Minimum Wage Fixing Convention, 1970 (No. 131) - Nicaragua (Ratification: 1976)

Replies received to the issues raised in a direct request which do not give rise to further comments (CEACR) - adopted 2019, published 109th ILC session (2021)

The Committee notes the information provided by the Government, which answers the points raised in its previous direct request and has no further matters to raise in this regard.

Direct Request (CEACR) - adopted 2012, published 102nd ILC session (2013)

Articles 1 and 3 of the Convention. System of minimum wages and the workers’ basic needs. The Committee notes the adoption of Minimum Wage Act No. 625 of 31 May 2007 which repeals Minimum Wage Act No. 129 of 24 May 1991.

The new Minimum Wage Act provides that the minimum wage is fixed by reference to the value of a “basic family basket” (canasta básica), which is calculated and adjusted by the Ministry of Health, the Social Security Institute of Nicaragua (INSS) and the National Institute of Information and Development (INIDE). The Act also provides that in determining minimum wage rates every six months, the National Minimum Wage Commission takes into account the general wages level, the cost of living and its variations, social security benefits, the wage levels of other social groups and the highest wages paid by the State, as well as economic factors, such as productivity and the objective of achieving high employment levels.

The Committee notes that by Ministerial Agreement JCHG 04-08-12 of 31 August 2012, the minimum wage was raised in ten key economic sectors and currently ranges from 2,273 Nicaraguan cordobas (NIO) (approximately US$95) in agriculture to NIO5,161 (approximately US$216) per month in finance and the construction industry. The Government indicates that as of January 2012, minimum wage rates represented between 34 and 66 per cent of the value of the basic family basket which stood at NIO10,120 (approximately $424) a month.

The Committee trusts that the Government will pursue its efforts, in consultation with the social partners, to ensure that minimum wages maintain an acceptable purchasing power in relation to a basic basket of essential consumer goods, so as to provide a decent standard of living to low-paid workers.

Article 4. Consultation and participation of employers’ and workers’ organizations. In reply to the Committee’s previous comments, the Government indicates that, since 2007 the tripartite National Minimum Wage Commission operates according to the law and meets every six months to review and readjust minimum wage levels. It also indicates that the National Minimum Wage Commission includes in its composition one representative from each of the trade union confederations and one representative from each of the employers’ associations represented nationally. The Government further indicates that another consultative body, the Free Trade Zone Tripartite Labour Commission, has agreed on a 9 per cent minimum wage increase for 2012 and a 10 per cent increase for 2013. Finally, the Government refers to recent minimum wage adjustments through tripartite agreements in the construction sector and the coffee industry. Reaffirming the importance of engaging into genuine and effective consultations with the social partners at all the stages of the minimum wage fixing process, the Committee requests the Government to continue to provide information on the operation of the different tripartite consultative bodies involved in the regular review of minimum wage rates.

Observation (CEACR) - adopted 2008, published 98th ILC session (2009)

Articles 1 and 3 of the Convention. System of minimum wages and the workers’ basic needs. The Committee notes the detailed information provided by the Government in reply to the comments made by the Trade Union Workers’ Confederation–“José Benito Escobar” (CST–JBE), the National Union of Employees and the Sandinista Workers’ Confederation with regard to the implementation of the Minimum Wage Act No. 129 of 1991 and the falling purchasing power of minimum pay rates. The Government explains the structure and function of the system of sectoral minimum wages based on the concept of a “basic family basket” consisting of 53 consumer goods (food, household goods and clothing), which was first established in 1988, and is now reflected in section 7 of the Minimum Wage Act. According to the statistical information provided by the Government, minimum monthly wages for key economic sectors were last revised in June 2007 and range from 1,025 cordobas (NIO) (approximately US$56) in agriculture to NIO2,381 (approximately US$130) in finance and the construction industry, whereas the monthly needs of an urban family for a basic basket of goods were estimated in April 2007 at NIO3,569 (approximately US$190). According to the same figures, current minimum wage rates cover between 28 and 66 per cent of the cost of the “basic family basket”. Recalling section 2 of the Minimum Wage Act which defines the minimum wage as the regular remuneration that satisfies the worker’s basic material, moral and cultural needs, and also recalling that the fundamental purpose of minimum wage fixing is to overcome poverty and to ensure a decent standard of living for low-paid workers, the Committee hopes that the Government will take the necessary measures to fully apply the national minimum wage legislation and to ensure that minimum wages maintain an acceptable purchasing power in relation to a basic basket of essential consumer goods.

Article 4. Consultation and participation of employers’ and workers’ organizations. The Committee recalls that in their joint communication, the National Union of Employees and the Sandinista Workers’ Confederation denounced the absence of any real and effective participation of workers’ representatives in the consultation process while the CST–JBE pointed out that contrary to the clear requirement of the national legislation, minimum wage levels were not readjusted once every six months. In its reply, the Government merely indicates that in the last ten years minimum wages had been reviewed annually without providing any further particulars on the institutional and practical arrangements guaranteeing the genuine participation of the social partners in the operation of the minimum wage fixing machinery. Recalling that under section 4 of the Minimum Wage Act, minimum wages have to be adjusted at least once every six months, taking into account the special characteristics of each professional category, region and economic sector, the Committee hopes that the Government will take appropriate action so that there is no inconsistency in national law and practice as regards the periodicity of the revision of minimum wage rates. In addition, the Committee asks the Government to provide additional explanations on the function, composition and rules of procedure of the National Minimum Wage Commission in the light of the observations made by the workers’ organizations mentioned above.

Observation (CEACR) - adopted 2004, published 93rd ILC session (2005)

The Committee has been in receipt of two communications of workers’ organizations regarding the application of the Convention. The first, dated 23 April 2004, was made by the Trade Union Workers Confederation "José Benito Escobar" (CST), while the second, dated 12 June 2004, was made jointly by the National Union of Public Employees and the Sandinista Workers’ Confederation. The above communications were transmitted to the Government on 19 and 20 August 2004 but no reply has so far been received.

According to the CST, in the last twelve and a half years the minimum wage has been revised six times although the Minimum Wage Act No. 129 of 1991 provides that minimum wage rates should be readjusted once every six months. In addition, the minimum wage rates currently in force have lost most of their purchasing power and are therefore completely inadequate to cover the basic needs of workers and their families. Based on an estimated cost of the basic basket of essential consumer goods of 5,567 cordobas in December 2003, the CST indicates that the current minimum wage of 988.6 cordobas per month represents only 17.7 per cent of that basic basket of goods (as compared to 47 per cent in May 2002 and 45.7 per cent in May 2001). Furthermore, the CST indicates that due to the falling exchange rate of the national currency against the US dollar (15.7:1 in March 2004 as contrasted to 5:1 in August 1991), the monthly minimum wage expressed in dollars has decreased in the last five years (US$62.82 in March 2004 as contrasted to US$66.42 in August 1999, US$66.84 in May 2001 and US$68.67 in May 2002) and only moderately increased since the introduction of the national minimum wage some 13 years ago (US$62.82 in March 2004 as compared to US$46.38 in August 1991).

For their part, the National Union of Public Employees and the Sandinista Workers’ Confederation denounce the consultation process initiated by the Government as being conducted in complete disregard of the criteria referred to in Article 3(a) of the Convention and without any real and effective participation of workers’ representatives as required under Article 4, paragraph 2, of the Convention. In their view, this is not merely a problem of lack of consensus between the Government and the workers in discussing minimum wages but has to do with an institutional practice which in essence deforms and violates the principles of minimum wage-fixing set out in the Convention. Moreover, the two organizations consider the latest increase of the minimum wage rate by 10 per cent for the public sector and by 8.83 per cent for all other economic sectors to be abusive and derisory.

The Committee hopes that the Government will provide full particulars on the matters raised by the workers’ organizations to enable the Committee to better evaluate the consistency of the national law and practice with the requirements of the Convention.

Direct Request (CEACR) - adopted 2003, published 92nd ILC session (2004)

The Committee notes the Government’s report and the attached documentation.

Article 1, paragraph 1, and Article 4, paragraph 1, of the Convention. The Committee notes the statistics provided by the Government on the evolution of minimum wage rates by branch of activity for the period 1991-2002. The Committee notes in particular that monthly, daily and hourly minimum wage rates were last adjusted in April 2002 by ministerial resolution, with the agreement of the National Minimum Wage Commission. In this respect, the Committee notes that, by virtue of section 4 of the Minimum Wage Act, No. 129 of 1991, minimum wages are to be periodically adjusted, at least once every six months, taking into account the specific characteristics of each type of work, particular regional conditions and the economic sector. The Committee requests the Government to indicate, in its next report, whether the frequency of revision of minimum wage rates provided for in the above Act is given effect in practice and, if not, to indicate the measures adopted or envisaged to correct this situation.

Article 5 and Part V of the report form. The Committee notes the information provided by the Government on the various categories of workers covered by minimum wage rates, and the number of violations of minimum wage provisions reported in 2001 by the inspection services. The Committee hopes that the Government will continue to provide information on the application of the Convention, in both law and practice, particularly with regard to the methods of enforcement and the sanctions imposed by virtue of section 9 of Act No. 129 of 1991 to ensure the effective application of minimum wage provisions.

Direct Request (CEACR) - adopted 1998, published 87th ILC session (1999)

The Committee notes the detailed information provided in the Government's report. It requests the Government, in accordance with Article 2, paragraph 1, of the Convention, in conjunction with Article 5 and point V of the report form, to supply general information on the manner in which the Convention is applied in practice, including: (i) the adjustment of the minimum wage rates in force; (ii) available statistical data on the number and different categories of workers covered by minimum wage regulations; and (iii) the results of inspections (cases of violations reported, penalties imposed, etc.).