Wednesday, January 19

Government establishes new minimum wage increase from 2022

The president of the Republic, Laurentino Cortizo Cohen, signed this December 31, 2021, the Executive Order by which the minimum wage is adjusted in those activities that have presented some level of recovery in 2021 compared to 2019.

According to the Decree, these new minimum wages will be applied in activities such as:

Agriculture, fishing and livestock – 1.5%

Social, financial and private health services activities 2.0%

Supply of electricity, gas, steam, in the area of ​​water supply, sewerage, waste management – 2-0%

Quarrying and construction sector – 1.0%

Banana workers, according to the agreement reached in 1019 between Sitraibana, Sitrapbi and the National Government – 13%

Domestic service – 5%

See Official Gazette here.

The Minister of Labor and Labor Development, Doris Zapata Acevedo, said that for the adjustment of the minimum wage, economic activities that have presented some level of recovery in 2021 compared to 2019 were considered.

For this, the behavior of the Gross domestic product (GDP) by economic activity; eliminating 2020, which was an atypical year, which cannot be taken as a reference to the economic situation that occurs worldwide.

The minimum hourly wage rates, according to the region, economic activity, occupation and size of the companies, in force throughout the national territory, are:

This new minimum wage adjustment will take effect on January 16, 2022.

For the purposes of applying the minimum wage rates, the regions into which the national territory has been divided are made up of the following districts:

Region 1:
Panama, Colón, San Miguelito, David, Santiago, Chitré, Aguadulce, Penonomé, Bocas del Toro, La Chorrera, Arraiján, Capira, Chame, Antón, Natá, Las Tablas, Bugaba, Boquete, Taboga, San Carlos, Chepo, Guararé, Los Santos, Pedasí, Dolega, San Félix, Barú, Boquerón, Portobelo, Donoso, Santa Isabel, Santa María, Parita, Pesé, Atalaya, Changuinola, Chiriquí Grande, Almirante, Tierras Altas, Omar Torrijos Herrera.

Region 2:
Rest of the country’s districts.

Domestic work

In the case of the minimum wage for domestic service, the increase occurs as follows:

For region 1 – $ 315 – showing an increase of $ 15.

For region 2 – $ 275 – showing an increase of $ 15.

How to calculate the minimum wage

As in Panama there is no equal minimum wage for all economic activities, then, each worker must calculate his minimum wage based on the economic activity he performs, the type of company (large or small) and the place where it is located.

To do this, you must take into account the new minimum wage rate (which will apply as of 2018) and multiply it by the number of weekly hours that corresponds to work. This number of hours varies according to each position and workplace (it can be 48, 45, 44 or 40 hours).

That result, then, must be multiplied by 4.33 (which represents the monthly average of weeks worked), in accordance with the recommendation of the Ministry of Labor and Labor Development (Mitradel).

“This decision meets criteria of social justice, adjusted to the reality of the country, considering the arguments presented by workers and employers, in order to preserve jobs and continue with the economic reactivation in the midst of the health crisis,” said Mitradel.

It is worth mentioning that Panama, unlike other countries, maintains the negotiation and validity of collective agreements and conventions that allow reaching solutions, commitments and benefits between the parties ”, they explained.

They also indicated that in this new decree, the agreement agreed on December 31, 2019 between the Union of Workers of the Banana Industry, Agriculture and Related Companies (SitraibanaI), the Industrial Union of Independent Banana Producers Workers (Sitrabi) and the National government; that establishes a 13% increase in the salary of banana workers.

Sassha Fuenmayor
[email protected]
Financial capital

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