Proposed labor law reform would incorporate 1.5 million homemakers into Ecuador’s social security system; Some details cause confusion

National Assembly President Gabriela Rivadeneira

President Rafael Correa says that a proposal to include housewives and househusbands in the country’s social security program is simply a reflection of a changing world.

“What we are doing is recognizing the legitimacy of work that is done in the home,” he said last week at rally in Guayaquil. “It is time that we do this and it is part of our program for 21st Century Socialism,” he said.

The proposal, which appears likely to become law, is currently being debated in the National Assembly.

Correa says that overhaul of the national labor code, which includes limits on the amounts that corporate executives can make as well as restrictions on strikes by public employees, is long overdue to, as he says, “bring Ecuador into the 21st century.” The code has not seen a major revision since 1948.

“It is an excellent benefit for me and for all homemakers,” said Marcia Mendez, a housewife from Quito who attended the Guayaquil rally. “Imagine, now all homemakers can have health insurance so that we can be treated in the hospital. We will also receive payments when we retire. This is excellent,” she said.

The cost to homemakers, according to the IESS, would be based on household income and could range from $2 to $45 per month. Under the proposal, the government will subsidize any shortfall.

The inclusion of housewives in the social security (IESS) system is creating some confusion among its supporters as National Assembly President Gabriela Rivadeneira says that membership will be mandatory under the new law while others believe it should be voluntary. Rivadeneira said housewives who do not pay into the system would be fined, like other employers, if they do not make contributions.

Former IESS director, Jorge Madera, believes that membership should be voluntary and says that the Assembly should consider the issue carefully.

Madera says the question is similar to the one that caused controversy earlier in the year when it was suggested that independent contractors, including taxi drivers, be required to contribute to IESS. After a series of protests, it was decided that contractors could opt into the system voluntarily but would not be required to join.