Businesses will have to apply an initial increase of 4,125% from 1 March 2017 and a second increase, of the same amount, on September 1.
The agreement was approved with the consensus of the private sector, trade unions and government. The decision to establish the increase at 8.25% came after the business sector proposed an adjustment to 7.63%, and unions, between 9% and 10%.
Starting from January 1, 2017 new rules are in effect which govern minimum wages for agricultural, non-agricultural, export and maquia activities.
Government Agreement 288-2016 published in Diario de Centroamérica:
Article 2.Minimum wage for agricultural activities.For agricultural activitiesthe minimum wage is set at the sum of EIGHT Y SIX QUETZALES AND NINETY CENTS (Q.86.90) DAILY equivalent to TEN QUETZALESAND EIGHTY-SIX CENTS (Q. 10.86) per hour in the daytime in an ordinary work shift or what is proportional to mixed or night shifts, these wages will apply from 1 January of the year two thousand and seventeen.
Memorandum on minimum wages and payment schedule for tax liabilities for December 2016.
From a Memorandum sent by Tezó and Associates:
On 30 December 2016 the Ministry of Labour and Social Welfare published in the newspaper Diario de Centro América Governmental Agreement No. 288-2016, through which the new minimum wages are established for agricultural activities, non-agricultural activities, exports and maquilas, with effect from 1 January 2017.
In September 2016 an annual increase of 10% was registered in the number of workers signed up with the social security department and a 5% increase was recorded in the average nominal wage.
Membership of the Nicaraguan Institute of Social Security (INSS) grew by 9.8% in September compared with the same month in 2015, with noteworthy sectors being trade, hotels and restaurants, with an increase of 18%, transport, storage and communications, with 17%, construction with 15% and community, social and personal services, with 11.5%, according to Central Bank of Nicaragua.
The increase will be staggered: 5% from June 1, 2016, 5% from June 1 2017, and 5% from June 1 2018.
From a statement issued by the ANEP:
The private sector represented in the National Minimum Wage Council, agreed to accept the request from workers to increase the monthly basic salary in the sectors of industry, maquila and the various agricultural sectors by 15%.
This increase will be implemented gradually in three stages:
5% from June 1, 2016, 5% from June 1 2017, and 5% from June 1 2018.
The only exception is the trade and services sector where the increase will be 4.5% per year, with the same date of entry into force, taking into consideration the weak situation of small businesses and the risk of an increase in informality being quite high.
Costa Rican industrialists warn that increasing the minimum wage in the private sector by 34% will cause more unemployment and encourage more companies to operate unofficially.
The bill concerning the minimum wage will endanger plans for new hires in the private sector, and its passage into law could cause more informality and more unemployment. The proposal aims to increase the minimum wage by 34% for unskilled employees in the private sector. With the increase, the salary would go from $534 to $718.
After the government repealed differentiated wages, the Guatemalan business sector will be proposing new options such as work paid by the hour and other initiatives to promote investment and employment.
Entrepreneurs will not stand idly by and will be proposing new alternatives for flexible working hours and wage schemes to improve conditions and attract more investment to the country, especially in areas far from the capital. Providing an incentive to foreign and local companies such as a differentiated salary scheme is no longer a possibility, therefore they will be working on schemes such as part-time jobs or hourly rate jobs.
Bowing to pressure from those who can choose what to eat every day, the Morales administration has repealed the differentiated minimum wage, denying the right to choose how to live to those who do not have that option.
President Morales has put an end to an initiative that aimed to attract investment to four municipalities by applying differentiated minimum wages, yielding to the the high profile power of those who, from the comfort of a heated office and while receiving thousands of dollars in salaries each month, feel that it is reasonable remove the possibility of having a job from those who have nothing.
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