Mexico Labor Management QA

LRC –Mexico Labor Regulations

LRC-MX-20.10
What must be included in the contents of a labor contract in Mexico?
Evershine RD:
According to Federal Labor Law, 1970, arts. 24-26, 35-40.
• Name, nationality, gender, marital status and address of the worker and employer
• Duration of the employment relationship
• Type of work to be provided
• Place or places where the work is to be performed
• Daily hours of work
• Amount of wages and payment conditions
• Statement that the worker will be trained according to the plans and programs established by the company or by law
• Rest days, vacation leave and other conditions agreed to by the worker and the employer.

LRC-MX-20.11
Do Mexico arrange labor contract in fixed term?
What should be the length of the labor contract in Mexico?
Evershine RD:
Mexico provided employment for a definite term.
It does not limit the duration of a fixed-term employment contract.

LRC-MX-20.20
What is the minimum age for hiring new employee in Mexico?
Evershine RD:
According to Federal Labor Law, 1970, arts. 7, 22-23, 189, 216, 246.
Employers are prohibited from hiring youths under age 15.
Employment of anyone over the age of 15 and under 18 requires parental permission.
Employee under 18 cannot work overtime, on Sundays and holidays, after 10:00 p.m. or in hazardous occupations.

LRC-MX-20.40
Is it a requirement for employer in – Mexico to conduct a pre-employment background check?
Evershine RD:
Background checks are not addressed in the Federal Labor Law.

LRC-MX-20.50
Is the Non-Competition indemnity clause in labor contract in Mexico has legal effect?
Evershine RD:
Mexican law does not expressly prohibit covenants not to compete.
Disclosure by an employee of trade secrets or other confidential information that harms the employer’s competitive position constitutes just cause for termination, even in the absence of a noncompete agreement.

LRC-MX-40.05
What are the regulations on Gender Discrimination in employment specifically for female workers in Mexico?
Evershine RD:
According to Federal Labor Law, 1970, art. 3.
Employers may not discriminate against employees or prospective employees based on race, ethnic or national origin, sex, age, or other category of discrimination that contradict human dignity.
The Federal Labor Law prohibits discrimination based on gender and sexual harassment, which is defined as the abuse of power in a relationship of real subordination that puts the victim at risk.
The law includes acts of harassment as just cause for termination.
A mechanism to prevent, treat and punish harassment in the workplace was adopted in 2013.
The Federal Labor Law prohibits employers from requiring that current or potential employees provide certification that they are not pregnant.

LRC-MX-50.10
Can the employer Mexico collect, or process data transmitted by employees over the internet?
Evershine RD:
According to Federal Law on the Protection of Personal Data Held by Private Parties, 2010, arts. 6, 8.
There must be a lawful basis, such as consent or legal obligation, for collecting, processing, using, and disclosing personally identifiable information.
Companies handling personal data must notify the affected employees.
If a security breach occurs, those affected must be notified promptly.

LRC-MX-60.10
What are the regulations on working hours in Mexico?
Evershine RD:
According to Federal Labor Law, 1970, arts. 60-73.
The maximum work week is 48 hours.
The work week comprises 6 working days, but the distribution of hours can be agreed so that employees have all, or part of, Saturday and Sunday as regular days off.
Employees are guaranteed 1 fully paid day of rest for each 6 days of work.

LRC-MX-60.30
What are the regulations on overtime hours in Mexico?
What is the overtime premium rate in Mexico?
Evershine RD:
According to Federal Labor Law, 1970, arts. 67-68; Constitution of Mexico, art. 123.
The workday can be extended under extraordinary circumstances, never exceeding 3 hours a day or 3 times a week.
Workers are paid twice their regular hourly wage for the first 9 hours of overtime in a week, 3 times their regular wage thereafter.
Employees who work on Sunday receive their regular wages plus an additional 25%.
Employees required to work on their rest day are paid triple their wages for that day.

LRC-MX-60.50
Is it common to pay 13th month’s salary in Mexico?
Evershine RD:
According to Federal Labor Law, 1970, arts. 87, 117-127.
By Dec. 20 of each year, employers are required to pay all employees a Christmas bonus equivalent to 15 days’ regular wages.
Employees who have worked less than 1 year receive a prorated bonus.
Under the Federal Labor Law, workers are entitled to a share of their employer’s profits, the percentage subject to change by the government.
Executive officers and general managers may not participate in this program. The profits to be shared must be divided into two equal parts:
• part one must be shared equally among all the workers based on the number of days worked by each worker during the year and
• part two must be distributed in proportion to the total remuneration earned for the work performed during the year.

LRC-MX-70.10
What are the regulations on general leave policy for employee in Mexico?
Evershine RD:
According to Federal Labor Law, 1970, arts. 76-79.
Year of services Annual Leave
1 year 6 days
2 years 8 days
3 years 10 days
4 years 12 days
5 years 14 days
Thereafter, employees are entitled to 2 additional days of annual leave for every 5 years of employment.
Vacation must be taken within 6 months following the end of the year in which it was accrued.
Employees are entitled to a 25% premium above their regular salary for vacation pay and must be allowed to take at least 6 days of their annual vacation leave in one uninterrupted period.
Employers cannot pay compensation in lieu of vacation leave.

LRC-MX-70.20
What are the public holidays in Mexico?
What is the overtime premium rate during public holiday in Mexico?
Evershine RD:
According to Federal Labor Law, 1970, arts. 74-75.
Mexico observes the following 8 national holidays:
• Jan. 1: New Year’s Day
• First Monday in February: Constitution Day
• Third Monday in March: Benito Juarez Day
• May 1: International Labor Day
• Sept. 16: Independence Day
• Third Monday in November: Revolution Day
• Dec. 1 every six years (2024, 2030, etc.): Presidential Inauguration Day
• Dec. 25: Christmas Day
Employees required to work on a national holiday are paid triple their wages for that day.

LRC-MX-70.30
What is the maternity leave policy for female employee in Mexico?
Evershine RD:
According to Federal Labor Law, 1970, arts. 166-170.
Pregnant employees are entitled to paid maternity leave for 42 days (6 weeks) prior to giving birth and 42 days (6 weeks) after a 100% of regular salary.
When an employee returns to work after maternity leave, she is entitled to two half-hour rest periods a day to feed her baby.

LRC-MX-70.40
What is the paternity leave policy for male employee in Mexico?
Evershine RD:
According to Federal Labor Law, 1970, art. 132, para. XXVII.
Male employees are eligible for up to 5 days of paid leave for the birth or adoption of a child.

LRC-MX-70.50
What are the provisions on sick leave, bereavement leave and personal leave for employees in Mexico?
Evershine RD:
Sick Leave
According to Social Security Law, 1995, arts. 58, 91-92, 98.
Employees unable to work because of a non-work-related injury or illness and who have made payments into the social security system for the 4 weeks before the condition developed are eligible for paid sick leave through the Social Security Institute.
The benefit, which is 60% of an employee’s regular wage, is paid from the 4th day of the illness for up to 52 weeks and may be extended for another 52 weeks.
Other Leave
Other leave are Childcare leave and Revocation of Mandate Leave.

LRC-MX-70.60
What are the regulations on pension benefits and social security insurance benefits for employee in Mexico?
Evershine RD:
The legal retirement age in Mexico is 65, 60 with reduced benefits.
Mexico’s social insurance system is the Mexican Institute of Social Security, IMSS.
Since 1997, all private-sector employees and cooperative members entering the workforce have been required to establish an individual account with the IMSS.
Those covered by the social insurance system before 1997 can choose to receive benefits from the social insurance system or the mandatory individual account system.

LRC-MX-70.70
What are the regulations on Workers’ Compensation for employee in Mexico?
Evershine RD:
According to Social Security Law, 1995, arts. 58, 91-92.
Employers are required to register workers with the Institute of Social Security and pay premiums to the agency, which provides benefits for work-related illnesses and injuries.
Workers who suffer a work-related illness or injury are entitled to medical care, including hospitalization, surgery, medications, prosthetic or orthotic devices and rehabilitation, as well as pensions and indemnities.

LRC-MX-80.05
Can the employee in Mexico join labor union?
Evershine RD:
Federal Labor Law states that no one may be forced to join or not to join a union.

LRC-MX-80.06
How to handle labor dispute in Mexico?

Evershine RD:
According to Federal Labor Law, 1970, arts. 685 – 697.
In Mexico, there is a preference for direct settlement of labor disputes between the parties, for conciliation through the intervention of a specialized authority, and for settlement by the courts.
Mediation and binding arbitration are less widely practiced.
The revised Federal Labor Law includes new procedures for handling labor disputes.
Parties may now submit testimony of up to five witnesses per disputed fact, although the Conciliation and Arbitration Board is not required to hear the testimony of more than three witnesses.
Another change in the revised Labor Law requires information submitted to the Conciliation and Arbitration Boards to be made public.

LRC-MX-90.10
What are the regulations on workplace safety and health for employee in Mexico?
Evershine RD:
According to Federal Labor Law, 1970, art. 504.
Employers must keep first aid medications and medical supplies at the workplace and instruct personnel on how to administer them.
Employers with more than 100 employees must establish an infirmary with appropriate staff and those with more than 300 workers must establish a hospital with adequate medical and auxiliary personnel, although with employee agreement these services can be provided through local medical facilities.

LRC-MX-100.10
What are the circumstances that an employer can terminate an employee in Mexico?
Evershine RD:
The Federal Labor Law sets out specific behavior that can form the basis of dismissal for just cause.
These include:
• misrepresentation of qualifications for a job
• dishonesty at work
• threats or acts of violence at work
• intentional damage to an employer’s property
• serious damage to an employer’s property through negligence
• compromising the safety of the workplace
• immoral acts (including harassment or sexual harassment) at work
• revealing the employer’s trade secrets or other confidential information
• absence from work more than three times in a 30-day period without permission or cause
• insubordination
• failure to follow safety procedures
• coming to work drunk or under the influence of nonprescription drugs
• being sentenced to prison.

LRC-MX-100.11
What is the notification period for terminating an employee in Mexico?
How much is the severance pay?
Evershine RD:
There is no minimum notice period requirement under the Federal Labor Law.
Payment on termination varies depending on the reason for the termination.
• Employees dismissed for cause are entitled to all wages earned and benefits accrued.
• Employees dismissed without cause must be paid 3 months’ salary, 20 days’ pay for every year of service with the employer and a seniority premium equal to 12 days’ pay for every year of service, in addition to all wages earned and benefits accrued.
• Employees who resign must be compensated for unused vacation and paid a prorated portion of the Christmas bonus. If the employee has worked for the employer for 15 or more years, the employee is entitled to an additional sum equivalent to 12 days’ salary for each year of service.
• An employee who suffers a non-work-related disability that precludes him or her from working is entitled to a severance payment of one month’s salary plus 12 days’ salary for each year of service.

LRC-MX-100.12
What is the reporting requirement for employer in Mexico to notify the termination of employees to the competent authority?
Evershine RD:
Unless it is a mutual agreement to terminate the working relationship, the employer must notify the Labor Board.

LRC-MX-100.20
What are the regulations on mass layoffs in Mexico?
Evershine RD:
The Federal Labor Law regulates reductions in force due to force majeure, bankruptcy or the introduction of machinery or new production processes.
In cases involving force majeure or bankruptcy, the company must inform the local Conciliation and Arbitration Board and provide workers with three months’ wages plus a length-of-service premium of 12 days’ pay for each year of service.
In cases of reductions in force due to modernization, the preference is for a joint labor-management solution.
Should this fail, the employer must obtain authorization from the local Conciliation and Arbitration Board to execute its layoff plan.
Workers who lose their jobs have the right to compensation equivalent to 4 months’ wages plus an additional 20 days’ wages for every year of service and a seniority premium or an amount agreed upon with the union in a collective agreement, whichever is larger.

LRC-MX-100.30
What is the time limit for employer in Mexico to pay employees upon termination?
Evershine RD:
Federal Labor Law did not state the time limit to pay for the termination fee.