With the new year came to Mexico the much awaited raise to minimum wages, along with the creation of the “Northern Border Free Zone”. This has been confusing for workers, labor unions and companies, so we hope to help you understand it better by reviewing 4 key points. If you would like custom legal advice instead, feel free to send us a message or email here. Let’s start:
The Council of Representatives for the Minimum Wages National Commission, issued a resolution that sets the professional and general minimum wages, which will be enforced starting on January 1st, 2019, and in attention to this point, it was published in the Federal Official Gazette on December 26, 2019, the resolution through which they are established and the places of application.
In summary, the main changes that we should consider are the following:
1. Creation of 2 geographical areas
The first resolution of the publication establishes that Mexico will have 2 geographical areas of application for the minimum wages:
a) The Northern Border “Free Zone” geographical area, integrated mainly by the municipalities that have border with the United States of America: Ensenada, Playas de Rosarito, Mexicali, Tecate and Tijuana, on the State of Baja California; San Luis Río Colorado, Puerto Peñasco, General Plutarco Elías Calles, Caborca, Altar, Sáric, Nogales, Santa Cruz, Cananea, Naco and Agua Prieta, on the State of Sonora; Janos, Ascensión, Juárez, Práxedis G. Guerrero, Guadalupe, Coyame del Sotol, Ojinaga and Manuel Benavides, on the State of Chihuahua; Ocampo, Acuña, Zaragoza, Jiménez, Piedras Negras, Nava, Guerrero and Hidalgo, on the State of Coahuila de Zaragoza; Anáhuac, on the State of Nuevo León; and Nuevo Laredo, Guerrero, Mier, Miguel Alemán, Camargo, Gustavo Díaz Ordaz, Reynosa, Río Bravo, Valle Hermoso and Matamoros, on the State of Tamaulipas.
The minimum wage in this geographical área of application will be of $176.72 mexican pesos every day, for each work day/shift;
b) The other geographical area will be the Rest of the country, integrated by the remaining of the cities of the country and territorial delimitations (municipalities) of México City that comprise the Mexican Republic.
The minimum wage in this geographical area will be of $102.68 Mexican pesos daily, for each work day/shift;
Due to the above, starting this January, these new wages must be considered for every employee that, for a work day/shift, earns an inferior amount against the new minimum wage. It must be adjusted to at least the one mentioned as minimum wage for 2019.
The application of this new wage criterion could produce practical and interpretative problems for the companies and its employees, since it has a novation in the work conditions, without the employee’s nor the company’s volition.
It is important to consider that this resolution does not increase the wages of all employees of the company, it is only for the ones earning an inferior daily amount of $176.72 Mexican pesos. This is independent of any increase on wages contemplated otherwise by the employers.
2. Validity of minimum wages
In the terms of the resolution of the H. Council of Representatives of the Minimum Wages National Commission, both general and the minimum professional wage will come into force as of the 1st day of January 2019.
3. Legal framework
We must bear in mind that section 90 of the Federal Labor Law (LFT), establishes:
“….section 90 LFT.- Minimum wage is the least amount to be received by an employee for his services rendered in a work day/shift….”
Likewise, section 94 of the Labor Law, states:
“….section 94 LFT.- The minimum wages will be established by a National Commission, integrated by representatives….”
On the other hand, section 97 of the same labor law establishes:
“….section 97 LFT.- The minimum wages should not be object of any compensation, discount or reduction, except in the following cases….”
It should be noted that the permitted deductions referred to on the transcribed section 97 correspond mainly to the payment of alimony, or to INFONAVIT or FONACOT credits.
4. Recommendations for companies
It is important to review in each company the particular situation regarding the state of current wages, to see if it is necessary to make adjustments in those cases in which the minimum wage in effect as of 2019 is higher than the wage currently received by their employees.
The purpose of this piece is to provide an informative summary of the new provisions related to companies and their employees, but for more information you should talk with a lawyer.
Here you can read an electronic document which contains the publication in the Official Gazette of the Federation of the resolution of the H. Council of Representatives for the National Commission of Minimum and General Wages, effective as of January 2019.
If you have any questions or require more specific information regarding this topic, please do not hesitate to contact us here.
The content of this website is not or should not be considered as legal advice, the information displayed is for informative purposes only.