Costa Rica Adopts New Methodology For Adjustments To Wage Increase

Author:Mr Marco Esteban Arias
Profession:Littler Mendelson

On October 31, 2016, Costa Rica's National Wages Council ("Consejo Nacional de Salarios") approved a proposal to change the formula and timeframe of wage increases for employees in the private sector. With the new methodology, minimum wages in the private sector will now increase only once per year, beginning on January 1, 2017.

Traditionally, the National Wages Council met every six months and decided upon minimum wage increases for the public and private sectors. With the approved changes, minimum wages in the private sector will increase once annually, while wages in the public sector will continue to increase on January and July of each year. The new methodology includes a new formula for calculating increases, based on both the increase in the cost of living and the growth of the per capita Gross Domestic Product.

Private sector employers must increase wages only for...

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