10.6092/issn.1561-8048/10796
Mexico has an applicable labor law framework to epidemics as Coronavirus. However, given the labor market’s context, and the ambiguity stemming from government agreements and ordinances emitted to legally make a stand against COVID-19, the workers are being left vulnerable, regarding their employment and wages. 
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José Pablo Hernández Ramírez
Italian Labour Law e-Journal
Informal workers
COVID-19 and Labour Law: Mexico
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National Reports
2020-04-15
2020-04-14
2020-04-15
2020-09-15
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José Pablo Hernández Ramírez
2020/04/15
10.6092/issn.1561-8048/10796
National Autonomous University of Mexico (UNAM)
1561-8048
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Informal workers
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COVID-19 and Labour Law: Mexico
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COVID-19 and Labour Law: Mexico                                                 Italian Labour Law e-Journal
Alfredo Sánchez-Castañeda, José Pablo Hernández Ramírez                        Special Issue 1, Vol. 13 (2020)
asc@unam.mx                                                      Covid-19 and Labour Law. A Global Review
jppin1080@hotmail.com                                                                        ISSN 1561-8048
                                                              https://doi.org/10.6092/issn.1561-8048/10796




                   COVID-19 and Labour Law: Mexico
     Alfredo Sánchez-Castañeda, José Pablo Hernández Ramírez*

                                                   Abstract

     Mexico has an applicable labor law framework to epidemics as Coronavirus. However, given
     the labor market’s context, and the ambiguity stemming from government agreements and
     ordinances emitted to legally make a stand against COVID-19, the workers are being left
     vulnerable, regarding their employment and wages.



     Keywords: Covid-19; Labour Law; Paid leaves; Informal workers.




    Mexico’s labor market situation is an element to consider while facing Coronavirus.
 Mexican labor legislation contemplates causes for suspending labor relations in case of
 infectious illnesses. Also, the Federal Government has emitted a series of agreements and
 ordinances to confront Coronavirus. Nevertheless, the lack of concrete action from the
 Federal Government and the ambiguity of their actions causes non-optimal results.


 1. Employment facing COVID-19

     Mexico’s labor market is characterized by two elements. On one side, most of the
 country’s enterprises are small businesses, and on the other, there is a high rate of labor
 informality. In the country, 95.4% of businesses are “micro-businesses” and 3.6% are small
 enterprises. Regarding informality, 57% of workers find themselves in the informal
 economy, which impedes them from accessing social security schemes. Added to this, there
 is no unemployment insurance in Mexico.
     Services and manufacturing of goods are being affected. In the country, the automotive
 plants have temporarily shut down1 and the manufacturing default rate has risen to 31%2.

 *
   Alfredo Sánchez-Castañeda, Researcher in labour law at National Autonomous University of Mexico
 (UNAM); José Pablo Hernández Ramírez, Licensed lawyer attached to the Faculty of Law at UNAM.
 1-https://www.eleconomista.com.mx/empresas/Paran-10-de-las-12-plantas-automotrices-en-el-pais-

 20200323-0011.html
 2-https://www.eleconomista.com.mx/empresas/Covid-19-propicia-31.4-de-incumplimientos-en-

 manufacturas-Index-20200323-0076.html
 Alfredo Sánchez-Castañeda                                                    Italian Labour Law e-Journal
 José Pablo Hernández Ramírez                                                Special Issue 1, Vol. 13 (2020)
                                                                Covid-19 and Labour Law. A Global Review
                                                                                  Section: National Reports




Tourism practically is closed. Numerous employers have fired their workers, meanwhile
others have extended a resting period without pay, or working with reduced wages3.
   Workers that remain laboring: practically people working in delivery, garbage
recollection, messengers, convenience stores and supermarket; and also all the labor force
working in health services; do so with a high risk and currently there are no labor
inspections from labor authorities to protect their health within work.


2. Legal framework for sanitary contingencies

    The Federal Labor Law (LFT) regulates the suspension of individual and collective
labor relations. First, it is possible to suspend the labor relation, according to Article 42 of
the LFT, without the workers’ obligation to attend to work and the employer’s obligation
to pay wages, whenever the worker suffers from a contagious illness that did not stem from
a work accident or illness. In this case, the worker, if he is in the formal sector, can access
to paid sick leave from the Mexican Social Security Institute (IMSS). Paid sick leave can
reach up to 78 weeks, and during this time, the worker will receive 60% of the wage
registered by his/her employer. In COVID-19 cases, IMSS is issuing paid sick leaves
online.
    The second cause for suspension, related to a contagious illness was introduced to the
LFT in 2009, in response to the AH1H1 pandemic. Article 42 Bis was introduced, which is
relative to the declaration of sanitary contingency. When a sanitary contingency is emitted
by the proper authorities, the employer does not require the Court’s authorization to
suspend labor relations and is obligated to pay workers 1 minimum wage per day, for each
day the suspension lasts, for up to a month. In Mexico, the current minimum wage is 3,966
pesos (around 150 euros).
    In Mexico, the number of workers that earn a minimum wage is one fifth of the
occupied population. Most people earn 2.5 minimum wages. In that sense, guaranteeing a
minimum wage is not enough. Also, small businesses will have a hard time to be able to
pay their workers a minimum wage in case of a sanitary contingency. This is the case for
the formal sector, the remaining 57% of the working population cannot access this labor
benefit.
    In March, we must highlight, that the Ministry of Labor has issued the Action Guide for
Work Centers in the face of COVID-194. Even when risky occupations are identified by this
guide, up to date there are no labor inspections made by the Ministry of Labor to verify if
workers who are at risk are adequately protected.
    In the same month, the Ministry of Health emitted the Agreement which states preventive
measures to alleviate and control COVID-19’s risks for health, the Ordinance which states preventive

3-Grupo   Alsea’s case: (https://www.eleconomista.com.mx/empresas/Decision-de-Alsea-puede-considerarse-
-despido-injustificado-por-ser-decision-unilateral-expertos--20200320-0085.html and Cancun’s tourism
industry:-(https://www.eleconomista.com.mx/estados/En-Cancun-30-de-los-trabajadores-fue-despedido-
CROC-20200326-0132.html).
4 https://www.gob.mx/stps/documentos/guia-de-accion-para-los-centros-de-trabajo-ante-el-covid-19.



https://doi.org/10.6092/issn.1561-8048/10796                                                               2
 Alfredo Sánchez-Castañeda                                               Italian Labour Law e-Journal
 José Pablo Hernández Ramírez                                           Special Issue 1, Vol. 13 (2020)
                                                           Covid-19 and Labour Law. A Global Review
                                                                             Section: National Reports




measures to alleviate and control COVID-19’s risks for health and a Presidential Ordinance. The
agreement states that both the public and private sectors must grant paid leaves to the
elderly in the country, and workers with vulnerable health conditions. This ordinance
obliges employers to keep these people’s jobs and pay them full wages5.
    The Agreement details that in the private sector all those who result necessary to face
the contingency will continue working, especially health workers, and those workers in
finance, telecommunications, media, hotels and restaurants, petrol stations, markets,
supermarkets, convenience stores, transportation and gas distribution.
    The agreement emitted on March 30th, 2020, which declares a sanitary emergency
because of force majeure relating to COVID-19, should also be emphasized. This agreement
is not legally founded on the LFT, but it implicitly pursues not suspending the labor
relation and for the workers to keep receiving full payments for the time this emergency
lasts. However, it creates the possibility for the employer to suspend labor relations or to
terminate them, because of force majeure; a situation that would not benefit the workers. In
this case, the Court, when sanctioning the suspension, must set the compensation to be
paid to the workers, considering, among other factors, the possible time for suspension of
labor and the possibility of finding new occupations, without exceeding one month’s salary.
If a labor relation ends because of force majeure, workers have the right to a 3 months wage
compensation and to be receive their seniority premium.


3. Labor risk situations in front of COVID-19

   All in all, there is a legal framework for labor matters regarding labor suspension
because of contagious illnesses or a sanitary contingency. Also, various agreements and
ordinances have been emitted to try to combat Coronavirus. Nevertheless:
    A) There has not yet been a social dialogue between the different social actors or
        tripartite national meetings between employers, workers and the government.
    B) There have been economic impacts to the production of goods and provision of
        services. It is calculated that the country will negatively grow from 1 to 6% of the
        national GDP.
    C) Today, there are no restrictions to the freedom of transit, which results in not all
        the population respecting the sanitary emergency.
    D) At a national level, only a sanitary emergency has been emitted, establishing
        measures for protecting health and the obligation to stop all non-essential
        production of goods and provision of services, pointing out that workers, even if
        they are not working, must keep receiving their salaries.
    E) A sanitary contingency, as the LFT defines, has not been announced. A reasonable
        explanation is that, if this were to be done, workers in Mexico would only have had
        one month of minimum wage guaranteed. Even so, the lack of a sanitary
        contingency declaration has reflected on labor relation terminations, diminution of
5 Agreement:https://www.dof.gob.mx/nota_detalle.php?codigo=5590339&fecha=24/03/2020.
Ordinance: https://www.dof.gob.mx/nota_detalle.php?codigo=5590339&fecha=24/03/2020

https://doi.org/10.6092/issn.1561-8048/10796                                                          3
 Alfredo Sánchez-Castañeda                                              Italian Labour Law e-Journal
 José Pablo Hernández Ramírez                                          Special Issue 1, Vol. 13 (2020)
                                                          Covid-19 and Labour Law. A Global Review
                                                                            Section: National Reports




       workers’ salaries and even the suspension of labor relations without any pay. The
       Federal Government believes the false idea that if they do not declare a sanitary
       contingency, employers will keep paying their workers. Empirical evidence suggests
       otherwise.
    F) Since Mexico does not have an unemployment insurance, in these cases, workers
       can only withdraw money from their retirement fund, which is a solution for a
       short period of time but a problem in the long run, since they will have to work
       more time in order to reach a pension.
    G) Informal subordinate workers, informal independent workers or informal
       employers do not count with any type of support to alleviate their lack of income.
       Because of this, many of them keep working, even when deemed non-essential. For
       them, stopping work is not an option, because they completely stop receiving their
       incomes.
    H) Also, the Ministry of Labor, federally and locally, through their labor inspection, are
       not supervising that the workers who do have to keep laboring, do so protecting
       their health and safety at work.




Copyright © 2020 Alfredo Sánchez-Castañeda, José Pablo Hernández Ramírez. This article
is released under a Creative Commons Attribution 4.0 International License.




https://doi.org/10.6092/issn.1561-8048/10796                                                         4
