WEEKLY REPORT 6.12.24

November 30 – December 6th, 2024

HOT TOPICS: Minimum Wage Increased for 2025 In 2025, Mexico’s Congress will address the proposed reduction of the standard workweek from 48 to 40 hours. However, labor reforms have taken a backseat to other priorities, such as the recently announced 12% increase in the minimum wage. President Claudia Sheinbaum highlighted this adjustment as part of her administration's focus on improving living conditions for workers.

Starting January 1, 2025, the daily minimum wage will rise to 278.80 pesos nationwide and 419.88 pesos in the Free Zone of the Northern Border. Monthly wages will average 8,364 pesos and 12,596 pesos, respectively. This change, benefiting 8.5 million workers, aligns with the goal of ensuring salaries cover 2.5 times the cost of a basic basket by 2030. Sheinbaum credited collaborative agreements with labor and business sectors for the reform, emphasizing the longterm recovery of wages after decades of stagnation. Additionally, government data revealed that wage increases since 2019 have reduced poverty and narrowed gender pay gaps, supporting sustainable economic growth. While labor hours will be debated next year, the Sheinbaum administration has prioritized immediate policies to enhance workers’ welfare and economic equity.

Source: LA JORNADA

DIGITAL PLATFORMS INITIATIVE President Claudia Sheinbaum submitted a labor reform initiative to the Chamber of Deputies to regulate work on digital platforms like Uber, Didi, and Rappi. The proposal aims to formalize labor relations by ensuring rights such as social security, housing, year-end bonuses, and vacation pay, provided workers accumulate at least 288 effective annual working hours.

The model designates workers earning at least a monthly minimum wage as “independent contractors,” but all workers are covered against work-related accidents. Companies must register employees with the Mexican Social Security Institute (IMSS), contribute to Infonavit, fulfill tax obligations, and provide itemized payment statements.

Effective working time is calculated at 45 minutes per hour worked, accounting for waiting periods.

The reform also supports union affiliation and introduces penalties for noncompliance. Resulting from discussions among authorities, workers, and companies, the initiative preserves business model flexibility while safeguarding essential labor rights.

Source: EL ECONOMISTA

THE BALAM SECURITY STRATEGY President Claudia Sheinbaum announced the initial results of the "BALAM" highway security strategy, led by the National Guard to address theft and insecurity on federal highways in 12 high-crime states. The initiative includes a significant deployment of personnel, vehicles, drones, and aerial support. Since its implementation in October, the program has led to arrests, the recovery of stolen vehicles, and the seizure of firearms and contraband.

The strategy also introduces a hotline and app for transport organizations to report incidents in real-time, facilitating quicker responses. It has received strong support from transportation associations like ANTP and CANAPAT, which are committed to aiding investigations through evidence sharing and promoting preventative measures.

Simultaneously, Omar García Harfush recently visited the military authorities in Sinaloa to address the violence in the State and commented that the security strategy would not have immediate results, but they are continuously working on improving the situation.

Authorities highlight BALAM’s focus on using technology and collaboration to enhance road safety and reduce theft incidents. Stakeholders applaud the initiative for fostering safer conditions for transporters and passengers on highways.

Source: EL HERALDO DE MÉXICO

HOT TOPICS: 2024 Q2 report of FDI in Mexico In the second quarter of 2024, Mexico recorded $31.1 billion in Foreign Direct Investment (FDI), a 7% increase from the same period in 2023 and the highest figure on record for this timeframe. Manufacturing attracted 54% of the total FDI, particularly in transportation equipment (48%) and beverages and tobacco (25%), reflecting the national industrial policy's priorities. Other sectors like finance (15%), mining (10%), and agriculture also saw growth, signaling diversification beyond traditional industries. The increase in reinvested earnings, driven by Mexico's economic stability and competitive advantages, highlights companies' focus on expanding operations. Additionally, liquidity improvements among firms have reduced reliance on external financing, promoting financial health. The reconfiguration of global value chains has strengthened Mexico’s position as a strategic supplier in key industries.

The U.S. remains the largest investor, contributing 44% of total FDI, while North America collectively accounts for 52%. Emerging interest from countries like Switzerland, Argentina, and South Korea underscores Mexico's growing appeal as an investment hub. Globally, Mexico climbed to ninth place in FDI inflows for 2023, becoming the second-largest recipient in Latin America, according to UNCTAD's World Investment Report 2024.

Key initiatives, such as the “Single Window for Investors” platform, demonstrate Mexico's commitment to fostering investment. Strategic projects, including new factories in electronics and automotive sectors, further underscore its role in global supply chains and the economic benefits of its proximity to the U.S. under the USMCA framework.

Source: SECRETARÍA DE ECONOMÍA

DEPORTATION TALKS Mexican President Claudia Sheinbaum announced plans to negotiate with Donald Trump’s incoming administration to ensure that deported migrants are sent directly to their countries of origin. Trump has pledged mass deportations, stricter border security, and measures to curb drug trafficking, including fentanyl, while demanding Mexico reduce migrant flows.

Currently, under an agreement with outgoing President Joe Biden, the U.S. deports migrants of various nationalities directly to their home countries by air.

Mexico also returns migrants under similar terms. Sheinbaum emphasized Mexico’s readiness to address potential mass deportations of Mexican nationals after Trump assumes office on January 20, while highlighting the economic contributions of Mexicans in the U.S. Foreign Minister Juan Ramón de la Fuente is visiting U.S. consulates and immigration facilities to ensure deportation processes respect human rights. Mexico’s approach includes providing support through its consular network and advocating for humane treatment of returning migrants.

Source: EL ECONOMISTA

PLAN MEXICO President Claudia Sheinbaum's "Plan México" was the focus of her first formal meeting with Mexico's top business leaders, addressing key topics such as investment, education, and security. Business representatives, including those from Grupo Modelo and Televisa, highlighted the importance of increasing investment to 25% of GDP and addressing regional disparities through targeted development. Despite concerns over security, Sheinbaum urged patience, emphasizing her administration’s strategies.

Simultaneously, Juan José Sierra Álvarez was elected president of Coparmex for 2025-2026, beginning January 1, 2025. Representing over 36,000 companies, Coparmex contributes 30% of Mexico’s GDP. Sierra aims to strengthen collaboration between the private sector and government to address economic challenges. His leadership could enhance business influence on public policy, fostering growth and innovation. These developments highlight a push for unity and resilience, signaling potential opportunities for domestic and foreign investment while addressing pressing structural and security concerns.

Source: EL FINANCIERO

TRAIN INVESTEMENTS MEXICO

IN

The Mexican government announced a 157 billion peso investment in 2025 for passenger train projects, including the AIFA-Pachuca and Mexico-Querétaro routes, as well as converting the Tren Maya for cargo use. These initiatives aim to construct over 3,000 kilometers of rail, creating 70,000 direct and 140,000 indirect jobs. The projects are part of a broader national development strategy, enhancing regional connectivity, tourism, and economic growth while revitalizing areas abandoned after the cessation of passenger trains decades ago.

Source: EXPANSIÓN

HOT TOPICS: Legislative and Regulatory Issues: LABOR

FISCAL

ENVIRONMENTAL

Various provisions of the Federal Labor Law and the Federal Law of Workers in the Service of the State,

Bill Amending, Adding, and Repealing Various Provisions of the Federal Rights Law

Presented by: Claudia Pardo

Presented by: Claudia Pardo

Initiative to reform the Solid Waste Law of Mexico City regarding shared responsibility for plastics from large generators.

Sheinbaum

Purpose: Establish in both sections of Article 123 of the Constitution an explicit provision for labor laws to include measures aimed at eradicating the gender wage gap.

Status: Submitted as part of a Set of Reforms by President Claudia Sheinbaum; Presented to the plenary of the Senate

Sheinbaum

Purpose: Update payment rates for public services and national property use, ensuring fees reflect real impacts, exempt civil protection telecom users, afromexican communities, and promote rights for seniors and disabled individuals. Also, clarify beach-related fees and adjust mining, water, and telecom services.

Status: Passed, turned to the Executive

Reform of various provisions in the Federal Labor Law Presented by: Ricardo Monreal Ávila (MORENA)

TRANSPORT

POINT OF AGREEMENT ON THE MONITORING OF DOUBLE-TRAILER VEHICLES

Status: Approved by the Senate and sent to the Executive for its approval

Presented by: Sen. Saúl Monreal Ávila (Zac - MORENA)

Purpose: Prohibits imposing maximum limits on profit-sharing for workers.

The minimum share must be the average received over the past five years, applying whichever amount is more favorable to the worker.

Purpose: Recommends that the Secretariat of Communications and Transport fully enforce surveillance on vehicles operating with trailers or double articulation, in accordance with NOM-012-STC-2017, and sanction those exceeding maximum dimensions, weight, or axles, applying the utmost diligence to prevent catastrophic accidents on transport routes.

Status: Pending in the Commission for discussion

Status: Published in the Parliamentary Gazette

Presented by: Geovanna del Carmen Bañuelos De la Torre (MORENA)

Purpose: Defines "large generators" as those producing ≥10 tons of waste annually, requiring them to manage and dispose of their waste responsibly until delivered to authorized sites, assuming full responsibility until proper disposal.

Status: Published in the Parliamentary Gazzete Initiative to reform the Circular Economy Law to establish the Circular Economy Plan.

Purpose: Employers are required to provide enough seats with backrests for workers during their shifts to rest periodically. Workers cannot be forced to stand for their entire shift.

Decree Bill Amending Section VIII of Article 127 of the Federal Labor Law

Presented by: Dip. Alberto Vanegas Arenas (MORENA)

Presented by: Dip. Manuel Talayero Pariente (PVEM) Purpose: Proposes the Circular Economy Plan, defining "Extended Responsibility" to ensure waste is managed through recovery and recycling, requiring manufacturers to present plans to the Secretariat, and promoting public awareness programs on waste separation.

Status: Published in the Parliamentary Gazzette

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