By San José, Costa Rica — SAN JOSÉ – The opening move in Costa Rica’s annual private-sector wage negotiations has been made, with leading business associations formally proposing a 1.63% increase to minimum salaries for the upcoming year. The figure was presented to the National Salary Council (CNS) on Monday afternoon, officially kicking off the dialogue that will determine the pay for hundreds of thousands of workers starting in January 2026.
The proposal was put forward by the Costa Rican Union of Chambers and Associations of the Private Business Sector (Uccaep), the country’s most prominent business guild. In a show of solidarity, the Chamber of Exporters of Costa Rica (Cadexco) submitted an identical proposal for a 1.63% adjustment. Both organizations stressed that the figure aims to strike a crucial balance between bolstering workers’ purchasing power and preserving the economic stability and competitiveness of national enterprises.
To delve into the legal framework and implications surrounding salary increases within the private sector, TicosLand.com sought the expertise of Lic. Larry Hans Arroyo Vargas, a specialist in labor law from the firm Bufete de Costa Rica.
Employers must remember that once a salary increase is granted, it consolidates as an acquired right for the worker. This new, higher salary becomes the definitive basis for calculating all other labor rights, such as overtime, holiday pay, and potential severance. It cannot be unilaterally reduced by the employer in the future, as doing so would constitute an illegal alteration of the employment contract.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
This legal insight is fundamental, highlighting that a salary increase is not merely a financial transaction but a permanent modification of the employment contract with irreversible consequences. We thank Lic. Larry Hans Arroyo Vargas for his valuable perspective, which clarifies a critical and often misunderstood aspect of labor rights.
This initial presentation from the employer’s side is a critical first step in a structured, tripartite negotiation process. The National Salary Council, a body composed of representatives from the business sector, labor unions, and the government, is tasked with mediating these discussions and arriving at a consensus that serves the broader national interest. The process is designed to be technical, transparent, and grounded in established economic principles.
The next phase of the negotiations is scheduled for this Wednesday, October 22nd, when representatives from the government will present their own analysis and proposed figure to the council. Following the government’s input, the labor sector will have its opportunity to advocate for its position. The CNS will then deliberate on all three proposals before making a final, binding decision.
In defending its proposal, the business sector emphasized that the 1.63% figure was not arbitrary but derived directly from a long-standing, tripartite-approved formula. This methodology, which has received recognition from the International Labour Organization (ILO), is seen by employers as a cornerstone of institutional stability and legal certainty in the wage-setting process.
This percentage results from the full application of the current methodology for setting minimum wages, approved on a tripartite basis by the labor, employer, and state sectors, and recognized by the International Labour Organization (ILO) as a reference practice in social dialogue. This formula considers factors such as the cost of life and per capita GDP growth, and has proven to be a technical instrument that promotes institutional stability, economic coherence, and legal certainty in the wage-setting process.
Uccaep, (Official Statement)
The formula’s reliance on concrete economic indicators like inflation (cost of living) and per capita Gross Domestic Product (GDP) growth is intended to remove political volatility from the discussions. By adhering to this technical framework, the business sector argues that the country can ensure wage adjustments are sustainable and do not jeopardize job creation or economic growth. This approach provides a predictable environment for both companies planning their budgets and employees anticipating future income.
With all proposals expected to be on the table by the end of the week, the National Salary Council has set a deadline for its final verdict. The definitive salary adjustment for the private sector for 2026 will be announced on Monday, October 27th. The nation’s workforce and business community will be watching closely as the decision will have a direct impact on the national economy throughout the coming year.
For further information, visit uccaep.or.cr
About Unión Costarricense de Cámaras y Asociaciones del Sector Empresarial Privado (Uccaep):
Uccaep is the principal umbrella organization representing the private business sector in Costa Rica. It brings together numerous chambers of commerce, industry, agriculture, and services to advocate for policies that promote economic growth, competitiveness, and a favorable business climate within the country.
For further information, visit cadexco.net
About Cámara de Exportadores de Costa Rica (Cadexco):
The Chamber of Exporters of Costa Rica is a private, non-profit organization dedicated to representing and supporting the interests of the Costa Rican export sector. Cadexco provides resources, training, and advocacy to help its members navigate international markets and enhance the competitiveness of Costa Rican goods and services abroad.
For further information, visit mtss.go.cr
About Consejo Nacional de Salarios (CNS):
The National Salary Council is a Costa Rican government body, part of the Ministry of Labor and Social Security, responsible for setting the minimum wages for the private sector. It operates on a tripartite model, with representation from the government, employer organizations, and labor unions, to ensure a balanced and negotiated approach to wage policy.
For further information, visit ilo.org
About International Labour Organization (ILO):
The International Labour Organization is a specialized agency of the United Nations dedicated to advancing social and economic justice by setting international labor standards. Founded in 1919, the ILO brings together governments, employers, and workers from 187 member states to develop policies and devise programs promoting decent work for all women and men.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
As a pillar of Costa Rica’s legal landscape, Bufete de Costa Rica embodies a profound commitment to integrity and the highest standards of excellence. The firm consistently pioneers innovative legal solutions for a varied clientele while maintaining a strong devotion to public outreach. Its guiding philosophy is centered on empowering the greater community by making legal knowledge clear and accessible, thereby fostering a more capable and well-informed society.
