On October 18, the President of the Republic published Decree Nº 503 (the Decree), establishing an increase of 10% in the minimum salary for public and private sector workers from November 1, 2013, using the 2013 National Consumer Price Index (INPC) as a reference. Below you will find our comments on the most relevant aspects of the Decree:

Minimum salary

The Decree established the following minimum salary rates for workers, effective as of November 1, 2013, regardless of the number of workers employed in an enterprise:

Category

As of 1/11/2013

(day shift) 10%

Monthly

Daily
Public and private sector workers Bs. 2,973.00 Bs. 99.10
Adolescents/ Apprentices Bs.2,211.00 Bs. 73.70

According to Article 172 of the Organic Law of Work and Workers[i] (LOTTT), the minimum salary of workers contracted part-time may be paid in proportion to the agreed work day.

Retirees and pensioners

The Decree adjusted the pensions of retirees and pensioners of the National Public Administration at the same amount established as the minimum salary, namely Bs. 2,973.00 per month starting November 1, 2013.

The minimum amount established for the pensions granted by the Venezuelan Institute of Social Securities is Bs. 2,973.00 per month starting November 1, 2013.

Adolescent apprentices

The minimum salary for all adolescent and apprentices will be Bs.2,211.00. However, the Decree establishes that when the work rendered by adolescents is performed under the same conditions as the rest of the workers, their minimum salary will be as provided in Article 1 of the Decree, namely Bs. 2,973.00 per month as of November 1, 2013.

Method of payment

According to the Decree, the minimum salary must be paid in cash and no type of salary-in-kind shall be understood to form part of such minimum salary.

Penalty

Article 7 of the Decree establishes that any employer paying a salary below the one established as the minimum national salary will be sanctioned according to Article 533 of the LOTTT, with a fine of no less than the equivalent of 120 Tax Units nor more than the equivalent of 360 Tax Units.

Effects of the salary increase on labour legislation

Many of the labor benefits and obligations are calculated based on the minimum salary. Below you will find how the variation in the minimum salary will affect the most relevant labor benefits and obligations under Venezuelan labor legislation:

Comprehensive care for workers’ children

According to Articles 343 and 344 of the LOTTT and Articles 101 and 102 of the Regulations to the abrogated Organic Labor Law[ii], which is still in force, every employer with more than 20 workers must have a child care or initial education service during the work day for workers with children under the age of 6, and whose salary is less than five minimum salaries, which as of November 1, 2013, corresponds to the sum of Bs. 1,189.20.

Meal allowance

According to Article 2 of the Partial Reform of the Workers’ Meals Law[iii], every public and private sector employer must grant its workers a meal allowance for every day actually worked, provided they earn a normal salary of no more than three minimum salaries, which are now equivalent to Bs. 8,919.01 as of November 1, 2013.

Parafiscal contributions

Social Security (Health and Pensions):
  • Employer’s rate: 9 to 11%.
  • Employee’s rate: 4%.
  • Maximum Amount of Minimum Salaries: Bs. 14,865.02 from November 1, 2013.
  • Calculation Base of Minimum Salaries: Five minimum salaries.
  • Base Salary: Normal Salary.
  • Employer’s Rate: 2%
  • Employee’s Rate: 0.5%
  • Maximum Amount of Minimum Salaries: Bs. 29,730.03 as of November 1, 2013.
  • Calculation Base of Minimum Salaries: Ten minimum salaries
  • Base Salary: Normal Salary
Employment Benefits Regime[iv]:
  • Employer’s Rate: 2%
  • Employee’s Rate: 0.5%
  • Maximum Amount of Minimum Salaries: Bs. 29,730.03 as of November 1, 2013.
  • Calculation Base of Minimum Salaries: Ten minimum salaries
  • Base Salary: Normal Salary

For further information, please contact one of the following lawyers: Juan Carlos Pró-Rísquez, Esther Cecilia Blondet Serfaty, Yanet C. Aguiar or Eirys Mata Marcano

[i]       Organic Labor Law, for Male and Female Workers. Official Gazette of the Bolivarian Republic of Venezuela (OGBRV) N° 6,076 Special of May 7, 2012.

[ii]       Regulations to the Organic Labor Law.  OGBRV Nº 38.426, of April 28, 2006.

[iii]      Partial Reform of the Workers’ Meals Law. OGBRV N° 39.666 of May 4, 2011.

[iv]      Employment Benefits Regime Law. OGBRV N° 38.281of September 27, 2005.