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Written By: Pablo Saenz

Cacheaux Cavazos & Newton

Mexico City, Mexico

Minimum Wage Increased by 3.9% in Mexico

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 in that employees in Mexico have a right to receive wages that are not less than the general or professional minimum wages.

The minimum wage is defined by the Mexican Federal Labor Law as the minimum amount to be received, in cash, by an employee for services rendered in a work shift, the same which should be sufficient to satisfy the normal needs of a head of household with respect to material, social and cultural matters and to provide for the mandatory 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 Federal District and its metropolitan area, Acapulco, Ciudad Juarez, Guadalajara and its suburbs, Monterrey and its metropolitan area, Hermosillo, Matamoros, Reynosa and Coatzacoalcos). For geographic area "B," it is $63.77 pesos 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 and San Luis Potosí).

(ii). The professional minimum wage is applicable to special professions, occupations or work (within one or various geographical areas).

This increase does not mean that all wages must be increased in such proportion; rather only the wages of those employees receiving minimum wages must be increased. In the case of employees who receive wages above the general minimum wage, the increase is optional, and the same should be negotiated by each company and its employees and/or union, as applicable.

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