Venezuela Minimum Wage Set To Increase On December 1, 2014

On November 4, 2014, Venezuelan President Nicolas Maduro announced an increase of 15% of the minimum wage effective December 1, 2014. This announcement has not yet been published in the Official Gazette. The increase raises the minimum wage from 4,251.40 to 4,889.11 Bolivars (VEF) per month (equivalent to USD 776.03 at the official exchange rate of VEF 6.30 per USD 1).

This is the third minimum wage increase in 2014 in Venezuela, the first increase being a 10% boost in January and 30% in May. The measure aims to protect workers' salaries from the high inflation level running at nearly 60% this year. However, employers are only obliged to increase salaries of those workers earning minimum wages, unless otherwise agreed through a collective bargain agreement.

Impact of the Salary Increase on the Food Benefit

Additionally, according to the President's announcement, the amount for food benefit will increase, as well, from an equivalent of a maximum of 0.50 tax units per day of work, up to 0.75 tax units (a maximum of VEF 95.25 per day). However, the increase is not yet official, since it has not yet been published in the Official Gazette.

According to the Feeding Law for Employees, employers must provide healthy meals during the workday to those employees who earn salaries up to the equivalent of three minimum wages. This benefit may be granted through coupons or electronic debit cards (under exceptional...