Work and Wages

This page was last updated on: 2021-11-19

Minimum Wage

Minimum wage is the minimum remuneration that can be established by the parties to the employment relation, capable to cover the normal material, moral and cultural needs of the worker and enable that person to fulfill his duties as head of the household. The periodic establishment (and revision) of minimum wage, in accordance with the law, is the minimum social right among others that form the basis of labour legislation. 

In accordance with the Labour Code, every worker has the right to earn a minimum wage that covers his/her material, moral and cultural needs. Other factors that are considered while determining minimum wage includes cost of living, economic development, levels of productivity, and the capacity of employers to pay different sectors.

The minimum wage is set by the National Wage Commission.  There is no national minimum wage, as it varies by sector. The Executive sets the minimum wage rate for private sector workers in an accord with the Ministry of Labour and Social Welfare, based on the report of the National Wage Commission. Report of the National Wage Commission is based on the recommendation of the Joint Minimum Wage Board (created for each region and economic zone) for their respective region or economic zone. The recommendations of National Wage Commission are shared with the Monetary Board of the Central Bank of Guatemala and Guatemalan Social Security Institute. The Boards are composed of equal number of representatives from worker and employer groups (two members each). Labour inspector (government representative) acts as a Chairman of the Board. A government agreement annually determines the minimum wage for agriculture, non-agriculture and export sectors. The Joint Minimum Wage Boards must take into account surveys on cost of living (done by Department of Statistics) and all other data relevant to its jurisdiction on price of housing, clothing, food consumed by workers and also about the facilities that employers provide workers with regard to accommodation, land for cultivation, firewood and other benefits that reduces their cost of living.

Different minimum wage rates are applicable to specific categories of workers (including trainees, domestic workers and piece-rate workers) and sectors (including agricultural sector, non-agricultural sector, export and textile sector). The minimum wage is determined on daily or hourly basis. In addition to the minimum wage, there is also provision for incentive bonus.

Minimum wage may also be set through collective bargaining however it cannot be less than the minimum wage fixed by authority.

Compliance with labour laws including minimum wages is ensured by the General Inspectorate of Labour. In case of violation of labour or social security provisions such as wages, there is a provision of fine between three to twelve times the monthly minimum wage for non-agricultural activities.  This fine is payable by the employer without prejudice to the right of workers to recover sums due to them for non-payment or less payment of wages. Employer and workers are suggested to resolve their disputes between themselves. A worker may file a case before the Court of Labour & Social Welfare.

Source: §102(f) of the Constitution of Guatemala, 1985; §103-115, 272(2), 283, and 374 of the Labour Code 2017; Acuerdo Gubernativo Numero 288-2016

Regular Pay

Salary or wage is the compensation that an employer must pay to an employee by virtue of complying with the employment agreement or relationship in effect between them. Save for the legal exceptions, any service rendered by a worker to his or her respective employer must be remunerated by the employer.

The payment of the salary in made on the basis of time unit (monthly, fortnightly, weekly, daily, or hourly), or work unit (by piece, task, lump price, or by work piece); or by participation in the profits, sales or collections the employer may make, regardless of the risk of the profit or loss the employer might have.

In accordance with the Labour Code, wages must be fully paid regularly in legal tender, at workplace (unless agreed otherwise), during working hours or immediately after working hours to the worker or any authorized person. Payment of wages in recreation outlets or pubs is prohibited except in case of employees who work in that kind of establishment.

 Employers and employees may set a deadline/wage payment interval however this period may not be longer than a fortnight (15 days) for manual workers and one (01) month for intellectual (knowledge workers) and domestic service workers. Employers must also keep a wage book for a record of payments made to the workers.

In kind payment is allowed but it may not exceed 30% of the total wage that a worker receives. The agricultural workers or their families may receive up to 30% of their wages in food or other similar allowances intended for their direct personal consumption. However, totally or partially paying an employee’s salary in merchandise or coupons is prohibited

Guatemala has ratified the ILO Convention 175 of ILO. Government Agreement No. 89-2019 was also published in 2019 to regulate part time work in Guatemala. The Regulation defines full time and part-time work. Part-time work in day time should not exceed 6 hours a day or 30 hours a week. For night workers, the daily and weekly limits are 5 hours and 25 hours respectively. In case work time exceeds from the agreed part time contract, worker should be paid premium wages as established by the Labor Code and overtime work should not be longer than 2 hours a day and 10 hours a week. Workers should be paid in hourly calculations and should not be paid less than hourly minimum wage. All part-time employment contracts must be drawn up in writing. A part-time worker has the preferential right to move to a full time employment whenever vacancies are open.

Source: §88 & 90-102 of the Labour Code 2017; § 102 (d) of the Constitution of Guatemala; §1,2, 8, 10 of Law No. 5477; Regulation on Convention 175 (Acuerdo Gubenativo 89-2019)

Regulations on Work and Wages

  • Código del trabajo, Decreto núm.1441 (modificado en 2001) / Labour Code, Decree No.1441 (amended in 2001)

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