Starting this Saturday, the entry into force of Decree 138, which refers to the organization of the wage system in Cuba’s state business sector, establishes that the salary set for a worker cannot be lower than the national minimum wage, nor lower than the basic salary the worker received the previous year, provided they perform the same activity.
Although since 2021 the country had already introduced flexibility in organizational mechanisms of the wage system in this sector, the regulation now made official represents a more significant step, according to a press conference led by Guillermo Sarmiento Cabañas, Director of Work Organization at the Ministry of Labor and Social Security.
The Decree transfers to the enterprise the authority to approve the salaries of all its workers, freeing it from the obligation to adhere solely to the single wage scale and the job classifiers of the Ministry.
The main objective of the regulation is to stimulate increased productivity, profitability, and business efficiency, and therefore, it is conditioned on a higher contribution to the state budget compared to the previous year.
Approval of the Decree directly impacts workers’ income, based essentially on human resource management. As Sarmiento explained, “now the entity must technically design its wage system, applying scientific methods and innovation.”
Of particular significance is the fact that, for approval in companies that meet the established requirements, salaries will be set according to the entity’s results. The planning and execution of the wage fund will only be conditioned on not deteriorating the contribution from the performance of state investment or the payment of dividends to shareholders.
The company director is the highest authority responsible for its approval, for which no prior external evaluation is required. However, common agreement with the corresponding labor union, essential analysis in the Board of Directors and the workers’ assembly, as well as subsequent inclusion in the Collective Labor Agreement, are mandatory.
The Decree also generalizes the application of performance-based pay systems to all company workers and places in the hands of the top head of the OSDE, OACE, or relevant body the authorization of exceptions when the entity does not meet some required condition.
Additionally, it provides differentiated treatment for certain entities, including high-tech companies, application and IT service firms with management models aimed at strengthening them, and other newly created enterprises.
The implementation of Decree 138 could cover around 1,172,000 workers in state-owned enterprises, subsidiaries, business groups, unions, wholly Cuban-owned commercial companies, as well as budgeted units with special treatment that are fully financed.
