Worker Rights and Wage Guarantees: SMI, FOGASA, and Payroll Essentials

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Guarantees of Wages and Worker Compensation

Wages are the compensation that gives meaning to the work performed by the worker and are crucial, often being the sole or main source of livelihood. For this reason, governments establish instruments to ensure workers receive sufficient wages.

Minimum Interprofessional Salary (SMI)

The SMI is the minimum remuneration set annually by the government for any full-time employee.

Features of the SMI

• The government sets the SMI annually.
• It can be enhanced by collective agreement or employment contract.
• It is indefeasible (non-waivable).

Wage Credit Preferences

The wages of workers have priority over any other debt.

Characteristics of Wage Preference

• Preference is given only to the wages of the last 30 working days.
• Preference is guaranteed only up to an amount equal to twice the SMI.
• Objects produced by the worker guarantee the salary while owned or held by the employer.

Wage Guarantee Fund (FOGASA)

FOGASA is an independent organization under the Ministry of Labor and Immigration, which guarantees workers' salaries and severance pay due to business insolvency or bankruptcy proceedings.

FOGASA Features and Coverage

FOGASA is funded by contributions from companies employing workers.

• Payment of wages includes bonuses and salaries accrued during processing.
• FOGASA covers the payment of severance pay when the employer cannot meet this requirement, up to a maximum equivalent to one year's salary.

Wage Structure and Components

The wage structure defines the distribution of workers' economic perceptions and is established by collective agreement or employment contract.

Wage Elements

1. Base Salary: This is the fixed remuneration per unit of time or work.
2. Wage Complements: Remuneration determined by reference to particular circumstances relating to:
   • The personal circumstances of the worker.
   • The job performed.
   • The quality or quantity of work.
   • Higher periodic expiration (e.g., monthly bonuses).

Wage Receipt (Payroll)

The wage receipt, or payroll, is a document containing a breakdown of the worker's economic perceptions and the deductions made. It must match the official form established by the Ministry of Labor and Immigration.