As was anticipated at the end of last week’s minimum wage discussions, this morning’s meeting produced a consensus among the tripartite wage commission resulting in an increase in the Nicaragua minimum wage for March 1st 2022 of 7%.
The increase will apply to nine out of the ten categories (all except the Tax Free Trade Zones, known as Zona Francas who are on a different union negotiating system).
The three groups; employers, unions (workers) and the government reached an agreement that was a big improvement on the numbers on the table after the initial proposals of last week. At that meeting they were talking about an increases ranging from 3% to 5.5%.
The new Nicaragua minimum wage is effective from March 1, 2022 until February 28, 2023. The outcome of the minimum wage negotiations affects about 180,000 workers in that sector.
Normally, the minimum wage is reviewed every 6 months. However in recent years a first half raise was agreed, followed by a pre-agreed second half increase subject to the economy remaining within certain parameters (economic growth, accumulated inflation etc.). This is the third year where the minimum wage has been announced as an annual increase.
It was acknowledged by the employers group, the Association for the Promotion of Development and Sustainability of Nicaragua (APRODESNI), that the increase will raise some sectors to a level above the personal tax ceiling which is currently C$ 100,000.00 per year or C$ 8,333 per month.
The association president; Leonardo Zacaría Corea said they will be making a proposal that will prevent those sectors from losing some of what they will receive. Previously it was suggested that the personal tax ceiling be increased to 120,000 Córdobas per year.
In Nicaragua, the typical working week for day workers (working 8 hours per day anytime between 6am and 8pm) is 48 hours (Monday to Saturday). The Labor Code identifies night workers as working 7 hours per day anytime between 8pm and 6am for a total of 42 hours per week and “Mixed” as 7.5 hours per day of mixed days and night hours for a maximum of 45 hours weekly.
