Cuba allows change in pay system

Cuba said Friday that it would allow foreign companies to pay Cuban employees with hard currency, a move that legalizes widespread under-the- table payments but also requires workers to declare and pay tax on that income.

Representatives of 698 foreign companies registered with Cuba’s Chamber of Commerce were told by Finance Ministry officials this week that as of Jan. 1, they must record all hard currency payments to employees.

Foreign businesses in communist Cuba employ workers through government agencies, which are paid in hard currency.

In turn, the government agencies pay the employees in Cuban pesos, which are worth much less.

To supplement the low wages, companies often pay their Cuban employees an additional amount under the table in hard currency, and authorities have turned a blind eye, until now.