Ecuador: Practical Limitations To The Obligation Of The Employer To Have A Daycare Service

Last Updated: 7 March 2019
Article by Andrea Peña Vélez

The obligation of the employers with more than fifty employees of having in their premises a daycare service, either individually or together with other companies, lacks real spirit of protection of minors and has become: (i) for the authorities, one more item in their list of obligations to verify; (ii) for the employers, in the need –not very viable and very expensive- to alter their ordinary business, or to execute agreements with daycare services and only to avoid being fined; and (iii) for daycares, in a secure business.

The dynamic between labor and work relations turns the revision of this obligation necessary, not to say indispensable, since this is a measure to indirectly protect minors, who are already protected by all the benefits provided by the Labor Code to the new parents.

I. Applicable Laws:

  • Article 155 of the Labor Code and the Regulation for the Application of this law (Executive Order No. 718 published in May 6, 1985), set forth the obligation to have, free of charge for the employee, a daycare service for the children of the employees of companies with fifty or more employees, either individually or together with other companies, or the obligation to hire these services with authorized third parties.
  • Until September 26, 2012, the employer had the option to choose between hiring the daycare service or grant the mother a six-hour working day during the nine months following the delivery. Nevertheless, in that date, a reform was published which established both obligations as mandatory (they do not exclude one from the other).

We must point out that choosing the daycare service is a voluntary act of the working mother or father, which includes the assistance and food of the children under the age of three (before preschool), the establishment and supplies for the service, free of charge for the employees.

II. Requirements from the authorities and penalties. -

The Ministry of Labor, within their random inspections made to companies to verify their compliance with all labor obligations, reviews the implementation of a daycare service in the premises of the employer, or the existence of an agreement issued with a duly authorized daycare. The compliance with this provision is fined with a penalty that ranges from 3 to 10 salaries (in Ecuador, it is currently $394.00 US), depending on the size of the Company.

Nevertheless, even though labor authorities require the fulfilment of this obligation, currently it is not very likely for companies to be able to set up daycares in their premises, for the reasons set forth below.

III. Reasons why it is difficult for companies to set up a daycare service:

  1. Legal prohibition to provide this activity: The corporate purpose of the Company does not include the activities of a daycare.
  2. Tedious procedures: If the Company can provide the service according to the bylaws, then the employer shall have the authorization from the Ministry of Social Welfare and fulfil a series of requirements related to the reduction of risks, a project to create the daycare, medical agreements, psychologists, food providers, etc., all of which distances the employers from their business.
  3. Contracting authorized personnel: The person acting as director of the daycare and the technical personnel must confirm their profession an experience in the education field.
  4. Adaptation of the establishment: The establishments where the daycare operates shall have adequate areas for rest, play, feeding, cleaning, etc.
  5. Organization of shifts: the operational hours of the daycare are not provided by the law. Nevertheless, if the company has several shifts and it is not possible to accommodate those employees entitled to the daycare service in daytime shifts, then the employer will have the obligation to organize the operation of the daycare in hours that allow the use of the service for those employees that require so because of their shifts. This may result in having shifts for the daycare according to the different schedules of the Company, sometimes even the 24 hours of the day.
  6. Several working sites: When a Company has several working sites in different areas of the city, it shall set the daycare in the establishment with higher number of workers entitled to the service.

    Nevertheless, if there are branches or agencies in towns distant from the place of the main office, those establishments shall be considered as independent work sites and each one shall have its own daycare if there were fifty or more employees.
  7. Liability of the employer regarding the risks of daycare services: The assistance and care of minors implies an extremely high level of responsibility that companies must assume, with all the consequences of the risks that providing such services includes.

IV. Alternative solution:

The law provides that the employer may comply with this obligation by contracting it with state daycares or private daycares authorized by the Ministry of Social Welfare, through agreements with said entities, and communicating the option of such service to the employees so that they may opt for them or not, in which case, the cost of the service would be assumed by the employer.

If the employer opts for the service, besides the additional costs for the employer because of the lack of regulation, it is a terrible concern due to the scope of the responsibility that the company may face for the risks that the minors may have in the daycares contracted by them.

V. Conclusion:

An analysis of the necessities of the employees regarding the care of their children is urgent, as well as listing the rights associated with this, because the obligation to provide a daycare service, additional to the reduction of the working hours during the lactating period, results in a distraction for the employer. It is a requirement difficult to accomplish, not very practical, expensive and with an uncertain reach. If the purpose was the indirect protection of the minor, this measure would already be protected by the rights granted to the new parents; and, it is discriminatory with respect to the children of the employees of companies with less than fifty employees.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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