#ElSalvador 🇸🇻 #BDS_LaborAlert: 12% Increase to Minimum Wage Approved, Effective June
Effective June 1, 2025, the new minimum wage rates in El Salvador will come into force, as...
The Ministry of Labor and Social Welfare (MTPS in Spanish) clarified that the recent legal reform regarding the 2025 Christmas bonus (aguinaldo) affects only the payment period, not the reference date for calculation.
This clarification stems from the fact that the law was published after the newly established reference date (October 20). Specifically, the law was published in the Official Gazette of the Republic of El Salvador on October 15, Volume No. 449, Issue No. 194, and stipulated that it would enter into force on October 23. As such, it cannot be applied retroactively this year due to constitutional restrictions on non-public order laws.
At a press conference on October 24, Labor Minister Rolando Castro explained that, exclusively for 2025, both public and private sector employers may choose to pay the bonus early in October or maintain the traditional payment date, provided it is made before December 20, at the employer’s discretion.
The President of the Republic clarified that, in the case of the private sector, if an employer chooses to take advantage of the option to advance the Christmas bonus payment, the bonus must be calculated as if it were paid in December, and the employer must assume the corresponding risk in the event of resignation or termination of the employment contract prior to that date. Employers who wish to avoid such risk may maintain payment within the ordinary timeframe.
Therefore, employers may, for this year, preserve the original reference date (December 12) for the calculation and average of the bonuses to be paid during 2025, in order to avoid unforeseen financial impacts and accounting inconsistencies arising from the change; or they may pay the bonus early in accordance with the new provision, while considering the consequences mentioned above.
It is important to note that this option applies only to 2025. Starting in 2026, all provisions of Decree No. 433 will be fully applicable to the calculation of Christmas bonuses.
Please contact us if you have questions or require legal assistance regarding the correct compliance with this labor obligation for employees in your company.
