THE NEW REGULATION ISSUED BY THE MINISTRY OF LABOR THAT REGULATES THE HIRING OF PREFERRED PERSONNEL IN THE AMAZON REGION INCLUDES PENALTIES FOR NON-COMPLIANCE OF UP TO 256 UNIFIED BASIC SALARIES (CURRENTLY $117,760 USD)

On May 20, 2024, Ministerial Agreement MDT-2024-060 issued by the Ministry of Labor (hereinafter referred to as the “Agreement“) was published in Official Supplement 561.

The Agreement contains the new technical standard for the implementation of the preferential employment right as established in the Organic Law for the Planning and Integral Development of the Special Amazon Territorial Circumscription (hereinafter referred to as the “Law“).

Below are the key points outlined in the Agreement:

1. Special Amazon Territorial Circumscription

Institutions, whether public, private, mixed, or community-based, operating within the provinces of Morona Santiago, Napo, Orellana, Pastaza, Sucumbíos, and Zamora Chinchipe (hereinafter referred to as “mandatory employers“), are obligated to adhere to the provisions set forth in the Agreement.

2. Preferential Employment Right

The 80% of the workforce of mandatory employers must consist of Amazonian residents, distributed as follows:

• 60% from local residents, defined as inhabitants within the area of influence;
• 20% from residents of the province where operations are conducted; and,
• 20% from other Amazonian residents.

This provision does not apply if there is a lack of qualified workforce as stipulated in Article 41.1 of the Law.

3. Amazonian Residents

Amazonian residents include:

• Individuals belonging to Amazonian peoples and nationalities;
• Those born within the circumscription;
• Individuals who have resided for at least the past 6 years or have been registered in at least the past 3 electoral processes within the circumscription.

4. Inclusion of Amazonian Peoples and Nationalities

At least 10% of the workforce of mandatory employers with more than 25 workers must consist of individuals belonging to Amazonian peoples and/or nationalities.

5. Personnel selection process

Mandatory employers must use the “Public Employment Service” platform of the Ministry of Labor for hiring personnel.

If the required personnel are not available, the Ministry of Labor will certify the non-existence, which will serve as a document enabling application for legal exception.

6. Sanctions

Non-compliance will be penalized by the Ministry of Labor with fines according to the annual income of mandatory employers of up to 256 mandatory statutory wages (currently $117,760 USD).

Recidivism will be penalized with double the fine.

© TobarZVS 

This publication contains information of general interest and does not constitute legal opinion on specific issues. Any analysis will require legal advice from the Firm.