On December 16, 2020, the National Minimum Wage Commission ("CONASAMI" for its acronym in Spanish) announced that Mexico's minimum wage would increase to $141.70 Mexican pesos per day, effective January 1, 2021. It appears the new minimum wage was determined by adding $10.46 Mexican pesos through the so-called Independent Recovery Amount (MIR) and applying a 6% percentage increase. The MIR is a fixed peso amount intended to maintain the purchasing power of the minimum wage. Therefore, the minimum wage in force for 2021 implies a global increase of 15%. Note, however, that the formal communication issued by CONASAMI does not refer to the MIR, so we will need to see how the minimum wage increase is published in the official gazette within the next couple of weeks.
The CONASAMI also agreed to increase the minimum wage for the Free Economic Zone of the Northern Border to $213.39 Mexican pesos per day, effective January 1, 2021, representing a 15% increase.
As a reminder, the municipalities included in the Free Economic Zone of the Northern Border are as follows: (i) Baja California Norte: Ensenada, Playas de Rosarito, Tijuana, Tecate and Mexicali; (ii) Sonora: San Luis Rio Colorado, Puerto Peñasco, General Plutarco Elias Calles, Caborca, Altar, Saric, Nogales, Santa Cruz, Cananea, Naco and Agua Prieta; (iii) Chihuahua: Janos, Ascension, Juarez, Praxedis G. Guerrero, Guadalupe, Coyame del Sotol, Ojinagua and Manuel Benavides; (iv) Coahuila: Ocampo, Acuña, Zaragoza, Jimenez, Piedras Negras, Nava, Guerrero and Hidalgo; (v) Nuevo Leon: Anahuac; and (vi) Tamaulipas: Nuevo Laredo, Guerrero, Mier, Miguel Aleman, Camargo, Gustavo Diaz Ordaz, Reynosa, Río Bravo, Valle Hermoso and Matamoros.
CONASAMI is comprised by representatives of (a) the government, (b) employers, and (c) employees, which meets annually on the topic of the minimum wage. The employer representatives in CONASAMI did not approve the increase, so this may be the first time the minimum wage will be increased without all three parties' consent.
Employers should review and adjust their payroll practices to comply with this new increase to the minimum wage, which may potentially also impacts benefits likes savings fund and food coupons depending on how these benefits have been agreed with employees and unions.
Originally Published by Littler Mendelson, December 2020
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