The twice yearly battle over the minimum wage has begun.
The Consejo Nacional de Salarios eventually will fix the percentage of the wage increase that will take effect July 1.
Union representatives have asked for a 6.82 percent increase. An employer group proposed 2.6413 percent Wednesday.
Both proposals have a basis in the economy. The Asociación Nacional de Empleados Públicos y Privados wants an increase that not only reflects the inflation that has taken place this year but also in anticipation of inflation during the last half of the year.
The employers group, the Unión Costarricense de Cámaras y Asociaciones del Sector Empresarial Privado, said the increase should reflect the inflation that has taken place. The Instituto Nacional de Estadística y Censos estimates the inflation from January to May to be 2.209 percent, noted the employers group. The estimated inflation for May is less than 1 percent at .6442.
The salary council most likely will pick a figure between the two proposals.
The decision has an impact on expats who hire employees, even if the worker is just a housekeeper. Most employees work at the minimum wage, which is different for every job classification. A typical wage now might be 228,000 colons a month or about $455.
However, minimum wages can go up to 500,000 a month or about $1,000, depending on the job classification. Some minimum wages are hourly.
Not only do employers pay the increase, but an additional percentage of the wage hike goes to the employees when the obligatory Christmas bonus is figured.
Plus the employer, if he or she is following the law, must pay an additional amount to the Caja Costarricense de Seguro Social for social security fees. There also is a small increase in the workmen’s compensation premium because the amount is based on the total salaries paid.
Tough economic times have caused many employers to reduce their workforce to save on salaries and social security charges.
If the Consejo de Salarios does not reach a decision by July 1, employers will have to reimburse workers based on the new figures whenever the amounts are set.