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BLP (Business Law Partners) was founded with the vision of become true business allies of their clients by combining High-quality legal services with sound business advice.

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BLP es recognized as one of the most prominent law firms in Central and Latin America, as demonstrated by the loyalty of our clients and numerous distinctions from the most prestigious international legal directories.

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In an effort to provide comprehensive service and added value for our clients, BLP has developed subsidiaries that allow us to broaden our scope ensuring quality and excellence in Central America.

Salvadoran Employment Protection Law

English

Salvadoran Employment Protection Law

On May 5, 2020, the Legislative Assembly issued the decree No 641, which contains the “Salvadoran Employment Protection Law”.

Purpose: The purpose of this law is safeguarding the job stability of Salvadoran private sector employees, guaranteeing employees a decent income, without affecting the sustainability of business activity, without distinction of sectors or economic items.

1. Obligated parties: The employers and the Development Bank of El Salvador (BANDESAL for its Spanish acronym) in its capacity as administrator of the public funds that will be assigned.

2. Measures to safeguard employment:

  • Companies duly authorized to operate during the State of Emergency must comply with their labor obligations in accordance with current law and employment contracts with regard to employees who are performing their duties.
  • During the State of Emergency employees, and employers, by mutual agreement, may establish individual vacations in advance, in a single period or in installments, and without prior 30-day notice established by the Labor Code. If mutual agreement is not possible, the employee may choose their programmable vacation in the last quarter of the year. 
  • The employer must pay the vacations in the time and manner established by the Labor Code.
  • The employees who are suffering from the disease of the pandemic or find themselves with clinical symptoms of the pandemic will not be able to enjoy the vacations in the terms mentioned above.
  • Employers who have been sanctioned by the Ministry of Labor and Social Security during the pandemic by COVID-19; once the fact that caused the sanction has been corrected, the employers may notify the Ministry of such circumstance, who will proceed to verify the correction and consequently revoke the sanction imposed within 72 hours of the request submitted.

3. Subsidies and programs to support micro, small, and medium- enterprises:

  • The subsidy program is created for employees of micro, small, and medium- enterprises registered as employers in the Salvadoran Social Security Institute, ISSS, who are affected by the COVID-19 crisis and its effects, which will be administered by the Development Bank Of El Salvador (BANDESAL) and will apply to employers who: a) Had in the registry of the Salvadoran Social Security Institute, ISSS with less than one hundred employees reported in the last return filed between December 2019 to February 2020, as applicable; and; b) had annual gross sales income in the year 2019, declared as of March thirty-one in 2020, or 2018 for an amount equal to or less than Seven Million Dollars. The Employee Subsidy Program will be equivalent to fifty percent of the employer’s monthly payroll for a maximum period of two months and for up to a monthly allowance per company of twenty-two thousand five hundred dollars, for a total of the company of forty-five thousand dollars. The benefit of the subsidy will be up to five hundred dollars per employee. The payment of the subsidy to employees will be made in full and will not be subject to withholding of taxes of any kind, or discounts for social security.
  • The Special Line of Credit for Working Capital Program is created for Salvadoran companies or entrepreneurs registered as employers in the Salvadoran Social Security Institute affected by the COVID-19 crisis. The credit will be granted at a maximum interest rate of three percent per year, for a maximum term of ten years and with a 12-month grace period, which will be administered by BANDESAL.
  • The Productive Financing Program is created for entrepreneurs in the informal sector, who have at least one credit in force in the national financial system and / or cooperative financial system or credit history registered as of December 2019, who have credit risk category A or B as of February 29, 2020, and that have been affected by COVID-19, mainly in working capital that allows their economic recovery. The credits will be granted at a maximum interest rate of three percent per year, for a maximum term of ten years and with a 12-month grace period, which will be administered by the Development Bank of El Salvador, BANDESAL.

4. Application: The decree came into effect the day of its publication in the Official Gazette, May 5th, 2020, and will end its effects when the funds destined to attend to the national emergency are spent.

 

We have a 24/7 service to address your legal queries related to the effects of COVID-19 in your company. Contact us through our Help Desk for immediate assistance at: helpcovid19@blplegal.comAccess to our Media Room for further information about legal aspects related to Coronavirus in Central America at this link.

 

 

 

 

 

 

 

 

 

 

 

 

 

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