Hiring workers in Ecuador is not quite the same as in the United States. Since I have neither worked nor hired employees in Canada, I will not attempt to make a contrast of situations. I will start by saying that ignorance is not always bliss. But, alas, I truly was ignorant – but I learned a lot!
The developer and his wife kindly handed over the Las Palmas finances to me in April 2012. I thought this was no different than in the states – there is HOA and the lot owners or home owner pay into the fund. In my experience, the fund is set at a determined rate by amount of labor and expenses – sometimes set at a forecasted rate. My experience was a bit more complex than this method. I took the finances without discussions with the developer, because they were in a haste to leave the country for vacation or some random other reason.
We worked diligently to gather the funds from the lot owners. 2012 proved fairly simple as most had already paid. 2013 proved a bit more difficult, because now word of the HOA not being a registered, legally acknowledged HOA had spread through the community. There were maybe 3 people who did not pay for 2013 (out of 37 lots). As 2013 came to an end, it became apparent that the ‘HOA’ would not have enough money to pay the three employees, so I requested an additional payment for 2013. I also indicated that the fees for 2014 would need to be increased in order to afford the workers. This was met with resistance as expected.
While all this is occurring, the HOA is trying to work with the developer to finish or fix things like electricity lamps not installed, electricity to street lights not hooked up or left unwired, some type of finish on our streets as they are simply dirt (mud when it rains), completion of our perimeter fence (aka ‘secured community’) and a plethora of other issues. Some I care about – others I could care less. But, be that as it may, the HOA fees were not going to cover wages for the workers and repairs of any sort.
In 2014, word of the developer starting new developments and possibly leaving ours to sit in an incomplete fashion began to surface. More lot owners decided to put their lots up for sale and not pay their dues. The promise, of course, is to pay the dues upon the sale of the land. But, the land is not selling, because Las Palmas is the black eye in Puerto Cayo for many expatriates looking to purchase land. I love the fact that no one wants to build or buy right now – we have a lot of beach and land around us that no one uses or intends to use. For us, it is a benefit….
In July 2014, I was asked to get a Registro Unico de Contribuyentes (RUC) for the workers by the Labor Relations Board. Along with their interpreter and at the advice of a Las Palmas lawyer, I was told that since I physically handed the guys their cash, in the eyes of the law, I am physically responsible and considered their employer. In order to provide myself some protection and to pay their necessary SS, I got the RUC. The RUC process is simple enough and the actual fractoras only cost $10. And so began the beginning of the oddest employer/labor relations board relationship I have even witnessed.
The labor board initiated contracts; the workers wouldn’t sign. So, without the contracts, I am again at risk. So, I determine that since we have no money, and we have no contracts, it is time to let the workers go and start fresh. I do not believe I made the decision in a vacuum, but have since been accused of making the decision by myself. Be that as it may, I had no clue I had that type of influence on the folks here in the community.
So, the termination process started. It has been several trips to the labor relations board with lawyers and translators. Since, this is a new area for me, I want to make sure I understand everything that is being requested, communicated, and agreed upon. I will not bore you with the details, but it cost me about $50 to get these guys on contract, which they wouldn’t sign, and will cost over $9,000 to get them off contract, which was left unsigned.
My advice to you as an expat moving here – do not let your builder/developer talk you into taking over the finances, especially if they seem to eager to get rid it of, without first ensuring you live in an urbanization, you get the contracts for the workers and go with your developer to the labor board to make sure the contracts remain the same, get the inside knowledge on how much is the social security, etc. Do everything you can and ask others who have gone before you.
I made a bitter mistake of not asking or of not knowing what to ask, but believe me when I say, I am now keenly aware and if you ever have a question – ASK.