Venezuela: The Establishment Of The National Minimum Wage

Content And Scope Of Presidential Decree No. 1.368 Of July 12, 2001 (Official Gazette Of The Republic No. 37.239, Dated 7-13-2001) Regarding The Establishment Of The National Minimum Wage

1. The discussed Decree No. 1.368, dated July 12, 2001, published in Official Gazette of the Republic (G.O.) No. 37.239 of July 13, issued by the President of the Republic in Council of Ministers in exercise of the powers vested in him by Article 236.1 of the Constitution of the Bolivarian Republic of Venezuela, Article 138 (authority to decree salary raises) and Article 172 (authority to establish minimum wages) of the Organic Labor Law (OLL), established the set of minimum wages that would govern within the reserved realm (Articles 1 to 5).

2. In this sense, in general terms, differentiated minimum wages were established as specified under Article 170 of the OLL and Article 88 of its Regulations (OLL Regulations), providing for five (5) different categories: urban and rural workers, workers of small companies, apprentices and janitors.

3. Minimum wage for urban workers (Article 1) was set at Bs. 158,400 per month, i.e., Bs. 5,280 per day (a 10% increase from the minimum monthly wage set for the year 2000, i.e., Bs. 144,000). The referred minimum wage allows an exception (Article 2) for workers at companies employing less than twenty (20) workers.

4. Minimum wage for workers at companies employee less than 20 workers (Article 2) was set at Bs. 145,200, i.e., Bs. 4,840 per day (a 10% increase from the minimum wage set for the year 2000, i.e., Bs. 132,000 per month).

5. Minimum wage for rural workers (Article 3), i.e., for those working at agricultural or cattle farms, in activities that can solely be performed in the rural environment (Article 315 of the OLL), was set at Bs. 142,560 per month, i.e., Bs. 4,752 per day (a 10% increase from the minimum wage set for the year 2000 of Bs. 129,600 per month).

6. Minimum wage for apprentices – governed by the system set out in Title V, Chapter I of the OLL – was set (Article 4) at Bs. 118,800 per month, i.e., Bs. 3,960 per day (a 10% increase from the minimum wage set for the year 2000 of Bs. 108,000 per month). The applicability of this differentiated minimum wage shall depend on whether employers actually provide training for such workers (if no training is provided, the employer must pay the general minimum wage established in Article 1 of the Decree in comment)

7. Minimum wage for janitors in residential buildings subject to the system of horizontal property (Article 5), was set at Bs. 158,400 per month, i.e., Bs. 5,280 per day (a 10% increase from the minimum wage set for the year 2000 of Bs. 144,000 per month). However, contrary to earlier Decrees establishing minimum wages, it does not provide for including in the minimum wage the "estimated value that would correspond in rentals" for the living quarters granted to the janitor. Therefore, janitors shall earn, at least, the referred minimum wage in money (notwithstanding the wage component represented by the right to living quarters).

8. Proportional payment of a minimum wage is allowed (Article 7) based on the duration of the work shift of the worker, according to Article 194 of the OLL. In this sense, if a worker – in the urban sector – renders services during four (4) hours per day, minimum wage would be –in such circumstances– Bs. 79,200 per month.

9. Domestic workers (Article 274 of the OLL) were expressly excluded from the scope of personal applicability of Decree No. 1.368, as evidenced by the provisions of its Article 8.

10. The minimum wages established under Decree 1368 may solely be paid in cash, i.e., no payments in kind are permitted (Article 6).

10. The Decree entered into force on July 13, 2001, i.e., from its publication in the Official Gazette (Article 10). Nonetheless, by order of Article 22 of the Organic Labor Law and Article 11 of the Decree itself, it must be submitted to Congress in order to be suspended or ratified.