March 19, 2020

Two Possible COVID-19 Scenarios for Employers in Mexico

Holland & Knight Alert
Leslie Palma

In response to the new coronavirus (COVID-19), and the immediacy and uncertainty of the fast-developing global crisis, Mexican employers may face the following two scenarios regarding work suspension in the country:

1. If the Mexican government, through the health authorities, issues a labor suspension:

The Federal Labor Law establishes that if the health authorities issue a suspension of labor relationships, employers must pay a general minimum wage for each day the suspension lasts as compensation to employees, with the measure not to exceed one month. The general minimum wage in Mexico is 123.22 pesos per day (approximately US$5.14), so the total compensation would be 3,696.60 pesos (about US$154.06). In view of the actions endorsed by other countries and the pressure that the World Health Organization (WHO) is exerting on Mexico, such a suspension seems likely to be enforced by the federal government in the next few days.

2. If the employer, as preventive measure, suspends labor activities without a government notice:

a. the company must pay full salary to employees

b. in case of disease or incapacity, employees must obtain a certificate of illness or incapacity issued by the Mexican Social Security Institute; in this case, employers will not be obliged to pay those employees' salaries because the Mexican Social Security Institute will subrogate this obligation

The Mexican government has not yet issued a labor suspension as a sanitary measure as of this writing.

If you have any questions regarding the COVID-19 outbreak and its effects on the labor industry in Mexico, please contact Leslie Palma, head of Holland & Knight's Labor, Employment and Benefits Group in the Mexico City office.

To learn more about how COVID-19 is affecting the labor industry in Mexico, see Holland & Knight's previous alert, "Mexico Labor Recommendations with Regard to the Coronavirus," March 5, 2020.

DISCLAIMER: Please note that the situation surrounding COVID-19 is evolving and that the subject matter discussed may change on a daily basis. Please contact your responsible Holland & Knight lawyer for timely advice.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem. Moreover, the laws of each jurisdiction are different and are constantly changing. If you have specific questions regarding a particular fact situation, we urge you to consult competent legal counsel

Related Insights