I. On January 1st 2019, amendments on the deductions on salaries and pensions regime came into force
Art. 353 of Law 19,670 (Application of accountability and budget allocation balance) modified and therefore replaced Art.3 of Law 17,829 (Deductions on salaries and pensions regime).
To this effects, no natural person may receive as a salary or pension an amount less than 35% of the nominal amount after the deduction of income taxes and their corresponding advances and special social security contributions.
Also, the regulations foresees that in the event that the deductions stated in lit. A) of Art. 1 of Law 17,829 and the ones corresponding to the cooperative acts referred to in lit. G) of the same article, said percentage will not exceed 30%.
The legal consequence for the modification that took place is that the minimum percentage of salary that the worker must receive will not suffer further increases as foreseen in the previous drafting.
II. Extension of the obligation to pay by electronic means to domestic service workers registered as day laborers in BPS (Social Security Bank)
As of April 1st 2018, all domestic service workers registered in the Social Security Bank as monthly workers should receive their salary through a financial intermediation institution or an electronic money issuing institution. Said obligation would not rule for the day laborers in the domestic service sector until December 31st, 2018.
Therefore, from January 1st 2019 every domestic service worker registered as a day laborer must receive their salary through a financial intermediation institution or an electronic money issuing institution, being the workers themselves the ones to decide.
Without prejudice, those domestic service workers (both monthly and day laborers) whose employer receives pensions or retirement payments from any social security institution (as of December 31st, 2017) are exempted of the compulsory payment by electronic means. For this purpose, a written agreement between the worker and the employer must be documented, stating that the means of payment will be cash.
III. Amount of the national minimum wage
By decree 25/2019, the Executive Power increased to a monthly amount of $ 15,000 (Uruguayan pesos fifteen thousand) the national minimum wage starting January 1st, 2019. Also, the value of the daily wage was set at $ 600 (Uruguayan pesos six hundred), and the hourly wage at $ 75 (Uruguayan pesos seventy-five).
IV. Amendment to the general regime of special leave
Law 19,729 of December 28th 2018 incorporated to Law 18,345 (General regulation of special leaves for workers in the private sector) two articles that determine new paid special leaves:
A) Special leave for workers with disabled children:
Every worker that has a disabled child according to the regime provided by Law 19,691, will be entitled to request up to a total of ten days a year for the child´s medical checks, as a paid leave.
The communication to the employer of said circumstance shall be made with a prior notice of 48 hours.
For the purposes of crediting the reason that caused the request for paid leave, the worker will have the same term to file the corresponding medical certificate.
B) Special leave for workers in charge of disabled or terminally ill family members:
Those who are in charge of disabled or terminally ill family members according to the regime provided by Law 19,691, will be entitled to a special leave of 96 hours per year that can be used in a continuous or discontinuous way, of which the employer must pay the corresponding to 64 hours.
C) Common characteristics to both leaves:
- More favorable regimes for the worker wan be agreed through the collective agreement or the corresponding Wages Council.
- None of the special leaves prescribed by this law generates the right to a holiday pay.
- The rights established by Law 18,345 are unwaiverable. The planned leaves must be enjoyed effectively, as they cannot be replaced by any salary or compensation of any sort.
V. Meal tickets
Law 19.732 introduced modifications to the regime of taxable matter of the meal tickets, determining accordingly two requirements that meal tickets must comply to be exclusively taxed for employer contributions in a scale of 7.5%:
A) The daily meal ticket payment (regardless it is paid by the employer or paid in kind) must not exceed the equivalent of 150 indexed units for the purpose of not constituting taxable matter for personal contributions or revalued benefits. Starting January 1st, 2020, said maximum amount will be of 100 indexed units. The value of the indexed unit taken into account will be the one existing on January 1st of every year (the value of the index unit as of January 1st, 2019: $ 4.0275).
The abovementioned amendment will become into force on April 1st, 2019, even though it is established that the Executive Power will be able to extend said term for a maximum of six more months.
B) The total amount of monthly meal tickets shall not surpass 20% of the retribution that the employee receives in cash for items that constitute taxable matter. In the events that said percentage is exceeded, the surplus will be taxed in accordance to Art. 153 of Law 16,713.
VI. Financing of the Labor Credit Guarantee Fund
Starting on January 1st, 2019, due to the creation of the labor credit guarantee fund which is intended to cover the emergency contingency of the employer being administered by BPS (Social Security Bank), there was a reduction in the percentage rate of employer and personal contributions to the Labor
Reconversion Fund, changing from 0.125% to 0.10%.
The percentage corresponding to the reduction of the abovementioned rate, equivalent to 0.025%, will be rendered to finance the Labor Credit Guarantee Fund.
Montevideo, January 2019