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 circumstances by cash), and the value of the benefit may not be less than 0.25 tax units. It is not yet clear if the minimum amount remains the same or if it will be increased as well.
The food benefit is not deemed part of the employee's salary. This benefit must be granted during vacations and leaves of absences due to medical reasons.
Impact of the Salary Increase on Other Benefits
For those workers earning minimum wages the increase will impact other benefits such as vacations, vacation bonus, profit sharing, and guarantee of seniority which are calculated over the worker´s monthly salary. In addition, it also implies an impact in the caps of the salary basis for contributions to the Social Security and the value of the day care benefit (40% of minimum wage).