Mexico Employer of Record
Hiring in Mexico
Employment relations are regulated by the Mexican Constitution of 1917 and the Federal Labor Law, which address work hours, minimum wage, discrimination, workplace health and safety, and unions.
Although the Labor Law is the legal standard for employer activity in Mexico, the country continues to adjust its labor laws to be more accommodating to all businesses. One major addition to the country’s labor statutes is a 2017 initiative from the Mexico Labor Department that created a new digital-based system that enables companies to self-report regulatory activities to create a more transparent compliance environment.
Related to transparency in employment is the requirement that all employees receive a written contract with clear stipulations of all labor terms and conditions.
As your employer of record and PEO in Mexico, we can ensure that every contract, for every worker, meets all requirements. We can also provide you with guidance about cultural norms and hiring best practices and keep you up-to-date with employment regulations as they change.
Employment contracts in Mexico
- 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
- 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
- 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
Employee benefits and paid leave in Mexico
When negotiating terms of an employment contract with a candidate in Mexico, here are some of the statutory benefits and paid leave requirements to keep in mind, as well as how an employer of record can support your company’s benefits strategy.
Pregnant employees in Mexico are entitled to paid maternity leave for 42 days before giving birth and 42 days after birth. If the baby has a disability or requires hospitalization, the postpartum leave can be extended by two weeks. Additionally, the employee may transfer up to four weeks of the pre-birth leave to postpartum leave.
Employees in Mexico are entitled to six paid vacation days after a year with a company. Paid vacation increases by two days each subsequent year of service. After five years, when vacation reaches 14 days, employees are entitled to two additional days for every five years of employment.
Vacation pay is equal to 125% of regular salary.
Employees in Mexico may not receive compensation in lieu of vacation leave.
Eight holidays are observed nationwide:
- New Year’s Day
- Constitution Day
- Benito Juarez Day
- International Labor Day
- Independence Day
- Revolution Day
- Presidential Inauguration Day (every six years)
- Christmas Day
Although many businesses and labor contracts observe additional days for religious and national celebrations, employees are not entitled to these days off with pay.
If employees are required to work on a national holiday, they are paid triple their daily wages.
Employees in Mexico who are unable to work because of an injury or illness not related to work are eligible for paid sick leave, providing they have paid into the social security system for four weeks before the condition developed. Sick leave is paid at 60% of an employee’s regular wage from the fourth day of the illness, up to 52 weeks (and may be extended for another 52 weeks).
Healthcare coverage for employees in Mexico is managed by the Instituto Mexicano del Seguro Social (IMSS), or the Mexican Social Security Institute. Employees and employers share the health care contributions to the IMSS.
As your employer of record in Mexico, we may be able to provide optional supplementary medical insurance coverage for professionals and their dependents at a more cost-effective rate.
In addition to medical care, the Mexican social security system funds numerous benefits, such as workers’ compensation, retirement pensions, disability payments and unemployment compensation.
Employees and employers are both required to contribute.
Employer social costs will cover a large portion of employee benefits in Mexico, but we can consult with you about supplemental coverage options, such as additional pension contributions or life insurance, if needed.
Employee onboarding with an employer of record in Mexico
- Schedule a welcome call to discuss HR and employment information for Mexico, as well as answer any questions
- Prepare a customized employment contract in English and in Spanish (or other local language)
- Share the employment contract and benefits information with the new employee for signature and review
- Gather tax and banking information from the employee to set up payroll
- Provide a local point of contact to the employee to answer any questions regarding their employment, local HR or payroll
Partner with Safeguard Global as your employer of record and PEO in Mexico
The information provided on or through this website is for informational purposes only and does not constitute legal advice. Safeguard Global expressly disclaims any liability with respect to warranty or representation concerning the information contained herein, including the lost essence, interpretation, accuracy and/or completeness of the information in transit and language translation.
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