Although it’s widely known for celebrating Día de Muertos, or Day of the Dead, Mexico is increasingly a land for living well. A diverse population that blends indigenous, Spanish and other cultures is the lifeblood of this emerging market that’s seen steady economic growth and benefited greatly from international free trade agreements.
The oil sector, remittances from the U.S., exports, agriculture, mining, industrial activity and tourism—namely to beaches on both the Pacific and Gulf—also play a significant role in boosting the health of the Mexican economy and workforce, making the country an attractive option for businesses looking to expand and employ workers.
If Mexico is on your radar, it’s important to consider how labor laws and cultural norms can affect your growth and workforce strategy. Here are a few factors to weigh:
- Workweek: Although most employers adopt a 40 hour workweek, federal labor law sets a regular workday of eight hours and a regular workweek of 48 hours, with a guaranteed day of rest per week with full pay. Employees who are required to work on their rest day are paid triple their wages for that day, and employees who work on Sunday receive their regular wages plus an additional 25%.
- Mandatory bonus: All employees are entitled to a Christmas bonus equivalent to 15 days of regular wages, which must be paid by December 20 each year. For employees who have worked for less than one year, a prorated bonus is paid.
- Vacation: When employees have been with a company for a year, they are entitled to six paid annual vacation days, increasing by two days each year until they reach 14 days after five years of service. After five years, employees are entitled to two additional days of leave for every five years of employment. Employees are entitled to a 25% premium above their regular salary for vacation pay.
- Holidays: Mexico observes eight public holidays, and if employees are required to work on a national holiday, they are entitled to triple their wages for that day. When a public holiday falls on a Sunday, employees are given Monday off, and when a public holiday falls on Saturday, Friday is given off. Additionally, many businesses and labor contracts observe other holidays for religious and national celebrations, but employees are not entitled to these days off with pay.
- Benefits: In addition to an obligation to contribute to private retirement and old age insurance accounts of employees, employers are largely required to participate in profit sharing. Exceptions to profit sharing include executive officers and general managers.
- Lifestyle: Mexicans of all religious and ethnic backgrounds celebrate Día de Muertos on November 1 and 2, to demonstrate love and respect for deceased family members. The holiday, recognized in UNESCO’s list of the Intangible Cultural Heritage of Humanity, is marked by face-painting and costumes, parades, special food and drinks, and perhaps most important, ofrendas, or altars donned with photos, food and water, and candles in homes or cemeteries to welcome the spirits of the deceased.
Whether you’re just beginning to explore growing your workforce in Mexico, or you already have in-country contractors and are looking to expand their roles compliantly, we can help you navigate the employment laws and cultural considerations that come into play.
To date, Safeguard Global has helped 75 companies employ almost 200 people in Mexico. Contact us today to schedule a free consultation with one of our global solutions experts.