Ecuador Gender Pay Gap Reporting: What You Need to Know

To find the full text of the global pay reporting law in Ecuador, refer to the General Regulation on the Violet Economy Impulse Organic Law published in the Second Supplement of the Official Registry Nr. 444 on 25 November 2023 (often referred to as the Violet Economy Law). Also see Ministerial Agreement No. MDT-2024-099.

The requirement in Ecuador focuses primarily on gender. The reporting requirements and metrics are designed to assess and address the gender pay gaps within organizations.

While the law doesn’t explicitly require reporting on race/ethnicity pay gaps, many organizations also analyze race and ethnicity gaps as part of their pay transparency strategy, where it is permitted by law.

Syndio’s PayEQ solution allows you to run pay and opportunity audits to ensure pay and advancement are truly merit-based and not subject to unlawful bias or discrimination. This ensures fair pay and advancement for all employees and gives you insight into your pay practices.

No. In Ecuador, only employers with 50 or more employees are required to prepare an equality plan.

The Violet Economy Act provides an optional certification process, called the Violet Seal, for employers that stand out in the application of policies and equal treatment of female and male workers. This voluntary certification process requires that companies apply to the Ministry of Labor, which will issue a decision within 60 days.

The Ministry of Labor will consider, among other factors, the balanced presence of women and men in the management bodies and in the different professional groups and categories of the company, the adoption of equality plans or other innovative measures to promote equality, as well as nonsexist advertising of the company’s products or services.

The Violet Seal certification is valid for one year.

Syndio provides software and expert professional services to help multinational organisations comply with pay equity, pay reporting, and pay transparency regulations. Syndio helps you analyze, remediate, explain, and report on gaps so you can stay on top of compliance in Ecuador. Learn more: https://synd.io/global-pay-reporting/.

The law in Ecuador analyzes pay gaps, not pay equity. What’s the difference?

An unadjusted pay gap (also called an “uncontrolled pay gap”) is the difference between the median or mean pay of two groups, such as men and women.

• Median pay gap: Imagine lining up all the earnings for two groups of employees (e.g., men and women) from lowest to highest. The median pay gap is the difference between the middle earnings in each line. It’s a good indicator of typical pay differences.
• Mean pay gap: This compares the average earnings of each group. However, it can be skewed by extremely high or low earners.

Pay equity, or the adjusted pay gap, accounts for factors that can legitimately explain differences in pay, such as performance ratings, tenure with the company, or location.

The median and mean pay gaps provide valuable insights, but they don’t tell the whole story. There may be legitimate reasons for pay differences between employees. The adjusted pay gap (pay equity) accounts for these factors, revealing whether a pay disparity truly exists (which is unlawful in many countries) so you can take corrective action. Syndio’s PayEQ software is the trusted solution for global enterprises to rapidly identify, address, and prevent pay disparities.