

Other leave

06. Employment termination

Termination process

Employers must issue a written termination letter outlining the basis for the dismissal for individual dismissals. Otherwise, the dismissal is regarded as null and void.

Notice period

Notice period is not required by law.

Severance pay

Compensation is only required in the event of a wrongful termination. When a labor court decides that a dismissal was unjust, the employee is entitled to compensation beginning with the day of the layoff and severance pay. Severance pay is determined on a 30-day wage basis for each year employed.

Probation period

Probation cannot be more than 30 days.

07. Working hours

General

A standard workweek consists of 44 hours spread over six days. Typically, employees work eight hours per day, five days a week, followed by four hours on the sixth workday. Employees who work at night or in hazardous conditions have their work hours reduced.

Overtime

Employees may work an unlimited amount of overtime, but some exceptions may apply to younger employees. Overtime is generally compensated at 200 percent of the regular rate of pay. In the event of a force majeure, overtime pay is waived.

08. Minimum wage

General

El Salvador does not have a national minimum wage, but it does have industry-specific minimum wages, such as $304.17 per month for retail employees, $304.17 per month for industrial laborers, $299.30 per month for apparel assembly workers, and $202.88 per month for agriculture industry workers.


Salaries are typically paid semi-monthly, with employers also required to provide a Christmas bonus. Each bonus amount will be determined by how long the employee has been with your company.

09. Employee benefits

General

The Salvadoran Institute of Master Welfare (ISBM) takes after teachers and their families, while the state provides healthcare to individuals who work via ISSS. The Solidarity Fund for Health (FOSALUD) distributes medication, vaccines, medical supplies, and laboratory equipment to national health facilities and hospitals.

10. Why Rivermate as your Employer of Record / PEO?

Establishing an entity in

El Salvador

to hire a team takes time, money, and effort. The labor law in

El Salvador

has strong worker employment protection, requiring great attention to details and a thorough awareness of local best practices. Rivermate makes expanding into

El Salvador

simple and effortless. We can assist you with hiring your preferred talent, managing HR and payroll, and ensuring compliance with local legislation without the hassle of establishing a foreign branch office or subsidiary. Our PEO and Global Employer of Record solutions in

El Salvador

give you peace of mind so you can focus on running your business.

Please contact us if you'd like to learn more about how Rivermate can help you hire employees in

El Salvador

via our Employer of Record / PEO solution.

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