Chihuahua, Chih., 15th October, 2019.
Dear Clients and Friends,
The Senate’s Commission of Labor and Social Welfare approved the proposal for an amendment regarding the payment of lost wages, submitted by Napoleon Gómez Urrutia, member of the MORENA Party, whose proposal is to increase the period of time and the percentage that the employer shall pay lost wages, if he loses the trial against an employee.
The proposal, approved by the Senators, the vote of the full Senate and Congressman is pending, amends article 48 of the Federal Labor Law duplicating the amount that the employer will have to pay. Pursuant the amendment, the lost wages of the first two years will be paid 100%, and starting the third year, 4% of the integrated wage of a 15-month period shall be paid. “The current payable amount of lost wages will be doubled, which will encourage the trials to be last longer, than the current labor trials.”
The aforementioned will greatly affect the main employers in the Country; the micro, small, and medium business, “having to confront a 2 or 3-year trial, due to the Conciliation and Arbitration Boards’ work load and lack of resources, putting in risk the employer’s resources and of the family’s that choose to start a small business, due to the lack of limitation in the accumulation of lost wages”.
In the 2012 Federal Labor Law amendment, the law established a 12-month limit to the accumulation of lost wages, where during the first year 100% of the lost wages shall be paid, and starting the second year a 2% of the integrated wage of a 15-month period would be payable; in simpler words, a third part of the employee’s wage would be payable, without a time limitation for the duration of the trial.
Unfortunately, these kinds of measures specially affect the micro, small, medium business; which as a result will encourage the creation of non-formal businesses, and their employees will not be granted any benefits and will be excluded of social security.”
Certain studies from the World Bank, sustain that a flexible labor legislation promotes the creation of formal employment and rigid legislations promote informal employment, “unfortunately, the latter is the alternative that the Senate’s Commission of Labor and Social Welfare is taking”.
