Highlights Of The New Venezuelan Labor Law

A new Venezuelan Labor Law came into force on Monday May 7th, 2012 as a result of its publication in the Official Gazette No. 6.076 of the Bolivarian Republic of Venezuela. Following please find some of the main highlights of the new Labor Law:

1. Social benefits and indemnities

   1.1. The form of the monthly social benefit accrual changes under the new law. It must now be accrued on a quarterly basis instead of a monthly basis. Consequently, employers must now deposit 15 days of salary each quarter (instead of 5 days of salary per month) as a guarantee of the social benefits accrued by employees. This guarantee may be kept in a trust fund set up with a bank (the current trust funds may still be used), it may be kept in the employer's accounting records if so authorized by the employee or at the National Social Benefits Fund. Additionally, employees have the right to an escalating factor of 2 days of salary per year of service up to a maximum of 30 days of salary beginning after the first year of employment.

   1.2. The law also provides that at end of the employment the social benefits shall be computed based on 30 days of the employee's final salary per year of service beginning as of 1997. Employees shall receive the higher amount between the social benefits computed based on 30 days of salary and the quarterly accruals. If the quarterly accruals results higher the employees simply receive the amount accrued. If the 30 day per year computation results higher, employees still receive...