Minimum Wage Increase

January 12, 2014
Minimum Wage Increase

The minimum wage in Mexico has increased by 3.9 %On December 18, 2013 the National Commission on Minimum Wages (the “Commission”) approved a 3.9%increase in the minimum wage, the same which became effective on January 1, 2014. Such increase is relevant inthat employees in Mexico have a right to receive wages that are not less than the general or professionalminimum wages.The minimum wage is defined by the Mexican Federal Labor Law as the minimum amount to be received, incash, by an employee for services rendered in a work shift, the same which should be sufficient to satisfy thenormal needs of a head of household with respect to material, social and cultural matters and to provide for themandatory education of his children. They are classified as follows:(i). The general minimum wage is determined by geographic area pursuant to the cost of living in each place.Pursuant to the last adjustment, the new general minimum wage for geographic area “A” is $67.29 pesos per day(this area consists of the following areas. among others, Baja California and Southern Baja California, the FederalDistrict and its metropolitan area, Acapulco, Ciudad Juarez, Guadalajara and its suburbs, Monterrey and itsmetropolitan area, Hermosillo, Matamoros, Reynosa and Coatzacoalcos). For geographic area “B,” it is $63.77pesos per day (this area consists of the following, areas among others, Aguascalientes, Campeche, Coahuila,Colima, Chiapas, Durango, Guanajuato, Hidalgo, Michoacán, Morelos, Nayarit, Oaxaca, Puebla, Querétaro andSan Luis Potosí).(ii). The professional minimum wage is applicable to special professions, occupations or work (within one orvarious geographical areas).This increase does not mean that all wages must be increased in such proportion; rather only the wages of thoseemployees receiving minimum wages must be increased. In the case of employees who receive wages above thegeneral minimum wage, the increase is optional, and the same should be negotiated by each company and itsemployees and/or union, as applicable.It is important for employers to pay their employees the correct salaries, because if they fail to do so, theDepartment of Labor and Social Welfare, during the visits it makes to companies on a regular basis, may imposefines.

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