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The National Minimum Wage Commission (Conasami) has set the general daily minimum wage at MX$248.93, which amounts to about MX$7,470 (US$440) per month.
In the Northern Border Free Zone, a key economic region, the daily wage is now MX$374.89, or roughly MX$11,250 (US$662) per month. This separate region was implemented in 2019, and will maintain its separate wage rate.
This guide provides HR managers with information to adjust wage structures and manage payroll effectively.
Understanding Mexico's Minimum Wage
The latest surge in the nation’s minimum wage impacts one-third of Mexico’s registered workers, underscoring the government’s aim to improve the standard of living.
The General Minimum Wage applies to most regions of Mexico City and the rest of the country, while the Northern Border Minimum Wage addresses the higher living costs along Mexico's northern border with the United States.
The Northern Border Free Zone encompasses several municipalities across multiple states including Baja California, Sonora, Chihuahua, Coahuila, and Tamaulipas. Major cities such as Tijuana, Mexicali, and Juarez are part of this initiative.
Mexico lacks a minimum hourly wage, but averages to MX$31.12 and MX$46.86 for Mexico and the Northern Border, respectively.
The minimum wage per day guaranteed by law in Mexico was decreed to increase by approximately 20% between 2022 and 2023. The Northern Free Zone located near the northern border was the exception. (Source: Statista)
How The Minimum Wage Is Calculated
The National Minimum Wage Commission (CONASAMI) determines the minimum wage annually. The 20% increase in 2024, benefiting 6 million workers across Mexico, was achieved through consensus among employers, unions, and the federal Government. As reported by Reuters, this hike marks the sixth consecutive year of double-digit increases in the general minimum wage.
President Lopez Obrador's administration aims to tackle income inequality through such measures. The determination of minimum wage rates considers inflation, GDP growth, and employment rates, ensuring the purchasing power is doubled between 2018 and 2024.
The increase in general minimum wage for 2024 also applies to 61 trades and special jobs.
The minimum wage has seen consistent double-digit increases under AMLO's presidency, with a rise from MX$88 (US$5.20) per day in the first year to MX$248.93 (US$14.70) per day in 2024. The Northern Border Free Zone offers higher wages due to tax incentives and economic activity, including manufacturing company and export services.
Mexico City’s minimum wage rate over the past 10 years (Source: Trading Economics)
Common Challenges in Navigating Mexico’s Minimum Wage
- Keeping up with minimum wage updates and changes: The biggest challenge in navigating Mexico’s minimum wage regulations is keeping up with updates. Minimum wage rates undergo frequent changes, which can be challenging for businesses to track and implement effectively.
- Affect how businesses make decisions: Changes in the minimum wage affect business decisions like where to invest or expand.
- Following labor unions: With labor unions becoming more powerful in determining Mexico’s labor laws, businesses need to be flexible in how they hire and compensate people.
Minimum Wage Increase in 2024
Minimum Wage Increases Under AMLO since 2019
Strategies for Managing Minimum Wage Increases in Mexico
Implement Monitoring Systems
Adopt sophisticated monitoring systems to keep track of minimum wage updates.
Ensure Transparent Compensation Practices
It is important to maintain fair compensation practices across all worker categories. This helps reduce legal risks by ensuring that all employees are paid according to the updated regulations.
Engage with Stakeholders
Work closely with labor unions and government agencies. This collaboration helps to understand regulatory changes and navigate compliance more effectively.
Integrate Technology in Payroll Management
Use advanced payroll management systems to enhance the efficiency of wage management. These systems help streamline processes and reduce the administrative burden, making compliance with minimum wage laws easier.
Minimum Wage Comparison: Mexico vs. Colombia
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