News

Legal Provisions due to COVID-19 Health Contingency

Given the current circumstances worldwide, but specially in Mexico and its imminent declaration of health contingency, we inform you about the main legal provisions derived from this contingency and which establish, in their pertinent parts, the following:

New Value of the Unit of Measurement and Update (UMA) effective February 1st, 2020

Pursuant to what is set forth in the Law to Determine the Value of the Unit of Measurement and Update (UMA, for its Spanish acronym), the National Institute of Statistics and Geography informed, through its Press Release No. 008/20, dated on January 9th, 2020, the daily, monthly, and annual values for the Unit of Measurement and Update which took effect on February 1st, 2020.

Such values are as follows:

• Daily: $86.88 MXN
• Monthly: $2,641.15 MXN
• Annual: $31,693.80 MXN

For reference purposes, the percentage increase of the UMA’s values regarding 2019 was of 2.83%, corresponding to the year-over-year percentage growth of December of the year preceding in the National Consumer Price Index from December 2019.

This increase is lower than the one authorized for the General Minimum Wage (SMG, for its Spanish acronym) for the North Border Free Zone this year, which raised from $176.22 MXM a day in 2019, to $182.56 MXN a day in 2020. For the rest of the country, this general minimum wage will raise from $102.68 MXN to $123.22 MXN per working day, a relative increase by 20%.

It is worth mentioning that, according the Constitution, every mention to the minimum wage as unit of account, index, basis, measure, or reference to determine the amount of the obligations and assumptions foreseen in the federal, state, and Mexico City laws, will refer to the aforementioned Unit of Measurement and Update.

Likewise, on February 2017, the IMSS established that, as provided in article 28 of the Social Security Law, the workers insured will enroll with their base contribution salary (SBC, for its Spanish acronym) paid at the time of their enrollment; while the maximum upper limit is up to 25 times the daily value of the UMA, and the lower limit, the general minimum wage.

Likewise, on February 2017, the IMSS established that, as provided in article 28 of the Social Security Law, the workers insured will enroll with their base contribution salary (SBC, for its Spanish acronym) paid at the time of their enrollment; while the maximum upper limit is up to 25 times the daily value of the UMA, and the lower limit, the general minimum wage.

As for the minimum base contribution, and effective January 1st, 2020, it is of $182.56 per day for the municipalities within the North Border Free Zone; and of $123.22 for the rest of the municipalities and the territorial units (mayoralties) of Mexico City, according to the resolution of the Council of Representatives of the National Minimum Wage Commission, taken on December 17th, 2018, and published on the Official Journal of the Federation on December 26th, 2020.

It is worth noting that nearly four years after the creation of the UMA, the IMSS has not given the appropriate dissemination to the guidelines for implementing the UMA as a replacement of the minimum wage in other provisions under the Social Security Law such as: contribution limits for Illness and Maternity Insurance; limits for fees charged to the State for Retirement Insurance; old-age retirement; pension amount guaranteed by insurance; limits on withdrawal rates for Individual Unemployment Insurance Accounts; limits on marriage and funeral grants; and limits on penalties for breaching the obligations stated by the Law, among others.

In the light of the need to better disseminate these administrative guidelines, we reaffirm our conviction that such guidelines to replace the minimum wage with the UMA as reference, shall be considered – through the proceeding legal reforms – within the Social Security Law, to give legal certainty to every obligated party.

Implementation of the Reform to the Labor Justice System

Coordination Council for the implementation of the Labor Justice System

Installed on May 31st, 2019

SEVENTEENTH TRANSITORY ARTICLE:

“The Council […] shall serve as a national consultative, planning, and coordination organ to establish a national policy and coordinate the implementation, at local and federal level, of the Labor Justice System […]”