As new wage and hour or work-schedule regulations have been recently brought fully into effect, employers face risks of being sanctioned in case the Ministry of Labour and Social Security finds that such rules have been breached.

In fact, the duration of the ordinary work period as of May 7, 2013 may not exceed 40 hours per week in daytime, 37½ hours per week in the mixed day, and 35 hours per week in the night shift, except in the case of continuous and shift work, and special or agreed schedules.  Moreover, overtime work is limited to 10 hours per week and 100 per year per worker.

In that sense, article 514 of the Labour Law (“the LOTTT”) gives full power to the Office of the Labour Inspector to conduct inspections at companies’ facilities for a wide range of employment matters, including work-schedule compliance.

Sanctions

In accordance with the Labour Law, there are three main types of sanctions, namely, economic, criminal and administrative sanctions.

Under article 525 of the Labour Law, an employer could be fined a considerable amount of money for allowing the performance of overtime work without the previous authorization of the Ministry of Labour and Social Security.

In that regard, overtime work is paid with a surcharge of 50%. However, if previous authorization to work overtime is not requested, the employer would be obliged to pay 100% of surcharge to the employee undertaking such overtime work, regardless of the pecuniary sanction that could be imposed by the labor authority.

In addition, these amendments of the work-schedule regime comprise a series of specific provisions on valid workday and weekly rest, meal and rest periods, among other binding issues that, as a consequence, should also be observed by the employer.

Article 532 of the Labour Law states that if the employer disobeys the mandate of the Labour Inspector, as entailed in his/her inspection order, a fine would be imposed as well as another economic sanction if recurrence is committed by the employer, pursuant to article 540 of the Labour Law.

To this extent, the Labour Law establishes that in case of default by the employer in payment of the fine or to comply with the order of the Labor Inspector, representatives could be subject to imprisonment.

On the administrative side, under article 553 of the Labour Law, the Ministry of Labour and Social Security will reject or take away employer’s Certificate of Good Standing (the so-called “Solvencia Laboral”) for infringing labour and employment regulations. It is worth noting that, in most cases, without the aforementioned Certificate of Good Standing, companies would not be able to do business effectively in Venezuela.

How to prevent problems?

Employers should get acquainted with these new work schedule modifications. In this process, employers should adapt their compensation schemes and shifts, including but not limited to overtime working schedule, days of rest and the daily legal work limit.

Since this is a sensitive matter, due to the criminal implications involved, it is strongly recommended to consult a local legal advisor that could provide personalized help according to the solutions needed.

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