Mexican Christmas Salary Benefit Must Reflect 2020 Wage Increase
Tara A. Spears
On January 1, 2020 the Mexican minimum wage increase went into effect. The current non-domestic salary is $123.22 pesos nationally and 185.56 pesos at the northern border. The national increase of 20% includes a 5% increase in real wages. The minimum wage is the minimum economic remuneration that a person must receive for performing a job on a full working day, which in Mexico is eight hours.
This Mexican federal government- the Council of Representatives of the National Commission on Minimum Wages (Conasami)- resolved increases to general minimum wages (GMS) 20% wage increase last November, 2019. The group used the current minimum wage (GSP) 102.68 pesos per day, plus the sum of 14.67 pesos, that is described as the Independent Recovery Amount (MIR) and a five percent inflationary factor. The goal of the MIR is to enhance the purchasing power of workers. The MIR goes only to those people who solely receive minimum wage.
The national minimum wage increased from 102.68 pesos per day to 123.22 pesos. This will mean that monthly workers would have to receive at least 3,746 pesos per month. The federal increase does not apply to domestic workers or agricultural day laborers.
It is believed that the President Andrés Manuel López Obrador is fulfilling his campaign promise to “implement a gradual and responsible process of recovering the purchasing power of workers and their families, while energizing the domestic market.” The Mexican Secretary of Labor and Social Security stated that “this is the largest annual increase recorded in the last 44 years….3.44 million workers will benefit from the new minimum wage” according to El Economista. This is the third consecutive year of double-digit increases aimed at restoring the purchasing power of the country’s lowest earners.
With 2020 being an economically disastrous year, this December it’s even more important to pay the end of the year employee benefit to your personal employees on time. It’s not gift; the aguinaldo is a legally mandated part of their yearly salary. Mexican Labor law states that the Christmas bonus must be equivalent to at least 15 days wages in addition to the normal salary.
There are many formulas available on the government website and Spanish articles. Here is a simple method: The Federal Labor Attorney’s Office (Profedet) says the first thing to do is to calculate your daily salary. You must divide your monthly salary by 30, that is, the days of the month. Once you have the daily amount, you must multiply it by 15. But since my employees don’t work full days, I just pay half of their part-time monthly salary the first week in December in addition to that week’s salary. The law specifies paying the aguinaldo by December 15.
This ‘extra salary’ applies to all employees including part-time workers in your home such as maids, gardeners, cooks. Paying the Aguinaldo also creates and keeps a positive relationship with your
employees. Depending on how personal your relationship is with your part-time employees, giving the cash in an envelope with a note thanking the worker for their help/service during the past year and wishing them a Feliz Navidad is a nice way to handle the situation.
Article 87 of the Federal Labor Law (LFT) states that “The employer is obliged to keep receipts for payment of the aguinaldo” so be sure to have the employee sign a receipt for the cash bonus. If you try to skip the payment, you-the employer- can be taken to Mexican court and fined up to 315% of what the aguinaldo payment should have been. Please, just pay the bonus.
Since the very affordable domestic help makes our time in Mexico so comfortable, paying the extra Christmas salary is a simple way to show your appreciation and enhance the holidays for local families. Let’s end the year on a happy note!
