Chainsaw the weakest: the national government established the new minimum wage by decree

Thenational government decided to establish the Minimum Living Wage ( SMVM ) and unemployment benefit amounts by decree after the Wage Council failed to reach an agreement among union representatives. Starting April 1, 2025, the minimum wage was set at $302,600 per month for full-time workers and $1,513 per hour for those paid by the day. In May, the amounts will increase to $308,200 and $1,541, respectively. Subsequently, further monthly increases will be established, reaching an SMVM of $322,000 and $1,610 per hour in August.

The measure was published this Friday in the Official Gazette through Resolution 5/2025. The Executive Branch defined the new rates that will apply to all workers covered by the Employment Contract System, the Agricultural Labor System, the National Public Administration, and state entities. The increases will be phased in from April to August of this year.

The decision to move forward by decree was made after the failure of negotiations between employers and unions, amid inflation and a loss of purchasing power. The government stated that it was necessary to "guarantee a salary reference" for collective bargaining negotiations and social programs that use the minimum wage as a benchmark.

In addition to the minimum wage, the resolution establishes that unemployment benefits will continue to be calculated at 75% of the highest net salary of the last six months worked before dismissal. However, it clarifies that the benefit may not be less than 50% or more than 100% of the minimum wage in effect each month.

The Salary Council, which brings together representatives from the government, unions, and the business sector, has been unable to agree on an increase since February. Unions demanded an increase of up to 700,000 pesos to bring the wages closer to the cost of living, while the business sector expressed financial difficulties in facing further increases.