The Commission agreed to continue on the standardization of the minimum wages of the three zones in one sole for the years to come.

Although the percentage for each region may serve as a general parameter for collective bargaining revisions, the evaluation of the company’s particular situation and background is highly recommended.

We will be glad to assist you in the process of determining the appropriate terms for the review of the collective bargaining agreement in your company.

1. Geographic Area A: Ciudad Juarez, Baja California, Mexico City, Sonora border, Tamaulipas border, Oil Gulf Region

2. Geographic Area B: Guadalajara Metropolitan Area, Monterrey Metropolitan Area, Sonora, Tamaulipas, Veracruz.

3. Geographic Area C: all other cities in the country.

Amendments to the Federal Labor Law, Mandatory Days Off (Article 74)

A publication has been made in the Federal Official Gazette of a decree that amends Article 74 of the Federal Labor Law which becomes effective on January 18, 2006. In accordance with the amendment, article 74 has been modified as follows:

Article 74: The following are mandatory days off:

I. January 1;

II. The first Monday of February to celebrate February 5;

III. The third Monday of March to celebrate March 21;

IV. May 1;

V. September 16;

VI. The third Monday of November to celebrate November 20;

VII. December 1 of every 6 years on inauguration of office for President;

VIII. December 25;

IX. Those dates established by the elections laws for ordinary elections.

For March 21, the amendment will be effective on 2007.

The purpose of the amendment is to improve tourism, create new jobs and increase family reunions. In addition, the benefit for some companies will be that the workweek will not be interrupted with a mid week day off.

In general terms there should not be a problem to implement the, because from a technical standpoint, February 5, March 21 and November 20 will no longer be rested on the day of their date and rest shall be taken on the Monday established in the amendment, therefore no additional days off need to be granted. The holiday must be substituted with the corresponding Monday; therefore such dates have become normal working days with ordinary payment.

In our opinion, when an individual or collective agreement has been executed whereby February 5, March 21 and November 20 have been expressly agreed as mandatory days off, it must be understood that such agreement was made in accordance with the original text of the Labor Law; therefore since this is an obligation derived from such law, it must be deemed that those agreed days off derived from the original text of the Labor Law are also modified.

On the other hand, individual or collective agreements in which coincident days off have been agreed upon whereby when the holiday was a mandatory or agreed day off, the employees enjoyed the following Monday as day off, the amendment should eliminate such coincidence and there is no obligation for the employer to grant additional days off.

In addition, it will be necessary to analyze the specific agreements executed by each company in order to determine the proper implementation of this amendment such as the payment of premiums, bonuses, among others.

Off course, shall an employee render his/her services on the new mandatory days off (in celebration of) such work must be paid at its ordinary rate, plus a double salary (triple). This payment shall not be considered as an integral part of the salary for social security purposes.

Finally, in our opinion it is advisable to review the text of individual and collective employment agreements and any other document that regulates the employment relationships in order to make them comply with this amendment.

Should you require additional information in this regard, please feel free to contact any member of Baker & McKenzie´s Foreign Trade Practice Group.
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