The Cuban government approved a regulatory amendment that allows the management of budgeted institutions to sign economic contracts with their own employees to provide professional services, maintenance work, and other similar activities, as stated in the of 2026, published in the Official Gazette.
The Council of Ministers of Cuba approved the regulation —which amends Article 38 of Decree 127 "On Budgeted Institutions"— to expand the powers of the heads of these entities, including the possibility of entering into economic contracts directly with their own workers.
The provision was issued on July 24, 2026, and signed by Prime Minister Manuel Marrero Cruz; it came into effect this Tuesday as it was published in the , pages two and three.
The main change consists of expressly including among the powers of the head of the Budgeted Unit the ability to "sign economic service contracts or similar agreements with their own employees for the execution of professional activities, construction maintenance, and similar tasks."
This new attribution adds to those already recognized by Decree 127: efficiently utilizing the assigned material and financial resources, opening bank accounts, creating expense centers, signing economic contracts in general, managing and accessing any lawful source of financing, and partnering with another economic actor with prior approval.
The compensation received by workers under these contracts is not considered salary; rather, it corresponds to a payment for the agreed-upon service, and any disputes that arise are handled through contractual means, not as ordinary labor conflicts.
The decree also clarifies that these contracts do not eliminate or modify the guarantees stemming from the employee's ordinary labor relationship with the entity, including those related to safety and health in the workplace.
The text of the regulation explains its motivation: the National Assembly of People's Power approved 176 Economic and Social Transformations on June 18 and 19, 2026, and among those measures is to allow workers of the same entity —both in the business sector and in the budgeted sector— to carry out professional activities and construction maintenance through economic contracts.
The Decree 162 is part of the regulatory framework that supports this package of reforms. According to Miguel Díaz-Canel, who reported on Monday, the Government has approved 215 legal norms to provide legal coverage for the 176 transformations; as of the end of October, 97.2% of the measures—171 out of 176—already had their legal bases completed.
The Decree 127, which is now modified by Decree 162, was approved on May 5, 2025, and for the first time established a general legal framework for the approximately 2,443 budgeted units operating in Cuba —hospitals, schools, and central administration bodies, among others— entities that account for more than 50% of the active workforce in the state sector.
The First Final Provision of Decree 162 orders the Minister of Justice to publish, within a maximum period of 30 days from the entry into force of the regulation, the updated, revised, and harmonized version of Decree 127 in the Official Gazette.
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