Salary, as the main obligation of the employer and an essential form of remuneration for the employee’s work, is an issue of constant concern for both parties within the employment relationship. First, we will proceed to explain the definition of salary and the different types or elements that exist.

Pursuant to article 162 of the Labor Code, “salary is defined as the compensation that the employer must pay the worker under the employment contract.” For its part, article 164 of the same regulatory body establishes that “the salary can be paid per unit of time, per piece, per task; in money; in money and kind; and for participation in the profits, sales or collections made by the employer”.

Based on the aforementioned regulations, we can conclude that this type of payment, is the remuneration that a worker receives as consideration for the service provided to his employer and that this remuneration can be of any kind or form. The jurisprudence and the doctrine, establish that the salary includes not only the one agreed by the parties, but also the additional remunerations; bonuses, commissions, prizes, zoning, seniority, etc.; Therefore, we can conclude that it refers to the total benefits received by the worker.

There are different types of salary, depending on their nature, our Labor Code establishes the following:

– Salary in money: This constitutes the essential form of payment, which must be made in legal tender, according to article 165 of the Labor Code, and reach at least the legal minimum. This means that it is not possible to use other forms of payment to complete this type of payment.

– Salary in money and in-kind: Salary in kind is defined as any benefit that, although not granted in money, constitutes a salary advantage. Article 166 of the Labor Code indicates that “Salary in kind is understood only as what the worker or his family receives in terms of food, housing, clothing, and other items intended for his immediate personal consumption.

– Salary by piece, task, or piecework: This is a payment modality, in which the company or employer transfers a factor of production to its employees, with the aim of encouraging their work. Similarly, it should be ensured that the productivity per piece is equivalent to an 8-hour day in normal work and 6 hours in heavy or dangerous work.

– Salary for participation in profits, sales, or collections (commissions): This type of payment can be made in two ways:

a) Fixed salary + commission: If the person works a full day, the sum of these can never be less than the minimum wage and if it is, the company must make the adjustment to complete the minimum wage.

b) Salary only for commissions: It is possible for this type of payment is earned only on commissions,
however, like the previous one, in case-”.

Parties are able to set the form of payment between them, however, they must respect the parameters described in the aforementioned article. If you require advice on Labor Law, ERP Lawyers has a specialized team in the field. Do not hesitate to contact us by email at info@erplawyers.com.