MEXICO
AUTOMOBILE DEALERS
2024 IN REVIEW
President Scheinbaum Proposes Workplace Reforms Soon after Claudia Scheinbaum assumed the office of President on October 1, she set into motion several changes that could impact employers across Mexico in the coming years. • She wants to implement annual minimum wage hikes of approximately 12% – which is especially significant given that approximately 40% of workers earn minimum wage. • She supports reducing the standard workweek from 48 to 40 hours, a reform previously proposed but not yet enacted. • She wants to strengthen women’s rights through a constitutional equal pay guarantee for equal pay and a “women’s bill of rights” to help identify and combat gender discrimination. Hefty New Penalties for Excessive Work Hours A revision to Mexican federal law that took effect in June means that employers could face not only significant fines but possible criminal penalties if they require employees to work excessive hours. Read about the changes and a plan of action for employers here.
LOOKING AHEAD TO 2025
2025 PREDICTIONS
Expect Review of the USMCA/T-MEC
Goodbye, Overtime Rule – But Don’t Ignore Compliance Following a Texas court’s nationwide injunction that blocked the Overtime Rule and prevented a January 1 minimum salary increase to $58,656, the incoming Trump administration will withdraw the rule altogether in early 2025 – which will grant much welcome relief to dealers. However, dealers should still be vigilant about wage and hour and pay plan compliance, as increased attention on employee compensation may expose other potential violations. FTC Might Scale Back, But Some States Will Fill the Void The incoming administration’s focus on deregulation will weaken current FTC measures (such as the CARS Rule, TILA, Buyers Guide Rule, Red Flags Rule, etc.) which have proven onerous to car dealers. However, we’ll see a corresponding increase in state regulatory activity on fair practices and consumer protection in 2025. This will require dealers to remain attentive to data privacy and similar issues. Dealers Will Use AI to Help Navigate Uncertain Times It’s not clear whether an anticipated decrease in interest rates will strengthen automotive sales, or whether President-elect Trump’s proposed tariffs may cause supply chain disruptions that could accelerate dealers’ return to pre-COVID profit levels. Given this uncertainty, 2025 will be the year that many dealers invest in AI tools to improve efficiencies among their labor forces and provide more stability through potential market shifts.
The United States-Mexico-Canada Agreement (USMCA), known as “T-MEC” in Mexico, has played a key role in Mexico’s labor reform by including strong labor provisions and compliance obligations since 2020. However, with new leadership taking reins at the executive level in both Mexico and the U.S., we can expect a review of the accord with possible revisions in 2025. Judicial Elections Will Reshape Country The largest judicial change in Mexican history will take hold in June 2025 as we begin to see the popular election of all federal judges, including Supreme Court justices. This year, we’ll see the election of new Supreme Court justices and half of all other judicial positions. The remaining positions will be contested in 2027.
Germán de la Garza De Vecchi
Mexico Regional Managing Partner gdelagarza@fisherphillips.mx
Matthew R. Simpson
Christopher C. Hoffman
Héctor Cuevas
Andrea Brizio Rivas
Atlanta Partner and Co-Chair, Automobile Dealers Industry Group msimpson@fisherphillips.com
San Diego Regional Managing Partner and Co-Chair, Automobile Dealers Industry Group choffman@fisherphillips.com
Mexico Partner hcuevas@fisherphillips.mx
Mexico Partner abrizio@fisherphillips.mx
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