1. Emergency Measures

Decrees, orders or guidelines in effect and pertaining to reopening facilities.

Technical Guidelines for Health and Safety in the Work Environment issued by the Ministry of Labour and Social Welfare (Lineamientos Técnicos de Seguridad Sanitaria en el Entorno laboral): States principles and strategies on health promotion, protection and care, which should be considered for the development of the Health and Safety Protocol.

COVID-19 Workplace Action Guide issued by the Ministry of Labour and Social Welfare (Guía de Acción para los Centros de Trabajo ante el COVID-19): Recommendations to contain the dissemination of COVID-19 in the workplace.

Optimal approach to keep track of the latest updates.

• Official Gazette of the Federation;
• Publications in the official website of the Ministry of Labour and Social Welfare;
• Publications in the official website of the Ministry of Health.

2. State Aid

Government subsidies and special relief resources allocated to support employers, and workers, in their efforts to maintain employment and pull through the crisis.

On 22 April 2020, the Internal Revenue Service issued the Miscellaneous Tax Resolution (Resolución Miscelanea Fiscal) whereby individuals were granted the right to perform the annual tax return declaration until June 2020.

The Mexican Social Security Institute also agreed to defer payments of fees with interest based on the term requested by the employer.

3. Health and Safety Measures

Requirements mandated by law or any official guidance.

• Guidance, training and organisation of employees to prevent and control the spread of coronavirus;
• Implementation of Health and Safety measures (e.g. cleaning measures, temperature monitoring and other testing, wearing masks, social distancing, etc.);
• Self-assessment of the systems provided by the government, in which the authority will be able to determine whether the company complies with sufficient elements and measures to return to their activities (gob.mx/nuevanormalidad and/or www.desi.economia.gob.mx/esenciales).

Measures typically implemented by employers and the associated legal risks, limitations, obligations and issues to consider.

• Engineering or structural measures;
• Administrative and/or organisational measures;
• Personal protection equipment;
• Training;
• Health promotion;
• Planning and management.

4. Teleworking

Policies and procedures for telework once the business reopens.

Telework remains an option; therefore, the employer has the power to implement such policies at its sole discretion, respecting labour, social security and personal data protection rights. There are a few Sections in the Federal Labour Law regarding telework, so it is important to document, in writing, the working conditions for the employee.

5. Managing COVID-19-Related Employee Issues

Management of quarantine, childcare and medical leave for employees affected by COVID-19.

Due to the suspension of activities ordered by the Federal Government, many companies in Mexico have decided to grant unpaid leave to those workers who do not want to work (even if they are considered as part of an essential activity) or for any other personal reason related to COVID-19. Mexican legislation does not contemplate childcare and medical leave for employees “affected” by COVID-19, unless the employee is infected.

Employees who fear infection and refuse to work.

Once the employer reopens facilities, the employee has the obligation to return to his/her work. If the employee refuses to work, he/she can be sanctioned according to the Internal Regulations (Reglamento Interior de Trabajo), which, to be mandatory, should be duly registered before the Labour Board. Moreover, the employer is entitled to terminate the labour relationship without responsibility, if the employee is absent more than three times / four days in a period of thirty days, without the permission of the employer or justified cause.

Disclosure of employees who are infected.

According to the Technical Guidelines for Health and Safety in the Work Environment issued by the Ministry of Labour and Social Welfare, the employer shall implement measures to ensure that employees who are infected or have symptoms, shall be located in an isolated place in order to be checked by a doctor.

The Guidelines also established that the employer shall provide mechanisms for non-discrimination, in regard to employees who are, or were, infected.

6. Cost-Reduction Strategies

To what extent can employers implement the following cost-reduction strategies as a result of COVID-19, and what are the primary limitations on each? 

• Furloughs.

The Federal Labour Law does not expressly state the grants of Furloughs (leaves). However, the employer is entitled to grant such leaves, according to its Internal Regulations (with or without payment), unless the employee is infected, in which case he/she will enjoy all the established benefits.

• Salary reductions.

The Federal Labour Law includes extensive provisions to protect employees’ rights, by expressly providing that (a) employees’ rights are not subject to waiver or demotion; and (b) when in doubt, the interpretation most favorable to the employee shall prevail.

The Federal Labour Law determines certain minimum rights that must be granted to every employee in Mexico. Notwithstanding the above, there is the possibility of executing an agreement between the employee and the employer, regarding a salary reduction, as long as it does not imply the employee will be receiving any benefit below what is established by law.

• Redundancy.

Employee termination is only possible if the employer has a justifiable cause. Termination payment is calculated depending upon the cause of termination:

• Voluntary resignation: The employer must pay all due benefits, including sales incentives, on a prorated basis up to the termination date. If the employee has at least fifteen years of seniority, he/she is also entitled to a seniority premium of twelve days of salary for each year of service, capped at twice the minimum daily salary in force.
• Termination with cause: The employer has to pay all due benefits, including commissions, on a prorated basis until the date of termination, and the seniority premium of twelve days of salary for each year of service (but with a cap at twice the minimum daily salary, under the same terms explained above).
• Termination without cause: Employees who are terminated without cause are entitled to the following lump sum severance: (i) three months of the employee’s daily aggregate salary, plus: (ii) twenty days of the employee’s daily aggregate salary for each year of service; (iii) a seniority premium of twelve days of salary for each year of service (but with a cap at twice the minimum daily salary, under the same terms explained above), and (iv) due benefits.

• Facility closure.

1. Section 434, subsection II, of the Federal Labour Law, states that in case of notorious and obvious inability to pay, the employer must request approval from the Labour Board to collectively terminate the labour relationships with the employees, and will have to initiate a procedure to obtain a resolution from the labour authority determining whether there is a collective termination corresponding to such a cause.

In the first scenario, the Labour Board will agree with the collective termination and will condemn the employer to pay the following:

• Due benefits;
• 90 days of integrated salary;
• Seniority Premium.

In the second scenario, the Labour Board will not authorise the collective termination and will condemn the employer to pay the following:

• Due benefits;
• 90 days of integrated salary;
• 20 days of integrated salary per year of service;
• Seniority Premium.

2. The closure of the workplace will entail the termination of employment relationships without constituting a justified cause for it, so the employer shall pay the compensation as provided in the Federal Labour Law, which includes: (i) constitutional compensation consisting of three months of integrated salary; (ii) 20 days of salary for each year of services provided; and (iii) the seniority premium equivalent to 12 days of salary for each year of services rendered, calculated at a maximum ceiling of twice the minimum wage, when the employee’s salary exceeds that amount.

Additionally, the employer will have to pay the severance payment, which includes the due benefits to the date of termination, such as wages, Christmas bonus, vacations, vacation premiums and any another benefit to which the employee is entitled to receive. Sometimes, to facilitate the process and obtain the consent of the employees,  companies provide an additional amount that would be paid to the employees, but takes the form of a liberality, rather than an obligation to do so.

7. Best Practices

Tips, recommendations and common pitfalls.

• Pay the respective severance payment in the case of dismissal without cause;
• Negotiate with trade unions the payment schemes, work shifts, benefits, etc.;
• Update internal policies;
• Follow the recommendations issued by the government;
• Implement Home Office schemes.