Criterion on the calculation of back wages

Criterion on the calculation of back wages

June 17, 2016.

Dear clients and friends, As you are aware, as of the labor reform of November 2012, the computation of back wages (wages generated from the date of an employee's dismissal until the date the award is complied with, including all those generated during the labor proceeding) was limited, establishing that their payment would be for a period of up to twelve months, and after that period interest of 2% would accrue on the basis of fifteen months of salary, capitalizable at the time of payment. In this regard, uncertainty arose since it was not clear how the aforementioned interest was to be calculated, nor what the concept "capitalizable" referred to. This past June 6 of the current year, the Plenary of the Sixth Collegiate Labor Court of the First Circuit issued the following conflict of precedents, in which it establishes the manner in which the two percent interest on the basis of fifteen months of salary is to be calculated. For additional information, please contact our experts: Javier Lizardi, Partner: + 52 (55) 5258-1021, jlizardi@vwys.com.mx Rodolfo Trampe, Partner: + 52 (55) 5258-1054, rtrampe@vwys.com.mx Alix Trimmer, Associate: + 52 (55) 5258-1016, atrimmer@vwys.com.mx Sincerely,