SMEs are to be the hardest hit by Venezuelan Labor Law

Ismael Pérez Vigil, the executive president of the Venezuelan Confederation of Industries (Conindustria), said that the Organic Labor Law will have a "very strong" impact on Venezuelan companies.

"Obviously, retroactivity (of severance payments) will have a very strong impact; (Venezuelan) businesses will be hardly hit," Pérez Vigil said during a forum on labor relations organized by Conindustria.

The industrial leader added that it is difficult to estimate the cost of retroactivity for all Venezuelan companies, as it depends on the sector they operate or their number of workers. However, he stated that the impact will be significant, particularly for Small and Medium-sized Enterprises (SMEs) 

Pérez Vigil explained that SMEs have little financial muscle and will have to borrow to pay workers social benefits.

With reporting by Roberto Deniz