Background Checks

Employers may verify:

• Criminal records
• Employment history
• Educational qualifications
• Identity and address

Must comply with the Personal Data Protection Act (2021), which requires:

• Informed consent from the candidate
• Secure handling of personal data
• Use of data only for legitimate employment purposes

Verification and New Hire Reporting

Employers are legally required to register new employees with the following institutions:

ISSS (Instituto Salvadoreño del Seguro Social):

• Must register the employee within 10 days of their start date.
• Submit the employee registration form and supporting documents.

AFP (Pension Fund Administrator):

• Register the employee for pension contributions.
• Choose between AFP Confía or AFP Crecer.

Ministry of Labor (if applicable):

• Some industries or roles may require notification or reporting to the Ministry.

Onboarding Process & Documentation

Collecting Required Documentation

Upon hiring, employers must collect and maintain the following documents from new employees:

• Valid identification (e.g., DUI or passport)
• NIT (Tax Identification Number)
• Social Security Number (ISSS)
• AFP affiliation (for pension contributions)
• Signed employment contract
• Medical certificate (if required for the role)

Providing Employee Rights and Obligations

Employers must inform new hires of their rights and responsibilities, including:

• Working hours and rest periods
• Wages and payment frequency
• Leave entitlements (vacation, sick leave, maternity/paternity leave)
• Termination conditions and severance rights
• Health and safety policies
• Internal regulations or employee handbook (if available)

This information should be provided in writing, ideally as part of the onboarding packet or employee manual.

Healthcare

Health coverage in El Salvador is primarily provided through the Salvadoran Social Security Institute (ISSS), funded by mandatory contributions from both employers and employees.

ISSS Coverage Includes:

• Access to public healthcare facilities
• Medical consultations and hospitalization
• Prescription medications
• Sick leave benefits

Contribution Rates:

• Employer: 7.5% of salary (up to a max of $75/month)
• Employee: 3.0% of salary (up to a max of $30/month)
• Maximum salary base: $1,000/month

Private Health Insurance:

• Often offered by employers to supplement public healthcare
• Plans vary in coverage, deductibles, and provider networks
• Employers typically cover 50% to 100% of premiums
• Group plans are common and cost-effective

Employer Compliance:

• Must register employees with the ISSS
• Ensure timely and accurate monthly contributions

Retirement

El Salvador operates a mandatory private pension system managed by Administradoras de Fondos de Pensiones (AFPs).

AFP Contributions:

• Employer: 8.75% of salary
• Employee: 7.25% of salary
• Maximum salary base: $7,300/month

Contributions go into an individual retirement account. Funds are invested by the AFP to generate retirement income.

• Retirement age: 60 for men, 55 for women, or after 30 years of service

Supplementary Plans:

• Less common, but some employers offer additional retirement savings options

Employer Compliance:

• Must register employees with their chosen AFP
• Submit accurate monthly contributions and payroll reports

Social Security

At this time, Vensure does not have social security details available. For detailed information, please visit the Social Security Institute (ISSS).

Employment Contract Details

El Salvadoran labor law recognizes several types of employment agreements, primarily categorized by their duration:

Indefinite-Term Contracts

• These are the default and most common type of employment agreement.
• They do not have a specified end date.
• The contract continues until terminated by either party, in accordance with legal procedures (e.g., resignation, justified dismissal, or mutual agreement).

Fixed-Term Contracts

• These contracts specify a clear start and end date.
• They are typically used for:
• Temporary or seasonal work
• Specific projects
• Replacing an absent employee

The law restricts their use for permanent roles. Repeated renewals for the same position may result in the contract being reclassified as indefinite.

Mandatory Elements While oral agreements are legally valid, written contracts are strongly recommended for clarity and legal protection. El Salvadoran labor law requires that written contracts include the following:

• Full names, nationalities, ages, marital status, and addresses of both employer and employee
• Job title and detailed description of duties
• Work location(s)
• Contract duration (or indication that it is indefinite)
• Work schedule and hours
• Salary or wage, payment method (e.g., cash, bank transfer), and frequency (e.g., weekly, bi-weekly, monthly)
• Date of contract signing
• Signatures of both parties

Optional Clauses may include:

• Benefits
• Vacation and holiday entitlements
• Other mutually agreed terms, provided they comply with minimum labor standard

Probation Period

The probation period depends on the type of role and is stipulated within the employment agreement. The maximum duration of the probationary period is 30 days.

During this time, either party may terminate the employment relationship without cause and without severance liability.

To be valid, the probationary period must be clearly stated in the written employment contract.

If not specified, the employment is considered effective from day one, with no probationary phase.

Visas

Visa Types

• Tourist: Up to 90 days.
• Business: Requires invitation and employer letter.
• Work: Needs job offer, contract, permits.
• Student: Proof of enrollment and funds.
• Residency: For retirees, family reunification, etc.

Application Process

• Choose visa type → Gather documents → Apply at consulate → Pay fees → Attend interview (if needed).

Exemptions

• Visa-free for U.S., Canada, EU, and CA-4 countries (short stays).

Independent Contractors

El Salvador distinguishes between employees and independent contractors, with different legal obligations for each.

Independent Contractors:

• Are not covered by labor protections such as minimum wage, overtime, or social security.
• Must operate under a civil or commercial contract, not an employment contract.
• Are responsible for their own tax and social security contributions.
• Typically issue invoices for services rendered.

Key Considerations for Employers:

• Misclassifying an employee as a contractor can lead to legal penalties.
• The nature of the working relationship (e.g., control, schedule, tools provided) is used to determine if someone is truly independent.
• Contractors do not receive benefits like paid leave, ISSS, or AFP contributions.

Paid Time Off

After 1 year of continuous service or 200 days worked in a year.

• Entitlement: 15 consecutive working days of paid vacation annually.
• Vacation Period: Calculated from December 12 to December 12.
• Payment: Employees receive their regular salary plus a 30% bonus (i.e., 130% of their daily wage) paid before the leave begins.
• Carryover: Unused vacation days cannot be carried forward or cashed out—they must be used within the entitlement period.

Public Holidays

• New Year’s Day
• Maundy Thursday
• Good Friday
• Holy Saturday
• Easter Sunday
• Labor Day
• Mothers’ Day
• Fathers’ Day
• San Salvador Day 1- Only in San Salvador
• San Salvador Day 2 – Only in San Salvador
• Celebrations of San Salvador
• Independence Day
• Christmas Eve
• Christmas Day
• New Year’s Eve

Bereavement

Employees are entitled to 1 day of paid leave in the event of the death of an immediate family member.

Maternity Leave

Female employees are entitled to 16 weeks total (typically 6 weeks before and 10 weeks after childbirth).

• Payment: 75% of regular wages, funded by the ISSS
• Eligibility: At least 6 months of service and 12 weeks of ISSS contributions
• Restrictions: No physically demanding work after the 4th month of pregnancy

New Requirement: As of mid-2024, private companies with 100+ employees must provide daycare services for employees’ children.

Paternity Leave

Fathers are entitled to 3 working days, to be taken within 15 days of the child’s birth.

• Payment: 100% of regular salary.

Parental Leave

El Salvador does not have a statutory law for Parental Leave.

Sick Leave

Sick leave entitlements are based on length of service and are paid at 75% of the employee’s base salary, funded by the ISSS:

• 1-5 months: 20 days
• 5 months -1 year: 40 days
• 1 year or more: 60 days

Employees must be registered with the ISSS and meet contribution requirements to qualify.

Termination Requirements

In El Salvador, there is no statutory requirement for a notice period under labor law. However, it is a common practice—and often outlined in employment contracts or collective agreements—for employees to provide at least 7 days’ notice after completing their probationary period.

Notice Period

In El Salvador, there is no statutory requirement for a notice period under labor law.

Severance Pay

Severance pay is governed by specific legal provisions and depends on the reason for termination.

When Severance Is Required:

• Termination without just cause by the employer

Calculation:

• Typically calculated as 30 days of salary for each year of service
• Pro-rated for partial years

Unemployment Insurance

El Salvador does not have a statutory law for unemployment insurance.

Anti-Discrimination Practices

El Salvador’s labor laws strictly prohibit discrimination in employment and require employers to ensure equal treatment and opportunities for all employees and job applicants.

Employers may not discriminate based on the following:

• Race or ethnicity
• Religion
• Political opinion
• Nationality
• Sex or gender
• Age
• Disability
• Sexual orientation
• Marital status

These protections apply to all stages of employment, including recruitment, hiring, promotions, compensation, and termination.

Workplace Safety Standards

Employers in El Salvador are legally required to ensure a safe and healthy work environment for all employees. This responsibility includes identifying workplace hazards, implementing preventive measures, and promoting a culture of safety.

Employer Responsibilities

• Identify and mitigate risks to prevent workplace accidents and occupational illnesses.
• Provide appropriate personal protective equipment (PPE) based on job duties.
• Offer regular training on health and safety procedures.
• Ensure that facilities meet minimum safety and hygiene standards.
• Maintain accessible and adequately stocked first-aid stations.
• Report all workplace accidents and occupational diseases to the relevant authorities.

Employee Responsibilities

• Follow established safety protocols.
• Use the safety equipment provided.
• Report unsafe conditions or incidents promptly.

The Ministry of Labor and Social Welfare (MTPS) is responsible for enforcing these regulations through workplace inspections and compliance audits.

Workers’ Compensation

Worker’s compensation is primarily regulated through:

• The Labor Code of El Salvador
• The Social Security Law
• Oversight by the Instituto Salvadoreño del Seguro Social (ISSS)

Employers are required to:

• Register employees with the ISSS to ensure access to medical and compensation benefits.
• Report workplace accidents or occupational illnesses to the ISSS and the Ministry of Labor.
• Cover medical expenses and lost wages through the social security system, which is funded by employer and employee contributions.

If an employee is injured on the job or develops a work-related illness, they are entitled to:

• Medical care and rehabilitation
• Temporary disability benefits (a percentage of their salary during recovery)
• Permanent disability compensation, if applicable
• Survivor benefits for dependents in the event of a fatal accident

Claims and Enforcement

• Claims are processed through the ISSS, which evaluates the injury and determines eligibility.
• The Ministry of Labor and Social Welfare (MTPS) monitors compliance and can impose penalties for non-registration or failure to report incidents.

Labor Law Sanctions

Employment Contracts: The Labor Code recognizes various types of employment contracts, including indefinite-term, fixed-term, and seasonal contracts. These contracts must outline essential elements such as job description, compensation, working hours, and duration.

Working Hours and Overtime: Standard working hours are set at 44 hours per week, with specific regulations for overtime compensation.

Minimum Wage and Benefits (Decree No.179): The government sets minimum wage standards, which are periodically adjusted. Employers must comply with these standards and provide additional benefits such as health insurance and social security.

Vacation and Leave Entitlements: Employees are entitled to annual vacation leave, maternity and paternity leave, sick leave, and other types of leave.

Termination of Employment: The Labor Code outlines grounds for termination, notice periods, and severance pay. Employers must follow legal procedures for dismissals.

Workplace Health and Safety (Decree No, 254): Employers are responsible for ensuring a safe working environment and must adhere to occupational health and safety regulations.