Browse through brief employment and labor law updates from around the globe. Contact a Littler attorney for more information or view our global locations.

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Partial Reform of the Organic Law of Science, Technology, and Innovation

New Legislation Enacted

Author: Richard Ruiz, Associate – Littler

On April 1, 2022, the Partial Reform of the Organic Law on Science, Technology, and Innovation came into force. The reform approved by the National Assembly establishes new methodologies and calculation parameters for the obligatory contributions of public or private, national and/or foreign companies that carry out economic activities in Venezuela.

Companies with annual gross income greater than 150,000 times the exchange rate of the highest value set by the Central Bank of Venezuela, will be required to declare, and pay the mandatory contributions to the National Fund for Science, Technology, and Innovation (FONACIT). Said contributions will be estimated monthly according to the gross income of each company and their amount varies according to the commercial and/or industrial sector to which the company belongs, on the other hand, the liquidation and payment of the contributions must be made monthly in Bolivars. In case of noncompliance, companies can be administratively sanctioned for up to the equivalent of 50% of the amount corresponding to the mandatory contribution not declared or paid.

Increase of Tax Unit

New Legislation Enacted

Author: Daniela Arevalo, Associate – Littler

The Integrated National Service of Customs and Tax Administration (SENIAT) announced an increase of the tax unit from VES 0.02 to 0.4. The increase was published in Official Gazette N° 42.359, dated April 20, 2022.

Under the Organic Law of Sport, Physical Activity and Physical Education, companies that have obtained gross income greater than 20,000 tax units (equivalent to VES 8,000) are obliged to pay 1% of their income for the financing of the sport, physical activity, and physical education fund. Additionally, under the labor laws, all penalties expressed in tax units have increased. For example, the Law of the Socialist Cestaticket for Workers establishes that the employer's failure to grant this benefit will result in a fine between 10 tax units (VES 4) and 50 tax units (VES 20) for each affected worker. In the same way, the payment of a salary lower than the mandatory minimum wage is sanctioned with a fine between 120 tax units (VES 48) and 360 tax units (VEF 144).

Banks Integration

Trend

Author: Gabriela Arevalo, Associate – Littler

On June 22, 2022, the Superintendence of Institutions of the Banking Sector issued an official press release reporting the completion of the migration process and integration of the technological platform of the National Bank of Credit (BNC) and Discount Western Bank (BOD). This integration involves the employer substitution of BOD’s employees, who now become BNC’s employees. Additionally, a total of 2,889,592 accounts were successfully migrated. BOD clients can now make use of the products and services offered through BNC, through electronic banking and points of sale.

Avon Company Stops Producing and Distributing Their Products in Venezuela

Trend

Author: Daniela Arevalo, Associate – Littler

The American company Avon, specialized in the sale of cosmetics, jewelry, perfumes, and toys by catalog, announced that they will stop producing and distributing their products in Venezuela after almost 70 years of operation. According to the Avon statement, which was broadcast on social networks, the company reported that on Tuesday, June 28, 2022, the shares of Avon Cosmetics de Venezuela C.A., were transferred to "a business group of Venezuelan capital," which is not yet known, which will assume the operations and the current payroll of the company.