Common Wage Violations in Mexico’s Garment Industry (December 2020)

MSN Briefing Paper prepared for the Mexico Committee of the Americas Group

Common Wage Violations in Mexico’s Garment Industry provides guidance to international brands and manufacturers sourcing and producing apparel products in Mexico on wage violations that are widespread in the sector and how to effectively address them.

The persistence of such violations is often facilitated by the presence of unrepresentative unions that negotiate protection contracts with employers. Reforms to the Federal Labour Law instituted in May 2019 are intended to eliminate employer protection contracts and strengthen workers’ rights to freedom of association and collective bargaining.

The 33-page briefing paper documents seven common employer practices that violate Mexican labour law and/or company codes of conduct: Opaque Payslips; Irregularities regarding Bonuses and Piece Rates; False Reporting of Social Security Contributions; Improper Use and Payment for Time Off; Improper Use and Payment of Overtime; Failure to Pay Legally-Mandated Annual Bonuses on Time and Correctly; and Failure to Pay Full Severance.

The paper assesses the information provided to workers in payslips from three garment factories, and provides an example of a fully transparent payslip that factories and brands can use as a model of what information workers should be receiving.

The briefing paper includes a series of recommendations that international apparel companies operating in Mexico should take to ensure that their suppliers and wholly-owned factories fully comply with Mexico’s Federal Labour Law and company codes of conduct and eliminate wage violations described in the paper.

We hope the paper will also be a useful resource for Mexican labour organizations, as well as for social auditors and government inspectors.