As a result of the crisis generated by the spread of the covid-19, during the following three months companies in Guatemala will be able to defer payments to Social Security, Irtra and Intecap.
The boards of directors of the Guatemalan Social Security Institute, the Workers' Recreation Institute (Irtra) and the Technical Institute for Training and Productivity (Intecap), reported that the payments of employer's contributions for March, April and May were suspended, to be deferred in the second half of the year.
How many hours you can hire under this modality and what type of coverage the Social Security will give these workers, are some of the doubts that businessmen still have in Guatemala.
Regarding the number of hours an employee can be hired, Juan Ernesto de León, vice-president of the Labor, Legal and Human Resources Committee of the Guatemalan American Chamber of Commerce (AmCham), explained to Prensalibre.com that "...
Fitch Ratings is warning that the growing INSS deficit in Nicaragua and the failure of the reform which would have raised contributions of workers and employers, will increase the need for government financing, at about 0.6% of GDP per year.
From a statement issued by Fitch Ratings:
Fitch Ratings-New York-27 April 2018: The Nicaraguan government's rollback of social security (INSS) changes amid widespread protests will lead to increased general government financing requirements and debt in 2018 and 2019, says Fitch Ratings. The INSS cash reserves previously projected to last through 2019 are depleting faster than expected. The protests and violence over INSS changes also underscore political risks from an increasingly centralized policy-making process reflected in Nicaragua's weak governance indicators.
In Nicaragua, President Ortega has revoked the controversial law to reform the National Institute of Social Security, but demonstrations continue and business leaders are calling on the government to have a dialogue.
Five days of protests, looting and several deaths in different areas of the country is the result of the controversial reform that the Ortega administration announced on Wednesday, and which only five days later, it had to revoke in order to try to ease social tension.The reform aimed to raise the contribution paid by companies by 2% and employees' contribution by 5%, effective from July.The presidential decree 04-2018 was published this Monday in the Gazette number 76.
In Nicaragua, the private sector is opposed to the reform of the Social Security law recently approved by the Ortega administration, which increases the contribution quota of companies by 2%.
Loss of competitiveness, unemployment and greater informality is what entrepreneurs in Nicaragua predict would be the result of the reform of the Social Security law, which according to thepublicationin the official gazette, will come into force in July of this year.
In 2017, 35,055 employers registered with the Nicaraguan Social Security Institute, which represents an increase of 7% compared to the 32,744 reported in 2016.
According to the Social Security Statistical Yearbook, last year " ...
The institution highlights the strength of the economy, but warns of the need to reform the social system and the impact that approval of the NICA law in the US could have on public finances.
From February 1 until July 31 private companies that recognize contributions owed to the Social Security Institute will be exonerated from the 100% penalty charges.
From a statement issued by the Guatemalan Institute of Social Security:
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.
Radical changes will create five regimes: Social Protection Floor, Social Security Prevision, Insurance Health Care, Professional Risk Insurance and Labor Insurance Coverage .
An article on Latribuna.hn reports that "... The new legal framework will take effect in the next 45 days and will give rise to the approval of four special laws that will regulate the scope of these principles. "
The recently adopted legislation requires companies to make a tax contribution equivalent to 4% of the monthly salary of each employee on their payroll.
In addition to the monthly contribution of 4%, the new Framework Law of Social Protection System for a Better Life states that "...Employers must pay into the respective sub-account of a worker's labor reserve until the respective account reaches an amount equal to the amount of the unemployment benefit provided for in Articles 102 and 120 A of the Labour Code, at its highest level. The employer must renew contributions for workers who when their ordinary salaries increase are entitled to receive a higher amount for severance pay. "
The Honduran Council of Private Enterprise has pointed out that the Framework Law on Social Protection System "threatens sustainability of businesses and harms labor competitiveness in the country".
From a statement issued by the Honduran Council of Private Enterprise (COHEP)
The Honduran Council of Private Enterprise (COHEP) has been asserting for more than ten years the need for a comprehensive reform of social security, for this reason it congratulates President Juan Orlando Hernandez, for taking the initiative to completely overhaul the social security system in Honduras
The cameras will be installed at strategic points in the metropolitan area of San Salvador, to help monitor criminal acts.
Elmundo.com.sv reports that the Minister of Justice and Public Security, David Munguia said that President Mauricio Funes has given the order to get the funds.
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