Reform to the Federal Labor Law on the minimum wage

The Executive Order for the Reform of Article 90 of the Federal Labor Law was published in the Official Gazette of the Federation on March 30 of this year; it involves the amendment of Paragraphs One, Two and Three in the sense of respecting gender equality; moreover, a fourth paragraph was added ordering that the revision of minimum wages shall never be below the inflation recorded for the elapsed period of its validity and, thus, they will now read as follows:

“Article 90.- The minimum wage is the lowest amount to be paid in cash to an employee for services rendered in a working day.

The minimum wage must be sufficient to cover the normal needs of a head of a family in the material, social and cultural aspects and to provide compulsory education for his or her children.

The establishment of institutions and measures that protect the purchasing power of the salary and facilitate access of all workers to the obtainment of basic commodities is considered to be socially beneficial.

The annual definition of the minimum wages, or the revision thereof, will never be below the inflation recorded for the elapsed period of its validity.

As can be seen, the substantive part of the reform is aimed at respecting gender equality, for one part, and, for the other, to guarantee that, in the setting of the minimum wage or in its revision, the minimum wage will never lag behind the inflation of the previous term, which could generate very important increases to contractual salaries, considering that the increase to the minimum wage is a reference point for salary increases in general terms.