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Despite wages that are considered low by many Expats, the Ecuadorian labor laws favor the employees in some ways.

Christmas bonuses are one-twelfth what the employee earned during the year.

Profit sharing:  Under the employment code, employees are entitled to 15 percent of what the company earns during the period from January 1st to April 15th.

Employees receive 15 days of paid leave during each of the first five years of employment, with the amount of leave increasing incrementally after Year 5.

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Keep in mind that the above refers to the official employment economy.  Safeguards in the code may not protect those who participate primarily in street sales or other parts of the unofficial economy.

What are the regulations about house cleaners and help around the house?

It depends on what you are looking for. I have 2 women come every 2 weeks to sweep and mop and clean the bathroom and kitchen for $10. A guy I use for a handyman around my restaurant just brought his wife and kids for a half day working in my yard for $20. When I first moved here I had a guy at my house 40hrs week for $300 per month but if you want to go the legal route and pay as if you were a business it will cost you about $400/month for a full time employee.

Arn't there stiff penalties if you get caught?

I imagine there are stiff penalties for violating the labor laws in Ecuador. Then again, there are penalties for violating the law in all countries.

The problem is enforcing the law.

Individuals who engage in productive activities that are not taxed or registered by the government is "informal employment".

Informal employment rate is 64% in Ecuador, according to the World Bank. In other words, the majority of the country works this way. It is the cultural norm.

Compared to the USA, where informal employment in less than 20% (St. Louis Fed).

There are informal labor market wage rates for informal jobs, which are negotiated privately between employee and employer

Yes, an Expat can get into trouble if employing someone full-time or on a frequent and regular basis .. if not following the labor rules.

At my Quito condo I use cleaners infrequently and pay cash, never a problem arising.

However, if I had someone coming back frequently I would probably hire through an agency that handles all taxes and paperwork .. and pay extra for the peace of mind.

A single disgruntled employee can theoretically cause nightmares for an Expat if claiming that the Expit did not pay for health care, tax obligations or law-mandated Christmas bonuses -- taking the complaints to an attorney or a court.

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