Severance pay centers debate in labor reform; business sector proposes tripartite dialogue

Santo Domingo. – The issue of severance pay was once again placed at the center of the national debate on the reform of the Labor Code, with calls to resume a tripartite dialogue that allows consensus on pending points without affecting the acquired rights of workers.

During recent meetings with the business sector, it was highlighted that, although a significant part of the labor reform has already been agreed upon —including aspects such as working hours and procedures—, issues related to labor costs, particularly the severance regime, are still pending. From the business sector, it has been reiterated that the elimination of severance pay is not proposed, but rather its adaptation, with the aim of strengthening the country’s competitiveness, improving productivity, and creating a more favorable environment for the generation of formal employment.

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Among the proposals put forward are the establishment of a cap on severance, the recognition of labor liabilities as deductible from income tax, the calculation of severance based on the average of the salaries earned by the worker and not the last salary, as well as the implementation of unemployment insurance contemplated in Law 87-01. The extension of the trial period from three to six months has also been suggested as a measure to encourage youth employment and reduce the risks associated with hiring, in addition to the revision of Article 86 of the Labor Code, in order to establish limits that provide greater predictability to labor costs. The issue was previously addressed in the Labor Advisory Council, without reaching a definitive consensus, so the proposal to open a new space for dialogue that allows progress on balanced agreements between employers, workers, and the Government is positively valued. This debate takes place in a context where the Government is promoting initiatives such as RD-Trabaja, aimed at promoting formal employment, labor insertion, and social security, reinforcing the need for a modern, sustainable labor framework aligned with the demands of the country’s economic and social development.

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