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Mexico's top court suspends public sector pay cuts law

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Mexico's top court suspends public sector pay cuts law

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MEXICO CITY (Reuters) - Mexico's Supreme Court on Friday suspended a new law that cuts public sector pay, freezing it until the tribunal has made a definitive ruling on the legislation, and dealing a blow to Mexican president Andres Manuel Lopez Obrador.

Promulgated in November, the law stipulates that no public servant can earn more than the president.

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Vowing to fight corruption and reduce inequality, Lopez Obrador has vowed to push through a raft of austerity measures. He has cut his own salary to 40 percent of what his predecessor earned, to 108,000 pesos ($5,331.36) per month.

However, opposition senators filed a challenge against the pay cut law, saying it violated the rights of public servants.

In granting the suspension, the court said in a statement the law could not be applied until a definitive ruling had been made. That complicates the government's first budget under Lopez Obrador, a veteran leftist who took office on Saturday.

The 2019 budget is due to be presented on December 15, meaning the government may have to revise its spending plans.

(Reporting by Dave Graham and Noe Torres; Editing by Diane Craft)

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