Work and Wages

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

Minimum Wage

Labour code defines minimum wage as the minimum remuneration that every worker is entitled for the services rendered in an ordinary working day, capable to ensure the satisfaction of the basic and vital needs of a family in the material, moral cultural order and in accordance with the cost of living in the different regions of the country. National Minimum Wage Commission periodically determines the minimum wage rate in accordance with the law. The minimum wage rate has been set differently for different sectors of economy. Minimum wage rate may also be set by collective agreement between the parties, provided that the wages cannot be lower than the minimum wage fixed by National Wage Commission. National Minimum Wage Commission, composed of representatives from worker, employer and government organizations (Ministry of Labour, Ministry of Industry & Commerce, Ministry of Finance, and Nicaraguan Central Bank), is charged with the responsibility of adjusting minimum wage rate. A resolution passed by the Commission has legal force once it is signed by representatives of workers, employers and Ministry of Labour.

Minimum wage should be sufficient enough to fulfill the basic needs of average workers and their families. Other factors that are considered while determining the minimum wage include cost of living (a representative basket of 53 food products, that fulfill the basic needs of workers and their families, is taken into account), level of wages in the country, social security benefits, economic development, productivity of the country and the inflation rate officially provided by the Nicaraguan Central Bank. The lowest minimum wage is in the agriculture sector while the highest is in the financial and insurance sector.

Minimum wage rates are adjusted every 6 months according to the particularities of each economic sector. The sectors include agriculture; fishing; mining and quarrying; manufacturing; micro and small cottage industry and national tourism; electricity, gas and water, trade, restaurants and hotels, transport, storage and communications; construction, financial institutions and insurance; social and personal community services; central and municipal Government.

This fixation is made per unit of time or per piece-rate, and may be calculated on hourly, daily, weekly, fortnightly or monthly basis.

Compliance with labour laws including minimum wage is ensured by the labour inspection system, i.e., the General Directorate of Labour Inspection. The Directorate may impose fines, depending on the seriousness of offence committed by the employer, ranging from five to twenty times the minimum wage rate for the slightest offences and forty to eighty times the minimum wage for most serious offences. In accordance with the minimum wage law, violation of minimum wage by employers will be punished by a minimum fine equivalent to 25% of the amount of payroll at the time of offence. Other than fine, workers also need to be paid their overdue wage by the employer.

Source: §82 of the Constitution of Nicaragua; §85 of the Labour Code 1996; §2, 4 & 8 of the Minimum Wages Act No. 625 of 2007; §57 of the Law No. 664 of 2008 on Labour Inspection 

Regular Pay

Labour Code defines wage as the remuneration which the employer shall pay to the employee by virtue of the employment contract or labour relation. Pay period can't exceed 07 days (one week) for workers and 15 days for employees.

Wages must be paid in legal tender (Cordoba) at the workplace, in compliance with the amount and date of payment as established in the labor agreement. Payment cycle varies for different types of workers, in the following manner:

  • Manual workers (agricultural workers, construction workers, textile workers, etc.) are paid on weekly basis;
  • Intellectual workers are paid fortnightly (every 15th day); and
  • Domestic workers are paid monthly.

Government employees are paid on monthly basis to avoid the complexity in processing the payroll. In kind allowances or the compensation with goods or other means of payment are not permitted. However in some cases, such as for domestic workers or agricultural workers, in kind-allowances may be accepted as a part of the remuneration.

In the event of delayed payment of wages for reasons attributable to the employer, the employee may receive for each of the two weeks subsequent to the date of payment, a tenth of what was due per week until the actual pay day.

Source: §86, 146 of the Labour Code 1996

Regulations on Work and Wages

  • Código del Trabajo, No. 185 (1996) / Labour Code (Codigo del Trabajo), No. 185 (1996), No. 185 (1996)
  • Ley del Salario Mínimo, N º 625 (2007) / Minimum Wages Act, No. 625 (2007)

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