Get access to the exclusive HR Resources you need to succeed in 2018!
Training, policies and tools to help HR prevent and respond to harassment claims.
Is your employee handbook keeping up with the changing world of work? With SHRM's Employee Handbook Builder get peace of mind that your handbook is up-to-date.
Build competencies, establish credibility and advance your career—while earning PDCs—at SHRM Seminars in 12 cities across the U.S. this spring.
#SHRM18 will expand your perspective – on your organization, on your career, and on the way you approach HR. Join us in Chicago June 17-20, 2018
On Jan. 20, 2016, Mexico's Supreme Court affirmed the constitutionality of the Federal Labor Law (FLL) provision allowing back wages to be capped at 12 months' compensatory damages in all employment-related lawsuits commenced after Dec. 1, 2012.
In December 2012, the FLL was amended, in part, to place a limit on the accrual of back wages to 12 months. For years, the unlimited accumulation of back wages had served as an incentive for plaintiffs to prolong trials. With no comparable tools by which to compel plaintiffs to prosecute their claims in an expedient manner, most companies – especially small and medium-sized businesses – felt compelled to settle their disputes even at unreasonably high amounts, or risk massive economic liabilities if plaintiffs prevailed at trial.
Paragraphs 2 and 3 of Article 48 of the FLL, which were enacted as part of the reform to the FLL in 2012, effectively place a limit on the accrual of back wages. Once the 12-month period has concluded, a monthly interest rate of 2 percent is generated on 15 months of the employee’s monthly wage, to be paid once the litigation process has concluded. Additionally, the accrual of back wages is suspended if the worker dies during the litigation process.
These provisions, which to a degree leveled the playing field for the parties, were the subject of multiple constitutional challenges at the state level, which created conflicting jurisprudence at the circuit level. With the Jan. 20, 2016 decision, the Supreme Court upheld the constitutionality of the cap on back wages, holding that it does not violate the principle of progressive contribution required under Article 1 of the Constitution, nor does it violate human rights. The Supreme Court’s decision is binding on all state and federal courts of the nation.
Mónica Schiaffino is a shareholder in the Mexico City office of Littler. Rogelio Alanis Robles is an associate in the firm’s Monterrey, Mexico office. Republished with permission. © Littler. All rights reserved.
You have successfully saved this page as a bookmark.
Please confirm that you want to proceed with deleting bookmark.
You have successfully removed bookmark.
Please log in as a SHRM member before saving bookmarks.
Your session has expired. Please log in again before saving bookmarks.
Please purchase a SHRM membership before saving bookmarks.
An error has occurred
Recommended for you
CA Resources at Your Fingertips
SHRM’s HR Vendor Directory contains over 3,200 companies