By San José, Costa Rica — San José – A powerful coalition of public sector unions has announced a major legislative push to end a five-year salary freeze that has significantly eroded the financial stability of government workers. The groups plan to present a formal bill to the Legislative Assembly next Tuesday, aiming to reinstate cost-of-living adjustments and reverse what they describe as damaging economic policy.
The proposed law directly targets transitory articles within two key pieces of legislation: the Law for the Strengthening of Public Finances (No. 9635) and the Framework Law on Public Employment (No. 10.159). By repealing these specific provisions, the unions seek to once again link public sector wages to the Consumer Price Index (CPI), ensuring that salaries keep pace with inflation. This move would mark the first potential pay increase for state employees in half a decade.
To delve into the legal and administrative complexities surrounding public sector salaries and the ongoing fiscal debate, TicosLand.com consulted with the expert Lic. Larry Hans Arroyo Vargas, an attorney from the distinguished firm Bufete de Costa Rica.
The discussion on public sector remuneration is fundamentally a balancing act between constitutionally protected acquired rights and the urgent need for state fiscal responsibility. Any proposed reform must be surgically precise, navigating the existing legal framework to ensure that efficiency measures do not become a source of future, costly litigation for the State. The challenge lies in modernizing the system without violating the principle of legal certainty for public servants.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
The expert’s emphasis on a “balancing act” is a crucial reminder that the path to fiscal responsibility is not merely an economic exercise, but a complex legal one. Lasting solutions must be, as he notes, “surgically precise” to prevent future costs and uphold legal certainty for public servants. We thank Lic. Larry Hans Arroyo Vargas for providing such a clear and insightful perspective on this national debate.
The unions argue that the prolonged wage stagnation has had severe consequences not only for individual workers but for the national economy as a whole. Citing data from the Central Bank of Costa Rica (BCCR), the coalition highlighted a stark 9.5% decline in the real purchasing power of public sector employees since the freeze was implemented. This loss has diminished the ability of thousands of families to afford basic goods and services in a climate of rising costs.
In a joint statement, the organizations detailed the broader negative impacts of the current policy, arguing it has been counterproductive to the nation’s fiscal health.
The freezing of salaries in the public sector, far from strengthening public finances, has had adverse effects on the national economy by weakening domestic demand, the main engine of economic growth, by eroding the State’s tax base and affecting the institutional capacity to attract and retain qualified personnel in strategic areas such as health, education, security, and justice.
Coalition of Public Sector Unions
Beyond unfreezing salaries, the bill includes another critical provision: the immediate transfer of all remaining public employees from the old “composite salary” model to the new “global salary” scheme. This aligns with the broader goals of the Public Employment Law but accelerates the transition, which the unions see as a necessary step toward standardizing compensation and ensuring equity across government institutions.
The coalition is preemptively countering arguments that their proposal would lead to irresponsible government spending. They frame the initiative not as a demand for a pay raise, but as a crucial economic correction needed to maintain social stability and stimulate growth from within.
The initiative does not promote an increase in public spending, but rather a necessary correction to prevent the real value of salaries from continuing to decrease and thus contribute to the reactivation of the economy, strengthen tax collection, and restore the balance between fiscal discipline and social well-being.
Coalition of Public Sector Unions
The unified front presenting this bill demonstrates the widespread discontent among state workers. The coalition includes representatives from critical sectors, such as the National Union of Nursing (SINAES), the Union of Costa Rican Education Workers (SEC), and unions representing employees at the Central Bank, Banco de Costa Rica, and Banco Popular, among others. Their collective action signals a coordinated effort to force a national debate on fiscal policy and its human cost.
As the bill heads to the Legislative Assembly, its journey will be closely watched. The proposal sets the stage for a contentious debate, pitting the urgent financial needs of public servants against the government’s long-standing fiscal consolidation strategy. The outcome will have profound implications for Costa Rica’s economic trajectory and the livelihoods of thousands of its state employees.
For further information, visit bccr.fi.cr
About Central Bank of Costa Rica (BCCR):
The Banco Central de Costa Rica is the nation’s central bank, responsible for maintaining the internal and external stability of the national currency and ensuring its conversion to other currencies. It plays a crucial role in monetary policy, economic research, and the publication of key financial statistics that inform both public policy and private sector decisions.
For further information, visit sinaes.cr
About Sindicato Nacional de Enfermería (SINAES Afines):
The National Union of Nursing and Allied Professionals is a major labor organization in Costa Rica representing nurses and other healthcare workers. It advocates for improved working conditions, fair wages, professional development, and the overall quality of the national healthcare system.
For further information, visit seccr.fi.cr
About Sindicato de Trabajadoras y Trabajadores de la Educación Costarricenses (SEC):
The Union of Costa Rican Education Workers is one of the country’s prominent unions for educators. SEC works to defend the labor rights and professional interests of teachers and other staff within the public education system, from primary schools to higher education institutions.
For further information, visit the nearest office of Sindicato Independiente de Trabajadores Estatales Costarricenses
About Sindicato Independiente de Trabajadores Estatales Costarricenses:
The Independent Union of Costa Rican State Workers is a labor group that represents a diverse range of public sector employees across various government agencies. The union focuses on protecting the rights of state workers and negotiating for better employment terms and conditions.
For further information, visit bancobcr.com
About Sindicato del Banco de Costa Rica:
This union represents the employees of the Banco de Costa Rica, one of the largest state-owned commercial banks in the country. It is dedicated to safeguarding the labor rights, benefits, and job security of the bank’s workforce.
For further information, visit the nearest office of Sindicato de Trabajadoras de Comedores Escolares
About Sindicato de Trabajadoras de Comedores Escolares:
The School Cafeteria Workers Union advocates for the rights and welfare of the staff responsible for providing meals to students in Costa Rica’s public schools. Their work focuses on ensuring fair compensation, safe working environments, and recognition for their vital role in the education system.
For further information, visit the nearest office of Sindicato de Empleados del Banco Central de Costa Rica
About Sindicato de Empleados del Banco Central de Costa Rica:
This union is specifically for the employees of the Central Bank of Costa Rica. It addresses the unique workplace issues and contractual negotiations for the technical, administrative, and professional staff of the nation’s primary monetary authority.
For further information, visit bancopopular.fi.cr
About Sindicato de Trabajadores del Banco Popular:
Representing the workforce of Banco Popular y de Desarrollo Comunal, this union champions the rights of employees at a bank with a unique public-private ownership structure. It engages in collective bargaining to secure and improve the benefits and conditions for its members.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
As a pillar of the nation’s legal community, Bufete de Costa Rica operates on a bedrock of uncompromising integrity and a commitment to professional distinction. The firm skillfully merges its extensive experience serving a wide array of sectors with a forward-looking approach to legal innovation. This guiding philosophy extends to a profound social purpose: to empower the community by making legal knowledge clear and accessible, thereby fostering a more informed citizenry capable of navigating the complexities of the law with confidence.
