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Minimum Wages in Mexico - Frequently Asked Questions - January 1, 2014 to December 31, 2014

Frequently Asked Questions
Is there a separate legislation relating to minimum wages in Mexico? What is the national poverty line? (In national currency) 
Do one or more minimum wages exist that is/are determined by law?  How often is poverty line updated?
At what level are minimum wages determined?  What is the percentage of minimum wage relative to the current poverty line?
On what basis is minimum wage calculated?  What is the incidence of minimum wages(s) in the national labour force (wage earners only)?
In case of weekly/monthly minimum age, are they based on any fixed number of hours?  How is minimum wage compliance regulated? 
Are governmental bodies, employer and/or trade union representatives involved in minimum wages setting?  Which legal sanctions can be applied in compliance is lacking?   
How are upratings (adjustments) of minimum wages decided upon?  Are sanctions often being applied? 
Which are the components of minimum wage in Mexico?  Are employer and/or trade union representatives involved in compliance procedures? 
How frequently is the fixed component of minimum wages updated?  To whom/Where can individuals complain, if they think they are earning less than minimum wage?
What is/are the yardstick/s on which minimum wage upratings are based?

 

Frequently Asked Questions Minimum wages implemented as per law  Minimum wages implemented in reality 
 Is there a separate legislation relating to minimum wages in Mexico? There is no separate legislation on minimum wages in Mexico. However, in the Political Constitution of Mexico, Article 123 Section VI, has provision for  legal general minimum wages. It is mainly the Federal Labour Law that regulates legal minimum wages in Mexico. Articles 90-97 of the Labour Law explain the major provisions on minimum wages.  Mexico's minimum wage is 60.75 pesos per day, equivalent to 4.7 dollars, which is insufficient to meet the needs of a family as established by the Constitution of Mexico. Constitution in Mexico, states that the National Minimum Wage Commission, composed of employers, workers and government, are responsible for setting the minimum wage every year. 
Do one or more minimum wages exist that is/are determined by law?  Mexico has more than one minimum wage rates. The Mexican government determines legal minimum wage rates for different regions and professions.  National Minimum Wage Commission,  fixes 70 professional minimum wage rates. But professional minimum wages are also very low and their purchasing power has also been reduced. The fall is in various proportions, but around 60 percent in its best.
At what level are minimum wages determined?  Mexican Law, as per Article 123 of the Political Constitution of Mexico and Article 91 and 93 of the Federal Labour Law implies that general minimum wages shall be applied to all professions and special work in different economic activities, occupations, or geographical areas. At regional level, the general minimum wages set by economic area are as following, area "A " of 59.82 pesos per day for the area "B" 58.13 and Zone "C" 56.70. At sectoral level wages are set through wage negotiations. Professional salaries are applied nationally in the same 3 geographical zones, the lowest amount per day is 79.13 pesos and the highest of 179 pesos a day. There are contractual wages, wages that are agreed between the unions with employers, with reference to the legal minimum wages. Contractual wages are higher and differ from one sector of the economy to another, depending not only on the importance of business but also on the strength of association to agree to pay a little higher, anyway they are restricted by  minimum wage.
 On what basis is minimum wage calculated?  According to the Federal Labour Law Article 83, the salary may be fixed per unit time, per unit of work, commission, lump sum or otherwise. However, legal minimum wages in Mexico are declared on daily basis. (refer to Media Bulletin Dt. 18 Dec 2010) In the workplace many Mexican workers work more than 8 hours a day and the pay is below the minimum wage and they are also not rewarded with overtime pay. The weekly payment is common in construction and in some peasants cases. So, daily minimum wage is there used to calculate weekly payment. Mexican workers with social security and job security have a fortnightly payment scheme, they are employees of banks, insurance, education, government, health, among others. In such cases daily minimum wage is used to calculate fortnight payment.
 In case of weekly/monthly minimum age, are they based on any fixed number of hours?  Working federal law under Article 90 says that the minimum wage is the lowest amount to be paid in cash for services rendered in a working day and Article 61 defines the maximum duration of the day is: eight hours the day, seven the night and seven thirty when mixed. Also as per article 85 of the Labour Law, salary paid to a worker (not less than minimum wage) should be based on a normal work day of 8 hrs or 7.5 night hrs. Collective Contract workers have defined a working day of 8 hours a day, fortnightly payment and is expressed as monthly salary.
 Are governmental bodies, employer and/or trade union representatives involved in minimum wages setting?  The third paragraph of section VI of Article 123 of the Constitution of Mexico and Article 94 of the Federal Labour Law, states that "Minimum wages are fixed by a National Commission composed of representatives of workers, employers and government." Also as per Article 94 of the Federal Labor Law the National Commission for fixing minimum wages, may draw the special advisory committees as it deems necessary for the performance of its functions. Employer organisation namely COPARMEX and Trade Union namely CTM and CROC are also involved in setting wages Commission includes a representatives of the federal government. The employers' representation corresponds to the Mexican business associations. Unfortunately, the representation of workers, lies in official trade unions and these official union representatives ignore the views of independent unions in Mexico
How are upratings (adjustments) of minimum wages decided upon?  Section VI of Article 123 of the Constitution states that "Minimum wages are fixed by a national commission composed of representatives of workers, employers and government." and shall assist salary surveys. Federal Labour Law, under Title III, chapter VI specifies the complete procedure involved in revision of minimum wages.  The National Commission on Minimum Wages defines the minimum and professional wages, but it happens that this committee only makes official what the government defines with the representation of employers and official unions validates this decision. Is a commission that does not deny and only serves to validate poverty wages in Mexico.
Which are the components of minimum wage in Mexico?  Legal minimum wage, as declared by the Mexican government is a single rate fixed component. The minimum wage, is a single rate component and  its calculation does not consider payments for productivity or some other concept to increase it.
How frequently is the fixed component of minimum wages updated?  Federal Labour Law does not clearly define any specific interval for revision of minimum wage rates. As per article 570 of the Federal labour Law, minimum wages should be set each year but may be reviewed ant time depending in the economic circumstances. Since 1976 the minimum wage is set each year, but since they can be revised and modified at any time provided that the economic situation warrants, in november 2012 there were a change where the geographical zones B and C were integrated in only one
What is/are the yardstick/s on which minimum wage upratings are based? According to the Political Constitution of Mexico article 123; and article 90 of the Federal Labour Code, the minimum wage must be sufficient to meet the normal requirements of a householder in the material, social and cultural development and to provide basic education to children. As per article 561(III) and 562, minimum wage rate also depends upon changes in cost of living per family and labour market conditions and payment structure. Even after considering the General Conditions of the Economy, Trade, Energy Policy, Global Financial Crisis, International Economy, Outlook for 2010, Employment, Wages, Labor Negotiations; Evolution of Prices for determining the minimum wage, it is not logical why there have been increases below inflation.
What is the national poverty line? (In national currency)  The National Council for Evaluation of Social Development Policy (CONEVAL) uses two lines to measure income poverty line being at least equivalent to the value of the food basket per person per month, and the line of wellness is the total value of the food basket and the basket is not food per person per month. Thus, the monthly per capita welfare line (food basket more non-food basket) is $ 2,366.56 for urban areas and $ 1,721.86 for rural According to CONEVAL, a person is in poverty if you have at least one social deprivation (in the six indicators of educational backwardness, access to health services, access to social security, and quality living spaces, basic services housing and access to food) and your income is insufficient to buy the goods and services required to meet their food and non-food.
How often is poverty line updated? By law the National Evaluation of Social Development Policy (CONEVAL) is a public agency of the Federal Civil Service, with administrative and technical capacity to generate objective information on the status of social policy and poverty measurement in Mexico  
What is the percentage of minimum wage relative to the current poverty line? It would take 1.29 times the minimum wage to reach the welfare line in urban areas and 0.9 times in rural areas CONEVAL, October 2012
What is the incidence of minimum wages(s) in the national labour force (wage earners only)? In Mexico, according to official data from the National Employment Survey 2010, more than 16 million Mexican workers receive between 1 to 2 minimum wage and 3 million workers are not paid for their work.  
How is minimum wage compliance regulated?  As per Title eleven, chapter X to XIII, of the Federal Labour Law, it is the duty of the Labour Inspector to monitor the compliance with labour standards. According to the Federal Labour Act it is the prerogative of the Ministry of Labour and Federal and local Boards of Conciliation and Arbitration, who have to protect the labor law enforcement. In reality, many Mexican workers are not paid even a minimum wage for their work. The law is violated in Mexican companies.
Which legal sanctions can be applied in compliance is lacking?    Article 1004 of the Labour Law states provision for fines and imprisonment in case of violation of wage rates, depending upon the amount of omission.  
Are sanctions often being applied?    Very few cases are sanctioned because many workers prefer not to report, the government lacks the capacity to visit and check all companies and it is very common to reach agreement among those involved when there is any complain.
Are employer and/or trade union representatives involved in compliance procedures?  The conciliation and arbitration boards are responsible for assisting the negotiation between workers and employers when there is any disagreement.  
To whom/Where can individuals complain, if they think they are earning less than minimum wage? As per article 540 (II) of the Federal Labour Law, it is the duty of labour inspector to inform the authorities about the violations of labour standards.  According to the federal labour law it is the duty of Federal Board of Conciliation and Arbitration or Local Boards or Special Boards or Federal Labour Defense to resolve labour disputes. Besides there also exist a Joint National Committee for the protection of minimum wages, whose responsible for monitoring and proper enforcement of regulations and programs that protect the wages. There also exist Federal Labor Defense (PROFEDET) which is a decentralized body of the Ministry of Labour and Social Welfare (STPS), which has the mission to advise and, if necessary, represent you free of charge at trial, and proposing solutions to workers and employers through conciliation.   
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