Country Information

The United Mexican States is a country in the southern part of North America. Mexico City is the capital and one of the most exciting metropolitan areas of Latin America, attracting many tourists each year. Mexico has a very diverse culture. Its ancient Aztec origins with many indigenous people and traditions in the southern part makes the country a trendy spot in Latin America. Mexico’s macroeconomy consisting of a large domestic market, rising consumer base, growing skilled labor force, and proximity to the United States has attracted foreign investors over the years.

Employment Contracts

Employment contracts may be fixed term, seasonal or for an indefinite period.

Working Hours

The standard work period is 48 hours per week and eight hours a day. Overtime work is limited to three hours a day and three times a week, in extraordinary circumstances, for up to nine extra hours per week. Overtime is paid at 100% of the standard rate. If the extra work period exceeds nine hours a week, the pay rate is 200% over the standard rate.

Sick Leave

Employees receive up to 52 weeks of leave for an illness or injury through Mexico’s social security system. To qualify, employees must have made a minimum of four weeks of social security contributions immediately preceding the illness. The payment is 60% of the standard rate after a three-day waiting period.

Maternity/Paternity Leave

Female employees are entitled to 42 days of maternity leave before childbirth and 42 days after childbirth at 100% of the regular salary. Employers are not required to provide paternity leave, but some collective agreements may provide paternity benefits. Male employees are entitled to five working days of paid paternity leave for the birth of their children.

Compensation

The federal labor law establishes salaries in seven days for manual workers and agricultural workers and 15 days for other workers. The law allows salaries to be set per unit of time, a unit of work or per commission. Minimum wages are determined daily. Mexico does not allow employers to pay salary in a different currency, and it must be in cash unless the parties reach an agreement.. The place to pay the salary should be where the employee works regularly, and the salaries must be paid during the working day. It does mean that employees cannot be paid during the weekends. The minimum wage in Mexico varies according to region or profession.

Vacation Leave

Employees start with six weeks of paid leave per year. This increases with years of service.

Public Holidays

Mandatory rest days:

  • New Year’s Day
  • Constitution Day
  • Benito JuÃrez Day
  • International Labor Day
  • Independence Day
  • Revolution Day
  • Christmas Day
  • Federal and local ordinary election day determined by law
  • Customary Holidays

Usually, businesses observe customary Mexican holidays even though they are considered a workday. They are as follow but not limited to:

  • Holy Thursday
  • Good Friday
  • Anniversary of the Battle of Puebla
  • Day of the Race
  • Day of the Dead/All Souls’ Day
  • Lady of Guadalupe Day
Health Insurance Benefits

Basic healthcare coverage is provided through Mexico’s social security system.

Employment / Termination / Severance

Employment contracts can be terminated at the end of the contract (if fixed term), by mutual consent, by the employer or the employee. Employers may dismiss an employee, without notice, for misconduct. While there is no notice period required prior to dismissing an employee for misconduct, the employer needs to notify the employee in writing at the time of dismissal and include the reason for termination. The probation period may be 30 days for permanent employment contracts.

Employees may be dismissed for economic reasons, including reductions in force due to modernization. Employers are required to pay a three-months’ salary, plus 12 days for each year of service. For purposes of determining the redundancy payment, wages cannot be less than the minimum wage or twice the minimum wage. Employers deemed to have unfairly dismissed an employee may be required to reinstate the employee or could be liable for compensation. Employees who have worked for a minimum of 15 years and resign willingly, receive seniority reward of 12 days for each year worked. Employees cannot be dismissed due to ethnicity, race, gender, age, sexual orientation, religion, pregnancy, marital status, pregnancy, disability, political opinion, social status, financial status or for health reasons. Employees also cannot be dismissed for belonging to a union or participating in a lawful strike.

Local Laws & Regulations

We understand that local laws and regulations change and sourcing an accurate reference guide is not easy. Our data is researched and verified by our team of local international Employment Attorneys, HR and Benefit Professionals and Tax Accountants through our Atlas team and consultants, to ensure information up-to-date and accurate.

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Partnering with Atlas when expanding into Mexico, can dramatically reduce the standard brick and mortar processes of doing business in foreign markets and allow you to focus on what you do best, growing your company! To discover more about how Atlas can simplify your ability to expand globally, please feel free to contact us.
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