Thursday, December 1, 2022

Salary increase, the next challenge for Dominican companies in 2023

Inflation has considerably reduced the purchasing power of the salaries of formal workers, generating pressure on employers to respond to a reality: workers need a raise to face the new expenses.

During his speech within the framework of the II Money Economic Forum, the economist and director of EcoMod, Magín Díaz, explained that the Dominican Republic is, historically, a low-wage country despite the sustained economic growth it presents compared to other Latin American nations and Caribbean.

He understands that companies should assess how and to what extent they can increase what their employees earn, in accordance with their reality.

On July 14, 2021, the National Wage Committee (CNS) of the Ministry of Labor agreed, together with union sectors, workers and government representatives, to agree on a 24% increase for formal workers in the private sector, accompanied by a business reclassification.

According to the agreement, announced at the headquarters of the Ministry of Labor, large companies (with more than 150 workers and gross sales of more than RD$202 million per year) would have a minimum wage of RD$21,000 per month, 19.3% more when compared to with the RD$17,610 scheduled until then, for a net readjustment of RD$3,390.

For their part, medium-sized companies began to have a minimum wage of RD$19,250 per month, for an increase of 59% (RD$18,500), for a net increase of RD$750. In this group, companies that have an average of 51 to 150 employees and sales that exceed RD$54 million per year are classified.

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