December 21, 2020

Mexico Will Increase General Minimum Wage by 15 Percent in 2021

Holland & Knight Alert
Leslie Palma

Highlights

  • Mexico's National Minimum Wage Commission announced its decision to increase the general minimum daily wage to $141.70 Mexican pesos (approximately US$7.10) in 2021.
  • The 15 percent increase is intended to recover purchasing power in Mexico and meet international expectations.
  • The minimum daily wage for the northern border was increased to $213.39 pesos.
  • Two professions will be added to the list of minimum wage jobs: domestic workers with a minimum daily wage of $154.03 pesos, and agricultural workers with a daily wage of $160.19 pesos.

The minimum wage of $123.22 established for the year 2020 was increased according to the inflation rate of six percent and an independent recovery amount (Monto Independiente de Recuperación or MIR) of $10.46 pesos.

Mexico's National Minimum Wage Commission (la Comisión Nacional de Salarios Mínimos or CONASAMI) established this increase in addition to the 16 percent increase granted in 2019 and the 20 percent increase in 2020 to recover the purchasing power, and once again used the MIR factor, which was used for the first time in December 2016. The MIR factor's purpose is to recover the purchasing power of workers who receive a general minimum wage in order to reach, and even exceed, the welfare line suggested by the National Council for the Evaluation of Social Development Policy (Consejo Nacional de Evaluación de la Política de Desarrollo Social or CONEVAL).

The World Trade Organization's discussion on the relationship between "trade and work" achieved significant advances in free trade agreements, as can be seen in the labor chapter of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which establishes express obligations regarding minimum wages with a reference of its own, without referring exclusively to international commitments under the International Labor Organization (ILO): "Each Party shall adopt and maintain laws and regulations, and practices that derived from these, that regulate acceptable working conditions regarding labor minimum wages, working hours, and safety and health standards."

The United States-Mexico-Canada Agreement (USMCA) also highlighted that the minimum wage was one of the issues that most required discussion, since it was undoubtedly one of the major concerns set forth in the labor standards that the USMCA intended to increase in Mexico.

Holland & Knight's labor and international trade attorneys in our Mexico City office will continue to monitor relevant aspects derived from national and international commitments and/or negotiations to alert their clients of possible consequences or obligations that must be fulfilled in Mexico.

For further information or questions on how minimum wage increase may affect your business, please contact the author.


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, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.


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