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Changing a Salary in Mexico

​Basic resource relating to changing a salary or pay in Mexico.
We are not a law firm. Do not consider our information as legal advice. This information has been summarized based on our legal inquiries. Information can become obsolete from one day to another due to changes in laws, regulations, or government procedures. Consult labor and tax attorneys for legal advice. (Note from HR Mexico staff)

Can I Change a Salary in Mexico?
(2019 Minimum Wage is $102.68 MXN daily and $176.72 MXN daily in border region)

Question:

We have an employee that initially had been granted his salary plus commissions since Sep 2013. Now that he has more experience in sales, the client now wants to decrease his salary and offer him higher commissions.  We know that the labor law prohibits the salary decrease of an employee, but is there a legal basis to justify this change?
Answer:

Article 51 sub-clause IV of the Federal Labor Statute (FLS) prohibits a salary reduction by the employer. However, this provision refers to a salary reduction as a unilateral act by the employer, meaning without the employee’s consent. Since the employment contract is a bilateral agreement, as a matter of principle it can be modified with the express consent by both parties (employee and employer), always in compliance with the mandatory provisions by the Federal Labor Statute.

Hence, if the employee expressly consents to the modification of his/her salary, and the new salary complies with all provisions of the law (it is remunerating, above the professional minimum salary, not subject to illegal deductions, no force was applied by the employer), it is permitted to modify the salary, even if this means a salary reduction. However, the employee may not waive his/her right to the payment of salary accrued for past services (art. 5 FLS).

It is very important that the employee declares his/her consent in writing and in the presence of two witnesses.

Question:

If an employer has a financial hardship and they do not want to terminate the employee outright. Can they change the employee from salary to 100% commission based? Is this possible? The employee currently has a permanent contract.
​

Answer:
Pursuant to articles 285 and 286 of the Federal Labor Statute (FLS), it is possible that the salary of commercial agents, insurance agents, sales persons, or similar consists entirely of a premium on the value of the sold merchandise. However, if the employee has already an employment contract with a fixed salary, the employee’s written consent is necessary to change the fixed salary into a commission based salary. Otherwise, the employee may sue for termination of the employment contract based on a unilateral reduction of his/her salary by the employer pursuant to article 51 IV FLS. In this event, the employer would have to pay severance as if the employee had been wrongfully terminated (art. 52 FLS).
Thus, it is important to have the employee sign a written amendment to the existing employment contract changing the fixed salary to a commission based salary. I also recommend that the employee should be paid at least a statutory minimum salary applicable to the position.

In all circumstances, the employer will need to make the salary / pay change with IMSS (The Social Security in Mexico.) Employer taxes are based on the employee pay / salary.
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  • Home
  • About Us
    • Our Company
    • Testimonials for Human Resources Mexico
  • Mexico PEO Service
    • Mexico PEO Service
    • Additional Employee Perks
    • Recruitment in Mexico
    • Setup Company in Mexico
    • Pay Employee in Mexico?
  • Online Requests
    • General Request
    • Request PEO Proposal
    • Request Recruitment Services
  • Resources
    • Latest Video Topics >
      • Information VIdeos
      • Client Videos
    • Global PEO / International PEO >
      • 3 Things to Know Before Hiring a Global PEO
      • How to Hire a Global PEO / Employer of Record
      • Get to Know Your Global PEO / International PEO
      • Global PEO: Fast & Loose + Global PEO Survey
      • 10 Differences between HRM & the Global PEO / International PEO
      • What is an Employer of Record
    • 2019 Mexico Forecasts >
      • 2019 Mexico Forecast: Doing Business in Mexico
      • 2019 New Economic Free Zone in Mexico
    • Benefits in Mexico >
      • 12 Mandatory Benefits in Mexico
      • Private Employment Benefits in Mexico
      • Mandated Federal Holidays in Mexico
      • Profit Sharing / PTU in Mexico
      • Handling Vacation Days in Mexico
    • Hiring & Recruiting in Mexico >
      • Background Checks in Mexico
      • Independent Contractors in Mexico
      • Non Compete in Mexico
      • Hiring / Enrollment >
        • Hiring Employees in Mexico
        • How to Hire a Foreign Employee in Mexico
        • Employee Enrollment Process Under Your Legal Entity in Mexico
      • Trusted -vs- Exempt Employees in Mexico
    • Basic Payroll Facts for Mexico >
      • How to calculate... >
        • How to Calculate the Daily Pay Rate in Mexico
        • How to Calculate Christmas Bonus / Aguinaldo in Mexico
      • Overtime in Mexico
      • Shifts & Holidays in Mexico
      • Changing a Salary in Mexico
      • Average Salaries in Mexico
      • Expense Reimbursement in Mexico >
        • Mexican Expense Reimbursements
    • Terminating Employees in Mexico >
      • Severance in Mexico
  • Contact
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