Narayan AmmachchiThe Dominican Republic has approved a 20% increase in the minimum wage for the non-sectorized private sector, a move that has raised concerns among foreign investors and business leaders.
The adjustment, sanctioned by the National Salary Committee (CNS), will be implemented in two phases: a 12% increase on April 1, 2025, followed by an additional 8% in February 2026.
President Luis Abinader, who spearheaded the proposal, announced the decision alongside Minister of Labor Eddy Olivares.
The wage hike is expected to benefit nearly 2 million workers, though it has faced resistance from the business community. The Employers’ Confederation of the Dominican Republic (Copardom) initially proposed a lower 10% increase, but Abinader remained firm on the full 20%.
The new wage structure applies across businesses of all sizes.
Abinader justified the increase as necessary to help workers combat inflation, which has significantly eroded their purchasing power. In addition to improving living standards, the government believes that higher wages will stimulate economic growth by increasing consumer spending and demand for goods and services.
Since taking office, President Abinader has consistently advocated for wage hikes to counter inflation. In April 2022, he approved a 24% minimum wage increase for construction workers. The following year, his administration implemented a phased 19% wage hike for non-sectorized private employees. Later, in an effort to support the tourism industry, his government granted substantial wage increases ranging from 20% to 49%.
While the latest wage increase aims to improve worker welfare, it has also intensified concerns about rising labor costs and the potential impact on business competitiveness.
Business Worries? Can you please add the US$ minimum wage even with the additional 20%, is peanuts.