New Decree 164 expands salary autonomy for state enterprises

Cuba's state-owned enterprises will now have greater control over how they pay their workers, thanks to a new decree that links salaries directly to economic and financial performance. Decree 164, published in the Official Gazette, replaces an earlier regulation and aims to strengthen the state enterprise sector, considered a pillar of the national economy.

A key change under Decree 164 is the increased autonomy for businesses in managing their salary structures and human resources. Previously, companies needed special authorization to implement new payment systems. Now, all state entities, including business groups, subsidiaries, and financial institutions, can determine their salary organization independently. This also extends to certain budgeted units and organizations funded by their own revenue.

Guillermo Sarmiento Cabanas, Director of Labor Organization at the Ministry of Labor and Social Security, explained that this move continues a process started in 2021 to give state enterprises more power. The goal is to allow each entity to make decisions that best suit its specific production and organizational needs, with the only limits being its financial capacity and adherence to established legal principles.

The decree reinforces the principle that sustainable salary growth must be based on increased efficiency, productivity, and wealth creation. Salary levels will directly depend on each company's financial health, meaning the wage fund will grow only if efficiency and production results improve. "The fundamental objective is to increase production levels and labor productivity," Sarmiento Cabanas stated, adding that salary increases are a consequence of these improvements.