After the mandatory time period had expired and the discussion sessions by all three sides of the National Minimum Wage Commission had failed to reach a consensus, the Ministry of Labor stepped in and made the order for a 10.40% increase in the minimum wage to be paid in two six month stages. The first (5.2%) from March 1st 2018 (i.e. the current pay period) until the 30th of August 2018 and the second (5.2%) from September 1st 2018 to the 28th of February 2019.
The minimum wage increase applies across the board to the nine sectors and this year includes the workers in the micro, small and medium businesses (known as (MYPYMES). In previous years, this group had received a different increase.
The 10th sector, employees in the special free zones (zona franca), already have their own multiyear agreement which was approved and went into effect on January 1st of this year, 2018.
After seven sessions, the National Minimum Wage Commission who will make the decision on a new minimum wage have not yet reached a formal consensus, however they anticipate that they will do so by the Thursday, March 1st 2018 deadline.
As that date approaches, the tri-parte commission, made up of the government, COSEP (businesses) and workers, are mindful of the need to come to an agreement or the Government of Nicaragua can step in and make an the increase order themselves.
Union groups are confident that this Thursday, COSEP (representing various business groups) will agree on the proposals that have been discussed in order that a tripartite agreement can be made which offers their workers a salary increase that “recovers their purchasing power”.
By law (The Nicaraguan Labor Code), the minimum wage must be reviewed twice per year.
In recent years, the commission has decided on both increases at the start of the year (rather than hold two sessions only 6 months apart), with the second half increase only requiring ratification subject to the inflation figure being under a pre-determined figure.
There are a total of ten different minimum wage sectors including the Zona Franca (Tax Free) businesses.