The main advantage of this mechanism is that the compensation paid by the company is exempt from labor costs, and can be used by employees in shops to buy food, medicine and other items.

Ana Lorena Broce, general manager of Vale Panama, reported that a lot of companies have migrated from the paper system to the electronic cards that are accepted at more than one thousand outlets.

Broce "... argues that these tools generate tax benefits, as they are exempt from labor costs. 'Employers can give this form of compensation at a lower cost and in turn the employee is rewarded with a higher purchasing power'. "

"... In Panama up to 30% of wages can be given in this format and there is a ceiling of $350 using these instruments. For example, if a person earns one thousand dollars, the maximum they can receive is $300 a month, but if the salary is $5,000, the maximum is $350. "

More on this topic

Incentives for Agricultural Production

October 2019

The National Assembly approved a bill that establishes that by 2024, 100% of the resources retained by the Special Interest Compensation Fund will go to the agricultural sector.

The Special Interest Compensation Fund (Fondo Especial de Compensación de Intereses, FECI) is fed by the 1% tax levied on the granting of all loans exceeding five thousand dollars in both commercial and consumer banks.

Two Pluses and a Negative

February 2013

Feedback to employees should contain both praise and criticism.

In his discussion in an article in Martesfinanciero.com, Ernesto Bazan notes the importance of the art of the sandwich, when talking with employees about their performance evaluation.

Bazan highlights the sandwich technique as being "...

Rewarding Good Performance

August 2009

Acknowledging and rewarding good performances improves employee satisfaction and increases the organization's productivity.

Explicit recognition must be part of the staff management strategy, as much as an adequate remuneration policy. Salary is not the only source of satisfaction for employees.

Panamanian industrial companies oppose government proposal

August 2008

The Industrial Union of Panama will not accept the proposal made by President Martin Torrijos to grant a bonus to employees.

The Union's General Assembly pointed out that what is need at this time are solutions "for the various structural problems that are affecting us negatively and preventing us from being more productive and competitive, and that will help to improve the purchasing power and well-being of all Panamanians."