IMPACT – MEDIUM
What is the change? The Venezuelan government has increased the minimum wage from 3 million bolivars per month (about US$12) to 180 million bolivars – or 1,800 bolivares soberanos (about US$724) following the recent monetary conversion. The change was published in the official gazette following an announcement from President Nicolás Maduro last month.
What does the change mean? Venezuela requires work permit holders to have a salary of at least 3.4 to 4 times the legal minimum wage. Following the minimum wage increase of 5,900 percent, the Labor Bureau is accepting work permit salaries of 2,500 bolivares soberanos (about US$1,005), though this is likely to change and it is recommended that employers provide salaries of about 5,000 bolivares soberanos.
Background: Venezuela is suffering from massive inflation (approaching 1 million percent), and the announced increase to the minimum wage is the latest in a series of increases made by Maduro.
BAL Analysis: Employers should factor the updated work permit salary minimums into their budgets for foreign national employees. The change will affect companies employing foreign workers who make less than 5,000 bolivares soberanos per month. Employers are also reminded that foreign employee salaries may not constitute more than 20 percent of the total wages paid to a company’s employees. For questions regarding salary requirements, please contact your BAL representative.
This alert has been provided by the BAL Global Practice group. For additional information, please contact your BAL attorney.
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