New National Minimum Wage

As of January 15, 2020, Executive Decree No. 424 of December 31, 2019, which sets the new minimum wage rates throughout the territory of the Republic of Panama, becomes effective. By law, an analysis of work activities, cost of living, economic and social policies, among other indicators to set the minimum wage, must be carried out every two years.

In order to calculate it, the country is divided into two regions based on the commercial, labor and population activity of the area. Region 1, whose salaries are higher, includes urban areas, main cities of most provinces, tourist and high agricultural production areas. Region 2 includes the areas that are not mentioned in the previous descriptions, with less commercial activity and population.

Salary increases are based on the economic activity carried out by the employer. Some of the main activities are Agrobusiness, Manufacturing Industries, Construction, Retail and Wholesale, Hotels, Transportation, Professional, Scientific, and Technical Activities.

The minimum wage for domestic work has been set at US $ 300.00 per month for Region 1, which includes Panama City, and at US $ 275.00 per month for Region 2.

It is important to note that the salary increase will only apply to those salaries that do not exceed the minimum established by law, which mean that it is not a requirement to increase the wages of those workers whose salaries exceed the minimum wage.