New Minimum Wages Applicable in the Republic of Panama as of January 1, 2014
Through the recent enactment of Executive Decree No. 182 of 2013, the Government of Panama established the new minimum wages applicable to employees throughout national territory, starting January 1, 2014.
The new minimum wages established vary depending the type of economic activity, the region where the activity is carried out, the profession or occupation of the employee, as well as the size of the employer.
Principal aspects to consider with regards to the Decree are the following:
- The Districts of Taboga, San Carlos, Chepo, Guarare, Los Santos, Pedasí, Dolega, San Felix, Barú, Boqueron, Portobelo, Donoso, Santa Isabel, Santa María, Parita, Atalaya, Changuinola and Chiriquí Grande, were included in region 1.
- In order to determine the monthly minimum wage, the number of hours for which the employee was hired must be considered.
- If a company has diverse activities inherent to company’s business, Article 178 of Labor Code applies. This means that the employee will receive the higher minimum wage of the activities performed.
- There are minimum wages applicable to specific professions and occupations such as drivers of buses, health technicians, cameramen, and others.
- “Small businesses” are considered as those that perform activities of agriculture, livestock, service or retail sales, with 10 ore less employees. Manufacturing companies with 15 employees or less, as well as agribusinesses with 20 employees or less, are also considered as “small businesses”.
- The highest minimum wage apply to companies established in free trade zones and special economic zones (USD$3.00 per hour), and to employees that perform activities such as international cabin crew (USD$3.85).