New wages in enterprises with foreign investment

Cubans employed in enterprises with foreign capital participation will receive wages negotiated on bases more adapted to regional practice.

The wages of the Cuban personnel employed in joint or foreign ventures will be negotiated in CUC but will be taken to Cuban pesos after being increased twofold, according to the coefficient established by Resolution 42 of the Labour and Social Security Ministry.

The Cuban government put in place this month a new payment system for workers hired by foreign enterprises. The measure, implemented in a year of transformations in the policy to attract foreign capital, seeks a more encouraging retribution for the personnel working in companies with a great impact in the country’s economic results.

Protected by a trio of legal regulations of the Labour and Social Security Ministry (MTSS), the Finance and Prices Ministry (MFP) and the Economy and Planning Ministry (MEP), published on December 16 in the No. 53 Extraordinary Official Gazette, the step opens the doors to a renegotiation of wages for employees in joint or associated ventures with capital from other countries.

According to Resolution 42 of the MTSS, the payment will now be agreed by Cuba’s employment enterprise and the businesses with foreign capital participation taking into account the wages paid for posts of similar complexity in entities of the same sector of the geographical area, as well as case by case additional payments.

This regulation introduces a change in relation to the practice in force of conceiving the payment in a centralised way based on wage scales approved by each country. These scales are now left only as reference.

Labour Deputy Minister Zamira Marín Triana said in a press conference that Resolution 42 will imply, as a norm, an increase in those workers’ incomes.

The employment entity and the foreign firm will negotiate the wage base in convertible pesos (CUC), but the payment to employees will be carried out in Cuban pesos (CUP), as stipulated by the Foreign Investment Law approved early this year. However, compared to the previous practice, which did the conversion in a lineal way, the wage negotiated in CUC will now be increased twofold when it is carried to pesos, according to the coefficient established by Resolution 42.

Despite the twofold increase, the new regulation embodies doubts. While a CUC is equal to a dollar and a CUP according to the official exchange rate – only applied in the business sphere -, in the network of Exchange Houses (CADECA), and by extension in the retail network to which the population has access, the rate is 1 CUC = 24 CUP.

Marín Triana announced that the joint ventures authorised to directly hire their labour force – the Telecommunications Company of Cuba (ETECSA) and the Havana Aqueduct – are also authorised to use that coefficient to calculate their wages.

According to the MTSS deputy minister, the new regulation, retroactively applied based on the wages corresponding to October, cannot imply affectations to the workers in any case. She said that the retribution they receive with the new regulations will never be below the one received or the mean wage of the country, which starting now will be considered the minimum for this area of the economy.

The government is implementing this measure in a year of wage increases for the healthcare personnel, key for social services and from the economic point of view. It also joins the legislations that establish a more flexible payment system in state-run enterprises.

Thus, the authorities are introducing this year wage benefit variants for the principal supports of their economy: the medical personnel is the one that contributes the most hard currency to the country, the state-run enterprises are the hard core of the Cuban economic activity and the foreign investments generally sustain the sectors with the greatest participation in exports and energy. (2014)

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