Global Compliance Desk – Mexico
Mexico’s Daily General Minimum Wage Slated to Increase Effective January 1, 2019
On 20 September 2018, Senate members unanimously ratified Convention No. 98 of the International Labor Organization (ILO), which grants the right to organize and bargain collectively, rights already adopted in the Mexican constitution.
The United States, Mexico, and Canada have signed the United States-Mexico-Canada Agreement (USMCA) on 30 November 2018. The USMCA will replace the North American Free Trade Agreement (NAFTA) that regulates North America ‘s trade. Before it can take effect, the USMCA must be ratified by legislative bodies in those governments. Chapter 23 on labor code and Annex 23-A on collective bargaining are the first to include these subjects in a major trade agreement.
A resolution decreeing an increase in the Daily General Minimum Wage (DGMW) for Mexico was issued by the Mexican National Commission on Minimum Wages (Comisión Nacional de los Salarios Mínimos or CONASAMI). In addition, CONASAMI has established a different and higher minimum wage for states and towns along the northern border of Mexico in order to promote work in these areas and to avoid the drainage of the labor pool, particularly in the United States and Canada.
CONASAMI approved a 16.2 percent increase, leaving the final DGMW of $ 102.68 MXP (approximately $ 5 USD per day) as of January 2019. In addition, CONASAMI has established a special DGMW for states and towns along the northern border of Mexico, which amounts to $ 176.72MXP.
The above increase is expected to be published in the Federation’s Official Gazette (Diario Oficial de la Federación).
The 16.2 percent increase may serve as a general guideline for the revision of higher salaries in collective bargaining agreements applicable to Mexican companies as well as for benefits increased to a minimum wage. Employers may, however, want to analyze each particular case independently.