It took until the last of seven scheduled weekly meetings for the tri-party Minimum Wage Commission to come to a consensus, however; today an agreement was reached and a minimum wage increase approved by MITRAB.
The estimated 200,000 workers in Nicaragua on minimum wage will receive a 3% increase in their monthly salary (except for the small, national artisan and tourist industry that will only get 1%).
The increase will take effect for work completed from March 1st 2021.
As with last year, the minimum wage increase will be a one-time increase for a 12 month period, the next review will take place as it did this year, in January and February for a March 1st change. (This means there will be no changes to the minimum wage in September 2021)
History
2021 National Minimum Wage Commission
The commission was installed on Thursday the 14th of January 2021, a process that starts a pre-determined set of weekly meetings. The commission had the task of arriving at a consensus by the end of the last scheduled meeting on Thursday the 25th of February, or the Ministry of Labor would set the minimum wage for the next period, starting 1st March 2021.
The commission takes into account economic indicators such as 2020 Gross Domestic Product (GDP), the price of the “Basic Basket”, a list of 53 items (23 of which are food), that a household of five persons (3 adults and 2 children) would need to budget for in an average month. Also considered are the country’s economic growth and inflation.
As is normal, the tri-party National Minimum Wage Commission is made up of representatives from the government, unions (representing workers) and the private sector, represented this time by the organization called the Nicaraguan Council of Micro, Small and Medium Enterprises (CONIMIPYME).
This year, COSEP (The Superior Council of Private Enterprise) had again decided not to participate in the commission’s round table meetings to represent the private sector. However; Michael Healy (COSEP President) suggested freezing salaries but raising the income tax payment ceiling from 100,000 Córdobas of earnings per year to 200,000 Córdobas per year. COSEP suggested this would give them back some of their lost purchasing power.
2020
There has been no minimum wage increase since February 6th, 2020 when the Minister of Employment signed the agreement number ALTB-01-02-2020 establishing an across the board increase of 2.63% for nine of the ten minimum wage categories.
The tenth category being the “Industries Subject to a Special Regime (Free Trade Zones) who received an 8.25% annual increase effective January 1st, 2021 as per a 5 year labor agreement.
NOTE: The normal monthly minimum wage is based on a 6 day work week of Monday to Saturday, 8 hours paid work per day for a total of 48 hours weekly, night shift workers get 7 hours paid work per shift for a total of 42 hours per week and a mixed work week of nights and days is 7.5 hours or 45 hours weekly.
