He the living wage is set at $465.39 in 2022. according to Ministerial Agreement MDT-2023-035, issued on March 1 of this year. The living wage is separate from the single basic wage, which for 2022 was 425 USD. According to the Production Code, the living minimum is the one that covers “the minimum basic needs of the worker, as well as his family, and corresponds to the cost of the basic family basket divided by the number of recipients in the household.” The Ministry of Labor is responsible for its calculation.

According to the norm, it must be paid by employers in the private sector, legal entities or natural persons obliged to keep business books that made a profit in the previous year (2022). Those who receive the minimum wage are workers and former employees of the company. Before distributing the profits, these employers must check whether their workers have received a salary that suits them. Therefore, the limit for the payment of the said salary is the following March 31.

If there is a worker or former worker who has not received it, then economic compensation is given which is derived from the profit and, after discounting that value, that profit can be distributed normally. If there is no profit, then even the minimum living wage cannot be paid.

However, Vanessa Velásquez, an expert in labor law and CEO of Laborlex, explains that it is very unusual for a worker in a formal company – who earns a basic income – not to receive a living wage. Therefore, this living wage is rarely applied.

There are two reasons for this: the first is that the gap between the base wage ($425 by 2022) and the minimum wage, which is $465.39, is closing. For example, in 2022 the difference would be $40.39. However, the worker’s income is not calculated based on the basic salary, but taking into account all the worker’s income.

But What components are taken into account to determine whether a worker is entitled to living wage compensation or not?

All of that annual value is divided by 12 and then compared to the minimum wage. If there is a difference in favor of the worker, compensation goes.

Xavier Sisa, a corporate lawyer, also explains that due to the constant increase in the minimum wage, those earning the basic wage already exceed the living wage, which is calculated by adding other items. For example, if a person earns $425 and the thirteenth and fourteenth wages are added to that, an amount of $495.83 would be received annually, that is, it exceeds the living wage.

Consider it Therefore, the concept of living minimum is losing its validity. It further explains that if someone only works part-time, they must earn a proportionate living wage. And only if someone worked 40 hours, but earned less than the basic salary, then he could be a user of this topic. However, most companies that are formal respect the basic payment.

The ministry says so the employer will fill in the required information when applying for profit participation for 2022 on the website of the Ministry of Labour. with an online salary system, which will identify workers and former workers, who must be paid financial compensation for not reaching a decent wage.

The Ministry of Labor through the Directorate for Control and Inspection will control compliance with this Ministerial Agreement. If it is not respected, it will be sanctioned.