El Salvador, also known as the Republic of Salvador, is a Central American country bordered by Guatemala and Honduras. It is the smallest nation in Central America with a total area of 21,041 square kilometers, and its coast borders the Pacific Ocean. It is the only Central American country without a Caribbean coast. The service sector dominates the economy, although historically it was predominantly agriculturally driven, with the nation’s primary exports including coffee, maize, sugarcane, and cotton.

*Please note that the official currency is the currency of remuneration when employed through WorkMotion in El Salvador.

Capital :
San Salvador
Currency :
United States Dollar (USD, $)
Languages spoken :
Spanish
Population :
6.48 million (2022 est.)
Minimum wage 2022 :
$365 per month
Cost of Living index :
$$ (71 out of 139)
Payroll Frequency :
Weekly, fortnightly, or monthly basis
VAT - standard rate :
13%
GDP - real growth rate :
3.7% (2021 est.)

Statutory Holidays

The holidays mentioned below are valid for the year 2023.

Date
Holiday Name
Extra Information
January 1
New Year’s Day
April 6
Maundy Thursday
Movable
April 7
Good Friday
Movable
April 8
Easter Saturday
Movable
May 1
Labor Day
August 6
Feast of San Salvador
September 15
Independence Day
November 2
All Soul’s Day
December 25
Christmas Day

Contract Sharing Time


The approximate time for sharing the contract with an employee in El Salvador is 14 business days assuming no special requests or changes to our standard employment contract. Any such requests or changes would need to undergo internal and external review, directly leading to a time delay.

NOTE: This number is subject to change and is only an estimation of the Contract Sharing Time. The estimated Contract Sharing Time begins from the moment that WorkMotion has received all required information from both the client and the employee.

What You Need To Know


  • Teleworking arrangements must be stated in the employment agreement itself, or in an addendum. This is because policies on the conditions of remote work must be made clear to the employee.
  • The employer must reimburse the remote employee for a proportional amount of relevant costs such as electricity or internet services.
  • Annual leave increases with age.
  • Overtime work may be performed only occasionally, under special or unforeseen circumstances.

Labor Conditions


Working Hours

The general work week in El Salvador is 44 hours a week or eight hours a day, Mondays to Saturdays. The employer should schedule the hours of work, but later modifications should be made with the employee’s consent. Employees are entitled to breaks of 30 minutes, which should be included in the working time.

Overtime

Overtime work should be remunerated with a 100% increase on the basic salary per hour. Overtime working hours should be agreed upon between the parties; not imposed by the employer.

 

Probation Period

It may be stipulated in the employment agreement that the first 30 days of employment would be probation days. Once the probation days expire, assuming neither the employer nor employee have expressed their will to terminate the contract, then the contract will continue for an indefinite period of time.

Termination Notice Period

For work that lasts more than two weeks, the employer is obliged to give written notice of at least seven days. The employer is required to serve a contract termination notice to the employees or pay in lieu of notice.

Leave / Time Off

Annual Leave

Employees are entitled to a minimum of 20 days of paid annual leave per year, paid by the employer. Annual leave is calculated dependent on the amount of the calendar year remaining after employment began. The annual leave is remunerated with a sum equivalent to their ordinary wage for that period of time, plus 30% of that sum.

Sick Leave

Sick leave is paid by the employer at the rate of 75% of the basic salary, regardless of the length of employment. The exact sick leave entitlement is dependent on the length of continuous employment, ranging from a 20 day entitlement for those in continuous employment for one to five months, up to a 60 day entitlement for those in continuous employment for at least 12 months. 

Parental Leave

Maternity Leave

The employee is entitled to a total of 12 weeks of maternity leave; six of which is compulsory and must be taken after confinement. Maternity leave is paid at 75% of the basic wage by the employer.

Paternity Leave

The employee is entitled to three days of paid paternity leave; paid for by the employer.

Other Types of Paid Leave

Emergency Family Leave

The employer should provide an emergency family leave to all employees to fulfill the “obligations which objectively require their presence”, such as the death or sickness of a spouse, parent, child, or any other person economically dependent on the employee.

Unpaid Leave

There is no statutory provision for unpaid leave. 

Statutory Benefits

The Institute of Salvadorian Social Security (ISSS) is El Salvador’s main social security system. It provides health insurance, pensions, disability benefits, and so on. The employer must contribute the following to the social security scheme:

 

BenefitEmployer Contribution Rate
Institute of Salvadorian Social Security (ISSS)7.5%
Pension Fund (AEP)7.75%
Instituto Salvadoreño de Formación Profesional (INSAFORP)1%

 

Health Insurance

The employer contribution to the health insurance scheme is included in the 7.5% contribution to social security.

There are three pillars of healthcare coverage in El Salvador: universal public healthcare, statutory health insurance provided to employees, and private healthcare insurance. 

Insured employees have access to general medical care, specialist care, medicine, hospitalization, maternity care, and transportation, paid for by employee and employer contributions to the social security scheme.

Other Insurances

Accident Insurance

Work injuries are divided into four categories, with compensation calculated dependent on that:

Type of Injury

Compensation

Permanent Total Incapacity

75% of the employee’s average earnings in the last year; if the assessed degree of disability is greater than 66%

Permanent Partial Incapacity

The amount of compensation depends on the assessed degree of disability (35 to 66%)

Temporary Incapacity

75% of averages wages in the first 3 of the last 4 months, paid up to 52 weeks

Fatal Injury

Percentage of full pension paid; please refer to “Public Pension” section

Unemployment Insurance

There is no statutory provision for unemployment benefits.

Public Pension

The employer’s contribution to the pension fund is 7.75%.

To receive a full pension, the employee must have either reached a certain age (55 for women, 60 for men) with at least 25 years of contributions, or be any age with 30 years of contributions. The pension is 30% of the base salary for the first three years of contributions, plus 1.5% for each additional year.

Other Statutory Benefits

Invalidity Benefit

Invalidity benefits are funded by social security.

The invalidity benefit is provided in the case of non-occupational injury, disease, or accident resulting in permanent disability. This is funded by social security payments. Invalidity pension for permanent disability is 70% of the employee’s average earnings, and 50% for partial disability of 50-65%.

Instituto Salvadoreño de Formación Profesional (INSAFORP)

The employee contribution to INFASORP is 1%.

INFASORP provides and funds vocational training programs for companies with at least ten employees, funded through mandatory employer contributions.

Disclaimer

The information contained in this Country Guide is provided for informational purposes only and should not be construed as legal advice on any subject matter. The contents of this Country Guide contain general information and may not reflect current legal developments or address your situation. You should not act or refrain from acting on the basis of any content included in this Country Guide without seeking the advice or representation of a licensed attorney. WorkMotion Software GmbH disclaims all liability for actions you take or fail to take based on any content included in this Country Guide.

Information provided in this Country Guide is provided “as is” without warranty of any kind, either express or implied, including without limitation warranties of merchantability, fitness for a particular purpose, or non-infringement. WorkMotion Software GmbH periodically adds, changes, improves, updates, or removes information without notice, and assumes no liability or responsibility for any errors or omissions in the contents of this Country Guide. This Country Guide may contain links to other websites. WorkMotion Software GmbH disclaims all liability for the privacy practices or the content of such websites.

 

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