Minimum wage: What happened and what do employers warn about?

The issue of the new minimum wage must be defined at the end of this week, said v Minister of Labor and Labor Development (Mitradel), Doris Zapata.

Zapata estimates that the new minimum wage should enter into force in the second half of January, which would give employers space to articulate and organize their procedures on payrolls.

The National Minimum Wage Commission The last meeting was held on December 27, without the parties reaching an agreement, leaving Mithradel the last word.

For the labor sector, the minimum wage adjustment should not be below 32.60% for minimum wages in large companies and 20.3% in small companies, taking into account that an average family of 4 can cover the needs of your normal household requires more than $1,504.09 monthly income.

The trade union sector has also questioned the mechanism used in the Regulations on the minimum wages define the size of the company, solely based on the number of workers, and not with regard to their gross annual income, as they are classified in Authority for Micro Small and Medium Enterprises (AMPyME).

In the meantime, National Council of Private Enterprise (CONEP) has requested an adjustment that ensures the conditions that enable the recovery of the economy and employment, given the scenarios we have been facing in recent years.

In his analyzes and conclusions, CONEP claimed the weakened financial capacity of the company. It is stated that five of the six sectors that employ the most in the national economy show a deterioration in the levels of net taxable income of legal entities by 2022 compared to the pre-pandemic year 2019, with a negative increase, namely: construction, transport and storage, agriculture, hotels and restaurants and manufacturing industry.

For the business sectors, the rigid structural trend of the labor market is deepening with the effect of the crisis the recent blockade of road infrastructure in the country in the most dynamic quarter of the economy, as well as the not at all positive outlook for 2024, forces the country to prioritize job preservation, facilitating youth employment, curbing and reducing informality and recovery of employment in strategic sectors.

Representatives of the employer sector insist that any increase that is not directly related to the reality of the country and companies could cause a setback in national efforts to recover employment levels and reduce youth unemployment.

“Given the assessed objective conditions, we hope that no decisions will be made that cause great harm and affect the promotion of employment and the fight against informality,” andConep, which brings together different business unions, insisted.

However, for workers, the living wage must take into account not only the cost of food, but also all the goods and services that households consume, such as basic services such as electricity, water, fuel, internet, housing, health, transport, education, clothing and recreation.

The incomes of the working population are increasingly affected by the decline in purchasing power due to the influence of the general rise in prices, dam National Confederation of Independent Trade Union Units (Conusi) and National Council of Organized Workers (Conato).

The Minimum Wage Executive Order governing Panama provides for 53 minimum wages, 73 economic activities; (36 with national salary); 20 occupations (19 with national salary).

Currently the country has 81 districts and they are considered 2 regions: Region 1 consists of 40 districts and in Region 2 the rest of the districts, details Mitradel.