Labor, employers and government agree on new minimum wage scale

The National Wages Committee (CNS) reached an agreement for minimum wage increases. Labor Minister Luis Miguel de Camps announced the new classification of companies depending on number of employees and sales volumes. Minimum wages are set according to the new categories. The agreement was reached during a meeting of the CNS, the government body that brings together employers, labor and government and meets every two years to set minimum wages.

Companies with more than 150 employees and sales of more than RD$202 million will raise minimum wage pay by 19%, bringing the minimum wage to RD$21,000.

Medium-sized companies will pay 59% more, with the minimum wage increasing to RD$19,250. Medium-sized companies have 51 to 150 workers and sales of RD$54 to RD$202 million a year.

Businesses with 10 to 50 workers and sales from RD$8 million to RD$54 million will qualify as small companies and will increase minimum wage 20.2%. This means their minimum wage is RD$12,900.

Micro businesses will increase wages by 11%, or to RD$11,900.

Companies may apply the wage increase fully starting 16 July 2021 or in two parts, starting this July and the full amount as of 1 January 2022.

The levels set will serve as benchmark for the determining of the wages in sectors that have their own wage levels, such as tourism, farming, construction and free zone manufacturing. The adjustments of these minimum wages are expected to be announced shortly.

It is up to companies to adjust the wages of those who make more than minimal wage.

Speaking during the official announcement of the minimum wage increases, President Abinader said the minimum wage issue is of vital importance for the country’s economic and the social sustainability.

“This historic agreement marks a milestone in the Dominican Republic and was achieved for the first time despite the difficult times, with the parties agreeing on real average wages, above inflation,” stressed the President.

He also emphasized that this agreement brings a reclassification of companies to allow for a different reality and adjusting to real needs.

“It is time to improve salaries to be more competitive, generate more sales, collect more taxes, improve our productivity, add value, generate better services and establish a path of irreversible growth,” said President Abinader.

Deputy Minister of Economy Pavel Isa Contreras said the objective is to restore the buying power to the general public and households. He explained that the wage raises will accelerate the present recovery.

What is new is that the announcement is carried out with a classifying of companies depending on their number of employees and sales. In the past, there was a minimum wage and sectorial wages for specific categories such as construction workers, farming, tourism and free zone workers.

Isa Conde says companies have the option to implement the wage increases all at once or in two phases, reducing the impact on small and microbusinesses.

Isa Contreras forecast a conservative GDP of 7.5% growth for 2021. This is not only a rebound of the economy, but also greater growth than in pre-pandemic year of 2019. In the second half of the year the wage increase will accelerate spending, and public investment will step up in the second semester of the year to spearhead economic growth. Isa Contreras says that quality of living of people rather than economic growth is the main objective of the government authorities.

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15 July 2021