Cuba: Wage reform comes into force in December

Cuba: Wage reform comes into force in December
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13 December 2020
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The salary reform will come onto force in the month of December, one month before the zero day of the monetary order, so that the workers can face the price increase, hence the payment of an advance of one thousand pesos to each salaried worker starting on the 23rd.

Marta Elena Feitó Cabrera, Minister of Labor and Social Security, explained that later they will be paid their increased salary minus the thousand pesos.

She specified that all salaried workers - some 3.3 million in Cuba - are entitled to that amount, including those on maternity leave, maternity subsidies and interruptions who were receiving the wage guarantee.
The minister pointed out that those on unpaid leave and the interrupted workers who unjustifiably did not accept the relocation are excluded.

She explained that to undertake the payment of this advance, the entities must have their payrolls updated and issued and request the advance from the bank branches.

Minister Feitó Cabrera also said that there are six principles for changes in income: elimination of undue subsidies and gratuities - aimed at subsidizing people and not products -, salary as the main source to finance the consumption of workers and their families.

Also, eliminate wage distortions to encourage employment and promotion to management positions; set the minimum wage, pensions and social assistance benefits taking as a reference the cost of the basket of goods and services of reference; concepts of gross and net wages; and growth of wages, pensions and benefits consistent with macroeconomic balances.

She ratified that 2,100 pesos per month was established as the minimum salary in the Island, as a result of multiplying the cost of the reference basket of goods and services by the coefficient 1.3 and by 1.05, the latter by the special contribution of the workers to social security.

The salary scale is 32 groups, with a ratio between the most complex and the least complex salary of 4.5 times; so that the most complex salary is 9,510 pesos.

There is a differentiation between professionals, mid-level and high-level technicians that previously was not designed in a more staggered manner and that discouraged technical-professional workers a little in relation to employment, he indicated.

In this sense, she said that, in addition, a differentiation is perceived according to the level of qualification between mid-level technician, higher level technician and higher level graduate in terms of the stipend, something that is novel.

Regarding the salary waiver, a faculty of the institutions' administrators, she said that mid-level technicians can occupy positions with higher level requirements if they are suitable to carry out their work efficiently.

She highlighted that the following are eliminated and excluded from the salary scale: additional payments and stimulation systems and other payments in cuc and cup; while maintaining and increasing the amounts of additional payments for special working conditions, category of Master and Doctor, coefficient of social economic interest, for teaching in Public Health and for professionals who are internationally certified.

In the business system, payment systems for results linked to limit and directive indicators are discarded; and the salary will have a structure that will be the scale salary and another mobile part associated to the results (piece-rate payment, distribution of profits for the individual contribution).

The Minister called for the responsibility of the directors to distribute profits, now without limits, and emphasized the need to make regulations for their distribution.

She emphasized that the system of payment by performance to the constructors in the Special Zone of Mariel Development and tourism works is maintained; and as to the foreign investment, she continued that the salary is fixed by agreement between the employer and the company with foreign capital (complexity, work conditions and additional requirements of the positions).

In addition, the negotiated salary cannot be less than that which corresponds to each position according to the salary scale.

Marino Murillo Jorge, member of the Political Bureau of the Central Committee of the Party and head of the Commission for the Implementation of the Guidelines, specified that the monetary order will be in January when the price increases occur, so perhaps some companies will "turn around" at a loss and recover in the coming months.

He said that student stipends on average are four times higher.

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