Mariel workers to keep most of what employers pay

Mariel workers to keep most of what employers pay

CUBA STANDARD — Although foreign investors at the Mariel Special
Development Zone (ZEDM) will still have to hire employees through a
state agency, they will be able to negotiate salaries, contract
self-employed Cubans, and hire as many foreign workers as they want, and
workers will pocket most of what their employers pay the agency.

Speaking at the FECONS construction fair in Havana, Mariel Zone chief
executive Ana Teresa Igarza said that workers at Mariel will receive 80%
of what employers pay the agency, and employers will freely negotiate
salaries with the agency, without having to adhere to any fixed tariffs.

Previously, foreign joint ventures paid salaries under to a fixed scale
in convertible pesos (CUC) to state agency ACOREC, which passed on only
a fraction to workers, in non-convertible Cuban pesos (CUP). Under that
arrangement, foreign companies had few means to provide incentives to
Cuban employees; in a legal gray zone, "many employers" have been paying
hard-currency "gratifications" to good workers, Igarza recognized.

Igarza didn't say whether under new regulations the state agency will
offer employers a choice of workers. However, the new rules do not put
any limits on hiring foreign workers, and the new foreign investment law
also allows contracting self-employed Cubans through the state agency,
according to reports in official media.

The state agency is designed to help foreign investors, because "many
don't know the country, and they will be offered suitable workers,"
Foreign Trade and Investment Ministry official Deborah Rivas defended
its continued existence in a press conference with local media last week.

Igarza said the new employment agencies' main aim, according to the new
foreign investment law passed in March, is not to collect, but to "offer
a service" — "to supply and facilitate the personnel best qualified for
the activity."

"This will make investors feel motivated because they have to pay less,
and workers as well because they receive larger salaries than those
before, and therefore productivity is incentivized," Igarza said,
according to official news reports.

In negotiating salaries, employers must consider the high level of
education among Cuban workers, Igarza said during her speech. The
Foreign Investment Ministry's Rivas said that negotiations will be based
on comparable salaries in Latin America and average salaries in Cuba. If
an example cited by Igarza is an indication, Mariel jobs could pay more
than 10 times as much as the median salary in Cuba. The 20% fee will go
towards the cost of providing services, such as maintaining offices,
Igarza said.

In a hint of how the government is planning for a currency merger,
Igarza said that during the transition the workers will be paid in
soft-currency CUP, at a rate of 10:1 for each hard-currency CUC the
employer pays the agency. Observers have predicted a CUC devaluation in
that range as part of the ongoing currency reform; the current exchange
rate is 25 CUP per CUC. The CUC will eventually be pulled out of
circulation.

Regulations about contracting and paying personnel will soon be
published in the Gaceta Oficial, Igarza said. The new foreign investment
law, passed by the National Assembly March 29, has yet to be published.

During the same speech, Igarza said the Mariel Zone administration is
working closely with foreign investors on 15 projects, which could
materialize as early as this year.

Source: Mariel workers to keep most of what employers pay « Cuba
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