Mexican National Commission on Minimum Wages Approves an Increase to the 2019 Daily General Minimum Wage and Further Establishes Two Different Geographic Areas for Its Application

In December 2018, the Mexican National Commission on Minimum Wages (Comisión Nacional de los Salarios Mínimos, or CONASAMI) issued a resolution to increase the daily general minimum wage (DGMW) beginning on January 1, 2019. This resolution was published in the Official Gazette of the Federation (Diario Oficial de la Federación) on December 26, 2018. Please note that for the remainder of 2018, the DGMW will continue to be $88.36 Mexican pesos, which is approximately $4.4 United States dollars.

Prior to determining the annual increase to the 2019 DGMW for all legal effects, CONASAMI increased the 2018 DGMW by $9.43 MXP through an independent recovery amount, which made the new DGMW for 2019 rise to $97.79 MXP (approximately $4.8 USD). The global economic and political events of 2018 spurred this increase, as these events affected the exchange rate between Mexican pesos and U.S. dollars.

In addition to the increase noted above, CONASAMI approved an additional 5 percent increase, resulting in a DGMW for 2019 of $102.68 MXP (approximately $5.1 USD).

The additional 5 percent increase may serve as a general guideline for revising scaled wages in collective bargaining agreements applicable to Mexican companies; however, employers may want to analyze each particular case individually. In total, the 2019 DGMW increased by 16.21 percent from the 2018 DGMW.

CONASAMI also established a new geographic area, Free Zone of the North Border (Zona Libre de la Frontera Norte, or ZLFN) for 2019, which comprises cities along or near the U.S. border (Ensenada, Playas de Rosarito, Mexicali, Tecate, and Tijuana in the state of Baja California; San Luis Río Colorado, Puerto Peñasco, General Plutarco Elías Calles, Caborca, Altar, Sáric, Nogales, Santa Cruz, Cananea, Naco, and Agua Prieta in the state of Sonora; Janos, Ascensión, Juárez, Práxedis G. Guerrero, Guadalupe, Coyame del Sotol, Ojinaga, and Manuel Benavides in the state of Chihuahua; Ocampo, Acuña, Zaragoza, Jiménez, Piedras Negras, Nava, Guerrero, and Hidalgo in the state of Coahuila de Zaragoza; Anáhuac in the state of Nuevo León; and Nuevo Laredo, Guerrero, Mier, Miguel Alemán, Camargo, Gustavo Díaz Ordaz, Reynosa, Río Bravo, Valle Hermoso, and Matamoros in the state of Tamaulipas). For purposes of the ZLFN, the 2018 minimum wage was duplicated, resulting in a rate of $176.72 MXP (approximately $8.8 USD) for 2019.

The Mexico City office of Ogletree Deakins will continue to monitor and report on developments in the labor and employment laws of Mexico as they occur.