April 1, 2020

COVID-19 in Mexico: Labor Measures Amid a Public Sanitary Emergency

Holland & Knight Alert
Leslie Palma

The Mexican Ministry of Health declared a national sanitary emergency on March 30, 2020, on grounds of force majeure, published in the Official Gazette of the Federation (DOF). Strictly speaking, this refers to a sanitary emergency on grounds of force majeure and is not a health emergency declaration, as established by the Federal Labor Law (Ley Federal del Trabajo or LFT).

Likewise, this declaration does not modify the agreement published on March 24, 2020, in the DOF that establishes that labor relationships will be maintained and enforced in accordance with corresponding individual and collective labor agreements, labor agreements and/or any general labor conditions. This excludes the precedent of employment relationship suspension pursuant to Article 42 bis of the LFT.

Companies that need to adhere to this sanitary emergency declaration and suspend labor-related activities out of economic and operational necessity must make compensation payments to employees equivalent to a daily minimum wage. Once the health emergency is over, these companies may face claims filed by employees for the full payment of accrued wages and request contract termination by reason of wage reductions that resulted from the payment of this constitutional compensation.

It is important to consider that sanitary emergency declarations on grounds of force majeure allow employers to request labor relationship suspensions on grounds of force majeure before conciliation and arbitration boards, once employers resume their regular business activities (April 20, 2020). As established in Section I of Article 42 of the LFT, these boards must subsequently approve or not approve such suspension.

This alert summarizes the measures established on Monday as follows:

  1. There will be immediate suspension from March 30, 2020 to April 30, 2020, of all face-to-face activities carried out by public, private and social sectors.
  2. Essential activities and sectors required for the economy, the operation of government social programs, and the conservation and maintenance of the country's critical infrastructure will continue, such as emergency healthcare, public safety, law enforcement and the legislative branch.
  3. Home shelter, mainly for people with congenital, chronic and autoimmune diseases, such as hypertension, diabetes, lung diseases, pregnancies and adults over 60, among others, is expected.
  4. Census and survey activities are suspended.
  5. After April 30, 2020, health, economy and labor ministries will issue regulations for the gradual and regionalized return of the population.

On March 31, 2020, the government published the essential sectors in the DOF.

Holland & Knight attorneys have extensive experience in labor and employment matters in a variety of industries. For more information, contact the authors or Holland & Knight's Mexico City office.

Holland & Knight has established a COVID-19 Response Team to help clients respond to a variety of business and legal issues they may be facing in this crisis. Please visit Holland & Knight's Response Page for the latest COVID-19 news and updates important to your business.

DISCLAIMER: Please note that the situation surrounding COVID-19 is evolving and that the subject matter discussed in these publications may change on a daily basis. Please contact your responsible Holland & Knight lawyer or the author of this alert 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.

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