Pay taxes or ss for employing housekeeping help.

I am wondering if one hires a maid if one has to pay any taxes or insurance for the help etc...

All employees must be be paid a minimum wage of $318 (I think) per month. Plus there are two other months that must be paid, one of which is in September - not sure about the other.  Both the employer and the employee must pay to the social security. And when an employee leaves the employer must pay the employee (I think this is the correct amount) one month's salary for every year worked.

Considering all the hassle, I wonder if it isn't easier to do your own cleaning.

Oh, better have a lawyer draw up a contract with the employee.

I'm sure that I left a lot out

Mike

Instead of an employee, why not treat the cleaner like a subcontractor.  The cleaner is in business for herself and you are just paying for the services, like a lawyer or accountant.  Certainly she has many clients and you pay her by the job, not by the hour.

To be fully compliant with all legal requirements you will likely want to follow legal advice from a capable attorney and not what Mike and I (or anyone else on this forum) tell you.  In general, the relationship between the employer and employee in Ecuador is more formal than in the U.S.  Ecuador generally does not have an "at will" employment relationship.  Instead, you should expect a written employment agreement with a specified term and other details.

Here are some general concepts you'll be looking to learn much more about from someone with an Ecuadorian law license:

MINIMUM WAGE:
Minimum wages are fixed by the “Sectoral Committees” on an annual basis.  Effective in December 2012, the minimum monthly wage was $318 and this applies to maids and housekeepers.

OVERTIME
The written agreement should address hours of work and any required overtime.  In general: a) Overtime may not exceed four hours per day, or twelve hours per week; b) Overtime occurring before midnight is considered “supplementary hours” and is paid with at 150% of the regular hourly rate; c) Overtime occurring from midnight to 6:00 a.m. is considered “extraordinary hours” and is paid at 200% (double time); d) Work during Saturdays and Sundays must be paid as double time too.  Again, there are exceptions.

TERM OF EMPLOYMENT
As a general rule, employers must provide a minimum one year period of employment to employees. If the employer terminates a worker before the end of the term, the employer must make a severance payment. If the employee continues to work beyond the end of the agreed term, the term of the contract will automatically become "indefinite."

A fixed term contract terminates on the date of expiration of the term agreed, provided that the employer gives the worker notice of its decision to terminate it at least 30 days prior to the agreed date of termination through an administrative procedure referred to as “desahucio”. In the event of failure to give such notice, the fixed term contract becomes an indefinite term contract.

A worker may give such notice in any case, provided that he does so at least 15 days prior to the date of termination, and if he fails to give such notice he shall not be entitled to a bonus payment. Stated differently, a “desahucio” done before a Labor Inspector entitles the worker to receive a bonus payment.

Calculation of the bonus amount, including the amount payable for an early termination, are too complicated to explain and would serve no real purpose, but suffice it to say most calculations are based on years of service.

MATERNITY LEAVE
Mothers are entitled to up to twelve weeks of paid leave for the birth of a child.  Fathers are entitled to up to ten days of paid leave for the birth of a child.

PROFIT SHARING
Although a private residence is not a business, folks operating a home-based business should be aware that all employers engaged in "profitable commercial activities" are required to share their annual profits with their employees, generally in the amount of 15% of the profits.

SPECIAL REMUNERATION
Ecuador labor law provides for three additional payments to (or on behalf of) employees:
a) Thirteenth annual salary (Christmas bonus)(basically on month of pay) payable before December 24.
b) Fourteenth annual salary (school tuition)(Basically one month's minimum wage, which as I said is $318) payable before March 15 in some areas and before September 15 in other areas.
c) Reserve Fund (Social Security): The employer must deposit with the Social Security Institute basically the amount of one month’s salary after each year of employment.

To be fully compliant with all legal requirements you will likely want to follow legal advice from a capable attorney and not what Mike and I (or anyone else on this forum) tell you.

Let me add an Amen to that.  Ecuador uses civil law and not Common Law as many of us are accustomed to.  And great job outlining the employment issues, Saw Man.

Mugtech, it is my understanding that one can not treat a person who comes every week like one does a plumber for example.  They are in separate categories.

I heard that one expat helped a cleaner set up a company providing cleaning etc as the woman who cleaned different houses each week was going to loose her customers due to the law's reporting requirements.  For the people it was just easier to do the cleaning themselves rather than have to do the paper work. 

I would think a cleaning service type of business (like Merry Maids in the States) might be welcome in both the expat and the local community.

quito0819 wrote:

I heard that one expat helped a cleaner set up a company providing cleaning etc as the woman who cleaned different houses each week was going to loose her customers due to the law's reporting requirements.  For the people it was just easier to do the cleaning themselves rather than have to do the paper work.

It is one of those Law of Unintended Consequences things: Laws intended to help workers sometimes hurt them by discouraging potential employers from hiring. As I was reading Saw Man's post I was thinking "Why the heck would I ever hire anybody under those regulations?"

Carmen,

I thank you, as well, for taking the time to tally up this data and to share it with us.

Although I believe my retirement resources to be adequate (perhaps a wee bit better than adequate) I don't want to find out upon arrival that I've been IL'd.  (Int'l Livings info has been very helpful, as a starting point, but one needs to corroborate the info, much like in using Wikipedia)

Since you've already shot the YouTube video, would you mind sharing it with me as well?  I happen to share your preference of "quaint" over "modern" and am VERY curious what that looks like in Ecuador vs a vs Portland or San Francisco.

   Carlos     aka "ElGringoBueno"

PS  I've set up a new email address for my "Ecuadorian Research/Networking" ...

      elgringobueno[at]yahoo.com

Hi nancy roman,

A new topic was created from your post on the Cuenca forum for better visibility.

Regards,

David.

This actually sounds like if you intend to hire for a 40-hour week, not a few hours a week. 
Or am I mistaken?

Thank you all for sharing your information with me.  I am considering doing the cleaning myself as it seems to be too much paperwork and legal issues involved.  Thank you all!

Nancy, we had a maid for five years which like all things in life has benefits and disadvantages. We liked house was always immaculate, everything was in its place, an excellent meal was ready at 1PM,  we had fresh bread and juice mornings, errands were run, luggage was packed and unpacked and closets were organized like a department store. They can also provide companionship. This took a month of training by my wife in cooking and use of household equipment. The downside is the cost and loss of privacy. In our building with 11 units, we are the only one without a maid. Some have 2. I suggest you hold off making a decision until you see them in action.

Here in the Philippines, most middle-class families (and all at higher levels) have at least one maid, and often a driver/odd-job guy.

Expats who have families will do the same (especially if the wife is Filipina, because she expects it). Given that my apartment is relatively small (though Filipinos often say upon seeing it, "You live here all by yourself?" with a sense of wonder) I don't have any help. Those who do say the loss of privacy (and occasional petty theft) is the big problem.

I notice that houses and larger apartments in Ecuador seem to have maid's quarters, so I guess the situation is much the same. I don't plan on having any help there, but if I get a bigger place than here (I expect to have visitors from the States ) I may hire someone to come in once a week or so (if I can do it without legal hassles).