Employment Practice Group I December 6, 2023

Minimum Wage Increase for 2024

On December 01, 2023, the National Minimum Wage Commission (“CONASAMI” for its acronym in Spanish) agreed to increase the general minimum wage effective January 01, 2024.

The increase in the minimum wage will be as follows:

• In the Free Economic Trade Zone of the Northern Border, a percentage increase of 6% will be applied, plus an increase of $41.26 Pesos corresponding to the Independent Recovery Amount (“MIR” for its acronym in Spanish), raising the minimum wage from $312.41 Pesos to $374.89 Pesos per day.

• In the other parts of Mexico, a 6% percentage adjustment will be made, plus an increase of $27.40 Pesos corresponding to the MIR, raising the general minimum salary from $207.44 Pesos to $248.93 Pesos M.N. per day.

This represents an overall increase of 20% to the minimum wage in both zones, effective January 01, 2024.

Professional minimum wages will also receive a 20% increase.

The MIR, which was applied for the first time in the adjustment of minimum wages in 2017, is a mechanism intended solely for the recovery of the purchasing power of minimum wages and is an amount in pesos, which should not be used as a reference to adjust other wages in force such as contractual, federal, state, or municipal wages.

Employers should review and adjust their payroll practices to comply with the recent increase in the minimum wage. This adjustment might also impact other benefits such as the savings funds and meal coupons, contingent on the terms agreed upon with employees and unions.

Likewise, this increase will have an economic impact on the calculation of the personal Income Tax which employers withhold to employees, as well as in dues to be paid to the Social Security Institute which employers must take into consideration in the operational budget for fiscal year 2024.