National Executive decrees another salary and bonus increase for 2017

In Official Gazette No. 41,231 of September 7, 2017, Decree Nos. 3,068 and 3,069 were published, which establishes a 40% increase in the monthly minimum national mandatory wage, as well as the adjustment of the calculation basis for payment of the Cestaticket Socialista, respectively. Below are the most relevant aspects contained in both standards

On the increase of the national minimum wage and the payment of an additional special bonus for retirees and pensioners

By means of Decree 3.068, the National Executive increased by 40% the mandatory monthly minimum wage, equivalent to Bs. 39,012.4, throughout the territory of the Bolivarian Republic of Venezuela, for workers who provide services in the public and private, increasing the monthly amount of Bs. 97,531 to the amount of Bs. 136,543.4 as of September 1, 2017.

Additionally, the amount of Bs. 136,543.4 was set as the minimum amount of pensions of retirees and pensioners of the Public Administration and the amount of pensions paid by the Venezuelan Institute of Social Security (I.V.S.S.); same amount established for the monthly national minimum wage. However, in addition, the payment of a special voucher to the pensioners of I.V.S.S., equivalent to 30% of the aforementioned amount, ie Bs. 40,963, totaling Bs. 177,506 of monthly income, was established.

Adjustment of the calculation base of the Socialist Cestaticket

Decree 3,069 established the adjustment of the calculation basis for the payment of the Socialist Cestaticket to workers who provide services in the public and private sectors, so that from 17 U.T. daily units the calculation base was increased to 21 U.T. per day, at the rate of 30 days per month, being able to receive up to a maximum of the equivalent of 630 U.T. monthly. This adjustment implies an increase in the monthly benefit of Bs. 153,000.00 to Bs. 189,000.00. and its validity is applicable from September 1.

Currently the U.T. has a value of Bs. 300.00; that is to say, that for day worked the food ticket has a value of Bs. 5,100.00. Thus, the formula to calculate the Cestaticket Socialist would be the following one:

U.T. Bs. 300,00 x 21 = Bs. 6,300.00 (daily) x 30 days = Bs. 189,000.00

All working entities in the public and private sectors must adjust this food benefit as established and is mandatory for employers.

In addition, the decree establishes that public and private sector labor entities must grant this benefit in cash or by credit to each employee’s payroll account, expressing on a separate payment receipt the amount resulting from the days worked, and indicating in the same as this payment has no salary incidence and, consequently, deductions can not be made on it, unless the worker authorizes it with the purpose of acquiring goods and services within the framework of social missions to satisfy their needs.

With this new increase in the minimum wage, as well as the adjustment in the basis of calculation of the Socialist Cestaticket, the minimum monthly income of workers is set at Bs. 325,544, of which Bs. 136,543.4 correspond to the national minimum wage since September 1, 2017, and Bs. 189,000.00 correspond to the benefit of Cestaticket Socialista.

Likewise, as has occurred with each increase in the mandatory minimum wage that has been decreed in the country, as a result of this measure there will be an increase in the labor cost for employers with respect to those workers who are entitled to receive the social benefit relative to the Initial Education or Nursery, ie those with children under 6 years of age, and will also be affected the amounts of social contributions that base their calculation on minimum wages, such as the Employment and Social Security Scheme Required. All this added, of course, to the economic impact that this measure will imply in the calculation of labor concepts such as holidays, vacation vouchers, utilities and social benefits.