On December 16, 2019, the Mexican National Commission on Minimum Wages (Comisión Nacional de los Salarios Mínimos or CONASAMI) issued a resolution decreeing an increase in the Daily General Minimum Wage (DGMW) applicable in Mexico in 2020. The DGMW will continue to be $102.68 Mexican pesos (MXP) (approximately $5.37 United States dollars (USD)) in most of Mexico and $176.72 MXP (approximately $9.30 USD) in the Free Zone of the North Border (Zona Libre de la Frontera Norte or ZLFN) until December 31, 2019.

Prior to determining the annual increase to the 2020 DGMW, the CONASAMI decided to increase the current DGMW by $14.67 MXP as an “independent recovery amount,” resulting in a 2020 DGMW of $117.35 MXP (approximately $6.17 USD). The reason behind this recovery increase is to adjust for 2019 global economic and political events, which affected the currency exchange rate between Mexican pesos and U.S. dollars.

The CONASAMI approved a 5 percent increase to the DGMW on top of the aforementioned independent recovery increase, leaving a final DGMW for 2020 of $123.22 MXP (approximately $6.40 USD). In combination, the independent recovery amount and the 5 percent increase represent a 20 percent increase in the DGMW.

The CONASAMI also increased the DGMW rate for the ZLFN. In the ZLFN, there will be a 5 percent increase to the 2019 rate of $176.72 MXP (approximately $9.30 USD), resulting in a rate of $185.56 MXP (approximately $9.70 USD) for 2020.

The aforementioned increases are awaiting publication in the Official Gazette of the Federation (Diario Oficial de la Federación).

The five 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.

The Mexico City office of Ogletree Deakins will continue to monitor and report on labor and employment law developments in Mexico.