National Assembly Approved the Organic Law for Young Adults

On January 4^th, 2023 the “Organic Law for Young Adults” (hereinafter the “Law”), was published in the Supplement to the Official Gazette 222.

• Context

Since March 2016 -by the Organic Law for Promoting Employment for Young Adults, the employment agreement for young adults was incorporated into the Labor Code and with it the obligation to hire young adults (art.34.1). The above-mentioned Law provided that the employment agreement for young adults may be concluded with individuals between 18 and 26 years old.

The Ministry of Labor by Ministerial Agreement MDT-2016-158 of August 2016, provided that employers with more than 50 employees are obliged to hire young adults in at least 10% of their annual payroll increase generated in each fiscal year. At the same time, it regulated that only those individuals who have not paid more than 6 months (continuous) of contributions to the Social Security under a full-time employment relationship shall be considered part of the young employees’ quota.

• Amendments and additions set by the Law

1. Young employee. – Reformed Article 34.1 of the Labor Code and provides that employment agreement for young adults may be concluded whit individual between 18 and 29 years old.
2. Study leave. – Incorporates into Article 47 of the Labor Code as an obligation of employers to grant young adults up to 3 hours per day for study purposes. The hours shall be recovered by the young adults.
3. Priority in hiring. – Employers shall encourage hiring of young adults who have completed their pre-professional internships and/or internships in the entity.
4. Mandatory quota of young employees. – Within 120 days, the Ministry of Labor shall issue secondary regulations on the mandatory hiring of at least 10% of young adults out of the total payroll of employers.

For more information on the obligation to hire young adults, please do not hesitate to contact our Director of Labor Practice, Marta Villagómez (mvillagomez@tzvs.ec).