The Cuban Council of Ministers has sanctioned a new strategy allowing additional payments to employees in the budgeted sector by redistributing unspent salary funds, referred to as "unused salary allocations," in units where the salary budget remains underutilized due to "objective reasons."
Outlined in the Extraordinary Official Gazette No. 45 (August 11, 2025) as Agreement 10199/2025, this measure classifies these funds as "additional payment and salary for all legal purposes," while clarifying that it is not a permanent payment system.
The agreement enables the reallocation of unspent salary funds in budgeted units as a means to encourage workforce stability amidst the "persistent increase" in labor turnover within this sector.
According to the regulation, the authority to approve the "general level of salaries in the country" is vested in the Council of Ministers (as per Art. 113 of the Labor Code), and the decision is anchored in their constitutional jurisdiction.
Eligibility and Limitations of Additional Payments
The extra payment is applicable to workers across all job categories within the budgeted sector, including units with special treatment. However, the same agreement outlines exceptions and stipulations that restrict eligibility for these payments.
Source of Funds: "Unused Salary Allocations"
The agreement stipulates that redistribution is only permissible when the unutilized salary fund is objectively justified and can be accommodated within the allocated salary expense plan for the fiscal year. Reasons for unutilized funds include:
- Workers on subsidies, maternity benefits, unpaid leaves, or other situations where no salary is paid
- Incomplete staffing of approved positions
The agreement highlights two fundamental points. While the payment is deemed additional and counts as salary for all legal intents, it does not establish a permanent or widespread payment system.
Implementation and Approval Process
Each budgeted unit must establish an internal regulation for applying the redistribution. The document mandates:
- Approval by the unit head as the budget administrator, following the agreement of the Management Council
- Involvement of the union in its development
- Review of the content in the General Assembly of Members and Workers
- Incorporation into the Collective Labor Agreement once approved
The regulation must at least include: source of funding (unspent salary funds); frequency (non-permanent and not widespread); allocation procedure (considering high performance, differentiated recognition for highly skilled roles, positions of greater responsibility, a competency-based approach, and individual distribution mechanism); authorities certifying savings and compliance, and a control system.
Decision-Making on Distribution
The agreement specifies that the total amount to be redistributed and the amount for each worker must be approved by the Management Council, in concert with the union, and communicated to the General Assembly.
The Management Council's decision should substantiate the allocation criteria, specify the amount to be redistributed, the individual amounts, and the period to which the payment pertains.
Exclusions and Inclusions
Excluded from application:
- Central State Administration bodies and national entities with differentiated salary increase treatments
- Health and educational institutions whose professionals and teaching staff already receive maximum effort and educational workload benefits
Eligible recipients:
- Workers who did not receive those benefits, or
- Those who only received the additional monthly payment for years of service
The agreement assigns tasks with deadlines. Within 30 days from implementation: heads of organizations, governors, intendants, and OSDE with budgeted units must analyze labor dynamics and financial evaluation of salary expenses to decide which entities can redistribute funds.
Also, within 30 days, they must approve general guidelines for payment application in their system (serving as references for internal regulations).
They are required to evaluate the application quarterly over a year and submit a report on results and impacts to the Ministry of Finance and Prices as part of financial statement notes.
Ministers of the FAR and MININT have up to 30 days from publication to adapt their application in budgeted activities that do not have differentiated salary increases.
Understanding the Cuban Salary Redistribution Plan
What is the main objective of the Cuban salary redistribution plan?
The primary aim is to stabilize the workforce in the budgeted sector by reallocating unspent salary funds as additional payments to employees, addressing high labor turnover.
Who decides the allocation of these additional payments in Cuba?
The allocation is decided by the Management Council, in agreement with the union, and is then communicated to the General Assembly.
Are there any exclusions from receiving the additional payments in Cuba?
Yes, certain central state bodies, national entities with special salary treatments, and institutions whose staff already receive maximum effort benefits are excluded.