PASO 5
Hiring & labor compliance
Hiring employees in El Salvador triggers a set of obligations that must be met before day one. The company must be registered as an employer, employees must be enrolled in mandatory regimes, and contracts must comply with the Labor Code. Operating outside this perimeter creates penalties and legal exposure that compound quickly.
Our scope includes employer registration, drafting and execution of contracts (indefinite, fixed-term, professional services, and others), employee enrollment, advice on the most suitable hiring model, and ongoing support for recurring obligations.
Our scope includes employer registration, drafting and execution of contracts (indefinite, fixed-term, professional services, and others), employee enrollment, advice on the most suitable hiring model, and ongoing support for recurring obligations.
Mandatory entities and employer registration:
- ISSS (Salvadoran Social Security Institute) — employer 7.5%, employee 3% of insurable salary.
- AFP (Pension Fund Administrator) — employer 8.75%, employee 7.25% of insurable salary.
- INCAF — 1% of payroll, applicable to companies with 10 or more employees.
- Ministry of Labor — employer registration and contract registration.
Typical documentation for registering employers and employees:
- Certificate of incorporation and company Tax Identification Number (NIT/NRC).
- Identity document of the legal representative.
- Employee's identity document and Tax Identification Number (NIT), address, and personal information.
- Signed employment contract.
Deadlines:
- Employer registration prior to the first contract.
- Registration of each employee: ideally before the first day of work and, at the latest, within the deadlines established by the institution.
Internal work regulations:
- Mandatory when the company has 10 or more permanent employees, and must be approved by the Ministry of Labor.