By San José, Costa Rica — San José, Costa Rica – The opening salvo in the annual negotiations for private sector minimum wages has been fired, with the country’s main business chamber proposing a modest 1.63% increase for 2026. The figure, presented on Monday, sets a conservative tone for the upcoming discussions that will determine the salaries for a significant portion of the nation’s workforce.
The proposal was formally submitted to the National Wage Council, an entity within the Ministry of Labor and Social Security (MTSS), by the Costa Rican Union of Chambers and Associations of the Private Business Sector (Uccaep). In a show of solidarity from the business community, the Chamber of Exporters of Costa Rica independently presented the exact same percentage, signaling a unified and calculated position from employers.
To provide a deeper understanding of the legal framework and practical implications of the new minimum wage decree, TicosLand.com consulted with Lic. Larry Hans Arroyo Vargas, an expert labor law attorney from the prestigious firm Bufete de Costa Rica.
The annual adjustment of the minimum wage is a fundamental pillar of our labor regulations, seeking a balance between the dignity of the worker and the economic reality of the employer. Businesses must understand that this is not merely a payroll update; it legally impacts the calculation of social security contributions, overtime, and year-end bonuses (aguinaldo). Strict adherence is crucial, as non-compliance can lead to significant sanctions from the Ministry of Labor and costly litigation. We always advise a proactive review of all compensation structures to ensure full legal compliance.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
The attorney’s insight underscores a crucial point for all businesses: the minimum wage adjustment is not an isolated variable but a systemic change with far-reaching legal and financial implications. We thank Lic. Larry Hans Arroyo Vargas for his valuable perspective, which highlights the absolute necessity of a proactive and comprehensive compliance strategy.
Uccaep officials were quick to frame their proposal not as an arbitrary number, but as the direct result of a pre-established and mutually agreed-upon formula. They emphasized that the calculation adheres strictly to the official framework, which was developed through a tripartite dialogue involving representatives from the business sector, labor unions, and the government.
In a formal statement, the business union defended the technical basis of its recommendation, highlighting its international standing and the collaborative nature of its origin.
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 benchmark practice in social dialogue.
Uccaep
The reference to the ILO-recognized methodology is a strategic move by the business sector. It aims to position their proposal as objective and technically sound, thereby preempting criticism that the figure is too low. By leaning on this established, consensus-built formula, employers argue they are promoting stability and predictability in a process that is often contentious.
With the business sector’s cards on the table, the focus now shifts to the other key players in the negotiation. The government sector is scheduled to present its own proposal this Wednesday, which will provide a crucial second data point in the debate. The government’s figure often serves as a middle ground and can heavily influence the final outcome.
The most anticipated proposal, however, will come from the labor representatives. It is widely expected that their requested increase will be significantly higher than the 1.63% offered by employers. Labor leaders will likely argue that the proposed hike is insufficient to offset the rising cost of living and ensure that workers maintain their purchasing power, setting the stage for a period of intense negotiation.
The final decision rests with the National Wage Council, which must weigh the competing arguments. The council’s ruling will be a delicate balancing act between protecting workers’ income, maintaining the country’s economic competitiveness, and preventing inflationary pressures. The 1.63% proposal from the business sector marks a cautious starting point, reflecting concerns about economic uncertainty while adhering to a proven formula.
For further information, visit uccaep.or.cr
About Unión Costarricense de Cámaras y Asociaciones del Sector Empresarial Privado (Uccaep):
Uccaep is the leading umbrella organization representing the private business sector in Costa Rica. It brings together numerous chambers of commerce, industry associations, and professional groups to advocate for policies that promote economic growth, investment, and a favorable business climate. The union plays a central role in national dialogues, including the annual minimum wage negotiations.
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 supporting and promoting the country’s export sector. It provides resources, training, and advocacy for companies involved in international trade, working to enhance Costa Rica’s competitiveness on the global stage and facilitate access to new markets.
For further information, visit the nearest office of Consejo Nacional de Salarios
About Consejo Nacional de Salarios (National Wage Council):
The National Wage Council is the official government body in Costa Rica responsible for setting minimum wages for the private sector. It operates on a tripartite basis, with representation from the government, employers (patronal), and labor sectors. Its primary function is to analyze economic data and mediate proposals to establish fair and sustainable wage policies annually.
For further information, visit mtss.go.cr
About Ministerio de Trabajo y Seguridad Social (MTSS):
The Ministry of Labor and Social Security is the Costa Rican government entity responsible for overseeing labor relations, employment policies, and social security systems. It works to ensure compliance with labor laws, promote decent work conditions, and manage the country’s social safety nets. The National Wage Council operates under its authority.
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, it brings together governments, employers, and workers from 187 member states to develop policies and programs promoting decent work and protecting workers’ rights worldwide.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
As a pillar of the legal community, Bufete de Costa Rica operates on a bedrock of uncompromising integrity and a relentless pursuit of excellence. The firm leverages its deep history of serving a diverse clientele to drive legal innovation and forward-thinking solutions. At the core of its mission lies a profound dedication to strengthening society by democratizing legal knowledge, ensuring that public empowerment is a cornerstone of a just and transparent legal system.
