Employee Wage Deductions: Regulations and Prohibitions

Wage discounts to workers is a very relevant issue in the labor field, its correct application or violation can have significant consequences for both employees and companies.

The Federal Labor Law (LFT) in Mexico clearly establishes the conditions under which wage deductions may be made in order to protect workers’ rights and guarantee fair and equitable labor relations.

However, in practice, some companies may incur in violations of these regulations, which generates conflict situations and possible litigation, so it is crucial to understand the importance of respecting the legal provisions related to salary deductions to avoid possible legal sanctions.

Article 110 of the LFT clearly establishes the circumstances under which deductions may be made from workers’ wages, and such circumstances must comply with certain requirements to be considered legal.

The article states that discounts are allowed in the following cases:

  • Payment of debts contracted with the employer, as well as overpayments made to the employee, errors, losses, breakdowns or acquisition of articles produced by the company or establishment.
  • Payment of rent for rooms provided by the company.
  • Payment of installments to cover loans from the Instituto del Fondo Nacional de la Vivienda para los Trabajadores (INFONAVIT).
  • Payment of dues for the incorporation of cooperative societies and savings banks.
  • Payment of alimony in favor of maintenance creditors.
  • Payment of ordinary union dues.

As a point to consider, the amount due or discount shall only be applicable to in the section on debts contracted with the employer and savings banks, on the understanding that in no case may it be greater than the amount of one month’s wages and the discount will be as agreed upon by the employee and the employer, but may not exceed thirty percent of the excess of the minimum wage.

With respect to discounts for union dues, the LFT establishes that the employee may declare in writing that they are not to be applied, and therefore the employer may not withhold them, otherwise, when the employee himself agrees with the dues, it is the company’s responsibility to withhold the corresponding amounts and must deliver them in full to the union when so stipulated.

Finally, and as a point of interest, it is important to note that the Supreme Court of Justice of the Nation (SCJN) established that wage deductions for not complying with working hours are prohibited and, therefore, are illegal.

On the other hand, the employer may deny the employee access to the work place and not pay for the day not worked in case of tardiness, but may not make the employee work or deduct wages for that reason.

In summary, discounts for tardiness are prohibited under the LFT and the criteria issued by the SCJN, however, employers have the right to take disciplinary measures that are appropriate for the protection of labor rights and legality in labor relations.

The labor team of Vega, Guerrero y Asociados is at your service to provide the corresponding advice and avoid possible violations to the worker’s labor conditions by the companies.

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