Labor Commission of the Senate approves changes to accrued salaries

The Commission of Labor and Social Welfare of the Senate of the Republic approved the decision on the initiative that modifies the payment of accrued salaries presented by Napoleón Gómez Urrutia, of the Morena party. This initiative considers extending the period of time and the percentage to be paid by the employer in the event of losing labor proceedings.

According to the decision approved by the Senators, which will have to be voted on in a Plenary Session of the Senate and then be passed to the House of Representatives, it reforms Article 48 of the Federal Labor Law, doubling the amount to be paid. Now, 100% of the accrued salaries for the first two years will be paid and, starting on the third year, an interest of 4% will be paid on the amount of 15 months of capitalizable salary at the time of payment. “This will double the current amount of accrued salaries, which will necessarily be an incentive to encourage the lengthening of proceedings, making them last longer than they do now”, stated Oscar de la Vega, directing partner at De la Vega & Martínez Rojas.

He added that this will greatly affect the main employers in the Country, who are micro, small and medium businesses, “having to face labor proceedings with an average duration of 2 to 3 years or more, due to the saturation and lack of resources of the Conciliation and Arbitration Board, putting the patrimony of these employers at risk and, in many occasions, that of families who start small businesses, as the accumulation of accrued salaries has no limit or ceiling in terms of time”, he added.

The Reform of 2012 made the Federal Labor Law more flexible, establishing a ceiling of 12 months of payment of 100 % of the salary and, from the second year forward, a monthly interest of 2 % on the amount of 15 months of capitalizable salary at the moment of payment which, in simple terms, equals a third of the worker’s salary, with no limit in regard to the number of years that the proceedings last.

In this sense, he said that “unfortunately, this type of measures mainly affects the micro, small and medium businesses of the Country and this will further increase the already very high percentage of informality, in which workers have no benefits and are excluded from social security”.

The specialist on labor matters said that there are studies by the World Bank in which it has been proven that flexible labor legislations encourage the creation of formal employment and rigid labor legislations create informality, “unfortunately, the Commission on Labor and Social Welfare of the Senate of the Republic is taking the latter approach”.

Note published in El Economista, Companies Section by María del Pilar Martínez