- Changes in Labor Law Matters

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* Substantial Reform of Labor Regulations


Although termed a “partial reform” of the regulations to the Labor Law, this decree has substantially modified the previous regulations. By this decree, 93 articles of the previous regulations have been modified or added. Moreover, 36 articles have been eliminated, and eight other separate legal norms have been repealed. Among the principal changes in the new regulations are 1) an emphasis on the application of all national and international norms that are the most favorable to the worker; 2) increased authority of the labor inspectorates to intervene private companies wishing to dismiss workers for reasons of economic hardship; 3) enhanced authority of the state in all matters affecting labor organization and relations; 4) increased regulations and restrictions in the case of activities affecting essential public services, especially in the case of labor strikes; 5) insertion of labor representatives on the boards of directors of private companies when such companies enjoy special protection of the state; 6) inclusion of the norms regarding the labor solvency certificate for all entities that have any dealings with the state; and 7) the transfer of labor obligations to the companies using the services of temporary workers, who before were deemed to be the employees of the such temporary manpower companies.


        Partial Reform of the Regulations to the Labor Law

        Decree No. 4.447

        Official Gazette No. 38.426 of April 28, 2006



* Obligatory Increase in the Minimum Wage for All Employees


As has become traditional, the government decreed an increase, this time of 15%, in the minimum wage as of May 1, 2006. However, breaking with tradition and prior norms, on this occasion the government also, first, decreed a further increase of 10% over the new minimum wage to take effect on September 1, 2006 (for a 26.5% increase for the year). Secondly, the government has decreed that what had previously been the urban minimum wage applicable in the case of companies and other entities with over 20 employees is now to effectively be the national minimum wage, applicable to all employees regardless of whether urban or rural, in large or small enterprises, and which is also to be applicable to domestic employees. These same increases in the minimum wage are also to be applicable to all public and private sector pensioners. The minimum wage for adolescent apprentices was also increased by similar percentages. Accordingly, at the official exchange rate the new minimum wage after next September will be US$238/month (US$179/month for apprentices).


        Increase in the Minimum Wage

        Decree No. 4.446   

        Official Gazette No. 38.426 of April 28, 2006



* New Regulations to the Law of Meals for Workers


This decree establishes regulations for the Law of Meals for Workers, which applies to all entities with more than 20 employees and to all workers earning less than three times the minimum wage. Affected employers are either obligated to provide at least one balanced, nutritious meal during the work day or to compensate such workers by providing food coupons, tickets or electronic cards for the minimum monetary value established in the law, in which case such coupons or cards can only be used to purchase food items. All specialized companies that either provide meals to workers or such coupons or cards must be registered in the Ministry of Labor. The application of this law and its regulations is to be administered by the Ministry of Labor, the Ministry of Health, the consumer protection agency, and the National Nutrition Institute, any of which may inspect and prosecute entities for alleged violations.


Regulation to the Law of Meals for Workers

            Decree No. 4.448

            Official Gazette No. 38.426 of April 28, 2006


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