Mexico Extends Suspension of Non-essential Activities to May 31, 2020, Due to COVID-19

On April 21, 2020, Mexico’s Ministry of Health extended through May 30, 2020, an emergency decree suspending all nonessential activities in the country in order to prevent the novel coronavirus (COVID-19) from continuing to spread. The original order had been set to terminate on April 30, 2020.

Essential Activities

Under the decree, essential companies that continue to operate and render services must continue to: (1) apply safe distancing measures in production and facilities; (2) implement sanitary contingency protocols (i.e., cleaning and sanitizing workplaces); (3) prohibit congregations of more than 50 people; (4) ensure that individuals practice proper hygiene when sneezing, and avoid shaking hands, hugging, and kissing.

High Risk Individuals

Individuals who are considered at high risk are required to stay at home regardless of whether they work in an essential or non-essential service and regardless of the municipality in which they are located.

The order does not mention whether employers are required to continue paying high-risk individuals 100 percent of their salaries and full benefits. Therefore, employers may be able to negotiate salaries and benefits as of April 20, 2020.

Sanitary Contingency

The Ministry of Health did not declare a sanitary contingency. In addition, the ministry did not declare a suspension of the labor relation. Articles 42-BIS, 427, and 429 of the Federal Labor Law state that employers are required to pay workers the minimum wage when a health authority suspends work. Therefore, currently, employers are not required to pay employees the minimum wage.

Extraordinary Actions

The new order establishes extraordinary actions to attend to the sanitary contingency. The decree states that the Ministry of Health will lift the “extraordinary actions” as of May 18, 2020, in low municipalities that have low or no rates of COVID-19 transmission.

The decree also states that the ministry “will define the criteria for evaluating the intensity of transmission” of the disease, “as well as any other factor related to the risk of spreading the disease and the vulnerability of the affected populations.” The ministry will also establish guidelines to minimize mobility between municipalities that have different degrees of contagion.

Return To Work?

The federal government has unofficially mentioned that companies might be able to return to their activities on June 1, 2020, and, in some regions, where the spread of COVID-19 has been insignificant, companies may resume operations on May 18, 2020. However, it remains unclear at this point whether businesses will in fact be able to resume work on those dates.

Important Considerations for Employers

Employers may want to keep in mind that local and federal authorities are conducting inspections in order to determine whether companies are performing essential activities rendering essential services. The authorities do not need to present notice before arriving at an employer’s worksite in order to satisfy the purpose of the inspection. The purpose of the inspection will be to review whether the audited company is (i) essential; and (ii) if so, whether it is complying with safe distance and sanitary measures.

Companies that remain open may want to be prepared to be inspected by labor authorities. The Office of the Labor Ministry will review a business’s corporate documents and operations to confirm whether a business is in fact essential.

Non-essential companies that continue operating can be subject to fines, immediate closure, and criminal prosecution.

State Government Obligations

Under the decree, state governments are required to:

• maintain an updated daily report on individuals who have serious acute respiratory infections;
• implement prevention and control measures as stipulated by the secretary of the Ministry of Health;
• establish and enforce mechanisms to limit mobility among individuals between different municipalities; and
• guarantee that measures instituted by the federal health authorities are implemented.

Important Considerations

Local and federal authorities are conducting inspections in order to determine whether companies are performing essential activities and rendering essential services. These inspections, which do not require prior notice, are for the purpose of reviewing if the audited company is (i) essential and (ii) complying with safe distance and sanitary measures.

An officer of the Labor Ministry will review the corporate purpose that the company’s Tax Identification Number (Registro Federal de Causantes or RFC) or constituent instrument references. The officer will review whether the company’s operations correspond to the corporate purpose mentioned therein.

If a company continues operating but is not listed as essential, it can be subject to fines and/or immediate closure of its worksite. The federal government claims that non-essential companies that refuse to close can be subject to a criminal procedure.

Ogletree Deakins will continue to monitor and report on developments with respect to the COVID-19 pandemic and will post updates in the firm’s Coronavirus (COVID-19) Resource Center as additional information becomes available. Critical information for employers is also available via the firm’s webinar programs.