By announcing that the Executive Branch will be modifying its proposal to eliminate the Dominican Social Security Institute (IDSS) and replace the decades-old institution with a National Institute for the Prevention and Administration of Labor Risks (Inaril), government officials hope to calm down the labor unions threatening broad actions to save the sacred severance regulations. The proposed modification is so that Article 4 of the legislative proposal does not make mention of the creation of the Labor Protection Fund, and so provide assurances to the labor sector that severance pay will remain intact.
Legal Advisor to the President Flavio Dario Espinal and the Labor Minister Winston Santos made the announcement during a press conference late last week. They were emphatic in saying that the government does not intend to eliminate severance pay as established. They also said that the issue of severance should be taken up during the ongoing tripartite (labor-employer-government) talks with regard to the Labor Code. Labor representatives recently marched to the Presidential Palace to demand the continuance of the current severance pay legislation.
Advocates of changes say that the present system creates a major burden on companies that are mandated by law to pay upwards of 50% in benefits to employees. Likewise, the situation has spurred a legal mafia with lawyers irregularly taking companies to court to demand large severance payments even for persons that never were employed. Small companies many times find themselves having to borrow to pay employee severance.
Likewise, many observers say that wages in the country are kept low to accommodate the hefty burden of benefits created by the law. This is also leading to fewer jobs, with major companies in areas such as the Santiago free zones now installing robots to replace human jobs.
Read more in Spanish:
Diario Libre
15 April 2019