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Further to its previous observations, the Committee notes with satisfaction that the Government has taken significant steps with a view to rationalizing the national minimum wage system and implementing the Convention in a more meaningful manner. It notes, in particular, the adoption of Act No. 17.856 of 20 December 2004 which dissociates the minimum wage from the calculation of social security benefits. According to the terms of the new legislation, a new reference wage (Base de Prestaciones y Contribuciones - BPC) will be used for the determination of social security benefits and contributions and will replace all previous references to the national minimum wage. In this manner, the Government intends to avoid the technical and legal difficulties experienced so far basically due to the fiscal implications of minimum wage increases. The new reference wage will be readjusted depending on the economic situation of the country and will follow the evolution of the consumer price index. The Committee also notes with interest the adoption of the Presidential Decrees of 2 January 2005 by which the national minimum wage rate was increased by almost 50 per cent from 1,310 to 2,050 pesos per month; the minimum wage rate for domestic workers was set at 2,150 pesos per month or 10,75 pesos per hour; and monthly and daily minimum wage rates were fixed for various categories of agricultural workers.

The Committee is satisfied that these positive developments have been made possible with the technical assistance of the Office. In November 2004, for instance, a tripartite workshop was organized at the initiative of the ILO Subregional Office for the South Cone of Latin America to evaluate the functioning of the national minimum wage system in the light of the Committee’s persistent comments and to identify policy options which would allow the national minimum wage to effectively serve as a tool of social protection and poverty reduction.

While noting the recent signs of progress concerning the application of the Convention, the Committee requests once again the Government to indicate whether and how the representative organizations of employers and workers concerned were consulted in relation to the latest increases of minimum wage rates. The Committee would appreciate receiving, in this connection, detailed information on the institutional framework within which such consultations may have taken place and the specific employers’ and workers’ organizations which may have participated in the consultation process. Moreover, the Committee would be grateful if the Government would supply up-to-date information on the evolution of indicators such as the average wage, the inflation rate, or the consumer price index, in recent years in order to enable the Committee to better appreciate whether current minimum wage levels are sufficient to ensure a decent living standard for workers and their families. The Committee expresses the firm hope that the Government will continue its efforts for the establishment of a minimum wage fixing machinery guaranteeing full and regular consultations with the social partners and affording true protection to wage earners with regard to minimum permissible levels of wages.