Mexico Employer of Record

As you look to hire employees in Mexico, here are some common regulations you’ll need to know to create a compliant contract, as well as how an employer of record and PEO can provide support for your unique HR needs. Working hours Although Mexican employment contracts spell out employees’ specific working hours, a workweek may not exceed 48 hours. Employees must receive one fully paid day off for each six days of work. Mexican labor law establishes the following maximum weekly work shifts:

• Day shifts: Eight hours between 6 a.m. and 8 p.m., equivalent to 48 hours per week
• Night shifts: Seven hours between 8 p.m. and 6 a.m., equivalent to 42 hours per week
• Mixed shifts: Seven and a half hours divided between the day and night, equivalent to 42 hours per week

Compensation As you consider the appropriate salary to offer new employees, keep in mind:

• Mexico’s standard minimum wage is 141.70 pesos per day
• Along the Northern Border Free Zone, or Zona Libre de la Frontera Norte, which includes the state of Baja California, as well as the northern parts of Chihuahua, Coahuila, Nuevo Leon, Sonora and Tamaulipas, minimum wage is 185.56 pesos per day
• Manual laborers must be paid at least weekly, and other workers must be paid at least every two weeks
• Employees are entitled to triple their wages for the day if they are required to work on their rest day, and employees who work on Sunday must receive an additional 25% of their wages
• Overtime cannot exceed three hours a day or three times a week, and requires double pay for the first nine hours a week and triple for all hours after that

As your employer of record in Mexico, we can provide you with resources and insights about employee compensation, so you are better equipped to make a competitive employment offer. Bonuses Employers in Mexico are required to pay a Christmas bonus, known locally as el aguinaldo, by December 20 of each year. This mandatory bonus for employees who have worked for a company for at least a year is equivalent to 15 days of regular wages. Employees who have worked less than a year receive a prorated bonus. Additionally, under the Federal Labor Law, workers in Mexico—excluding executive officers and general managers—are entitled to a share of their employer’s profits. Probationary period If a Mexican employment contract is for an indefinite term or for a defined term over 180 days, an employer may include a 30-day trial period for new employees. The employee must agree to the trial period, however, and it must be included in the written employment contract. The trial period may be extended to 180 days for management positions. The law also permits an initial training period of up to three months, or up to six months for directors, managers and employees performing technical and professional activities. After the trial period or initial training period (which may not be combined), the employer may terminate an employee without severance if it determines the individual does not have the skills needed for the job. Termination and severance Under the Federal Labor Law, employers in Mexico may terminate employees for just cause, including:

• Misrepresentation of job qualifications, dishonesty or insubordination
• Threats, acts of violence or sexual harassment
• Intentional damage to an employer’s property or serious damage to an employer’s property through negligence
• Absence from work more than three times in 30 days without permission or cause
• Compromising the safety of the workplace
• Revealing trade secrets or other confidential information
• Failure to follow safety procedures
• Coming to work drunk or under the influence of nonprescription drugs
• Being sentenced to prison

Workers must be notified in writing of the cause for dismissal for it to be considered justified, and if an employer fails to dismiss an employee within one month of the event that precipitated just cause, the dismissal is not valid. Employees in Mexico who are dismissed for cause are entitled to all wages earned and benefits accrued. Employees dismissed without cause are entitled to severance pay equal to three months of regular pay, plus 20 days of daily pay per year of service, plus a seniority premium equal to 12 days of pay per year of service, plus all benefits due. As your employer of record in Mexico, we can work with you to quickly handle the unforeseen event of an employee termination, providing legal guidance and a personalized process that ensures you stay out of labor court.