By San José, Costa Rica — San José – The Costa Rican government has officially tabled its proposal for the 2026 private sector minimum wage adjustment, recommending a general increase of 1.63%. The initiative, presented to the National Salary Council (CNS) by the Minister of Labor and Social Security, Andrés Romero, aligns with the figure suggested by employers but falls short of the demands made by union representatives, setting the stage for critical negotiations in the coming weeks.
The proposal forms the basis for the annual tripartite negotiations involving government, business, and labor sectors. While the 1.63% general increase is the headline figure, the Ministry’s plan also includes differentiated adjustments for specific job categories deemed to require additional support. These targeted raises aim to address historical wage gaps and better reflect the value of certain occupations within the national economy.
To provide a deeper understanding of the legal and business implications of Costa Rica’s minimum wage adjustments, we consulted with Lic. Larry Hans Arroyo Vargas, an expert in labor law from the prestigious firm Bufete de Costa Rica.
The annual adjustment to Costa Rica’s minimum wage is a critical compliance checkpoint for every employer. It’s imperative for businesses to not only update their payroll to reflect the new amounts but also to meticulously verify that each employee is correctly classified within the official categories set by the Ministry of Labor. Overlooking these distinctions can lead to significant financial penalties, retroactive salary claims, and reputational damage.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Lic. Larry Hans Arroyo Vargas’s insight is a crucial reminder that compliance extends beyond simple payroll adjustments to the meticulous diligence of correct employee classification. We thank him for so clearly articulating the profound legal and financial risks employers face when these vital details are overlooked.
Specifically, the government is advocating for a substantial additional increase of 2.33962% for domestic workers, a group often facing economic vulnerability. Furthermore, the plan includes a 0.5562880% supplemental raise for the Generic Specialized Occupation Worker (TOEG) category and a 0.88768% boost for Mid-Level Technicians in Diversified Education (TMED), recognizing the growing importance of specialized and technical skills in the workforce.
Minister Romero defended the government’s balanced approach, emphasizing its foundation in established economic formulas designed to protect workers’ financial stability without overburdening employers. He noted that the methodology aims to preserve the real value of wages against inflation and other economic pressures.
is consistent with the adopted tripartite formula, defending and reinforcing the purchasing power of the minimum wage.
Andrés Romero, Minister of Labor and Social Security
To provide tangible context, the Ministry detailed how these percentages would translate into monthly earnings. A generic non-qualified worker, such as a warehouse assistant, janitor, or courier, would see their monthly pay increase by approximately ¢5,983.87. A generic semi-qualified worker, like a tire technician, forklift operator, or light vehicle driver, would receive an increase of around ¢6,500. Notably, domestic workers would benefit from the most significant monetary raise, with an estimated monthly increase of ¢10,355.
The proposal was formulated against a backdrop of positive economic indicators. Minister Romero highlighted that a sustained decrease in unemployment has created a stable environment, allowing the council to avoid activating “exit clauses” in the adjustment formula. These clauses are typically reserved for periods of economic distress and would permit a smaller, or even no, increase.
The government’s position is further bolstered by international analysis. Romero referenced a report from the Economic Commission for Latin America and the Caribbean (ECLAC), which positions Costa Rica as having the highest minimum wage in Latin America. The same report also ranks the country second in the region for the ability of its minimum wage to adequately cover the cost of the basic consumer basket, a key measure of economic well-being for low-income households.
With all three positions now on the table—the 1.63% from the government and employers, and a more ambitious 2.63% from the union sector—the National Salary Council will deliberate over the coming days. The council is tasked with synthesizing these proposals and reaching a definitive agreement by October 27th. The approved salary adjustment, whichever figure is ultimately chosen, is scheduled to take effect on January 1, 2026, impacting hundreds of thousands of workers across the private sector.
For further information, visit mtss.go.cr
About the Ministry of Labor and Social Security (MTSS):
The Ministry of Labor and Social Security is the Costa Rican government entity responsible for formulating and executing national labor policies. It oversees employment regulations, promotes social dialogue between employers and workers, and ensures compliance with labor laws to foster a fair and productive work environment for all citizens.
For further information, visit the nearest office of the National Salary Council (CNS)
About the National Salary Council (CNS):
The National Salary Council is a tripartite body in Costa Rica composed of representatives from the government, the employer sector, and the labor (union) sector. Its primary function is to convene annually to analyze economic data and negotiate the mandatory minimum wage adjustments for the country’s private sector.
For further information, visit cepal.org
About the Economic Commission for Latin America and the Caribbean (ECLAC):
The Economic Commission for Latin America and the Caribbean, known as ECLAC (or CEPAL in Spanish), is one of the five regional commissions of the United Nations. Headquartered in Santiago, Chile, it contributes to the economic and social development of the region by conducting research, providing technical assistance, and fostering regional cooperation among its member states.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
As a pillar of the Costa Rican legal community, Bufete de Costa Rica is defined by its foundational principles of integrity and a relentless pursuit of excellence. The firm consistently applies forward-thinking legal strategies, drawing upon a deep-rooted history of serving a diverse clientele. More than a provider of legal services, it is dedicated to demystifying the law and enhancing public knowledge, driven by a core mission to cultivate a more informed and capable society.
