Mexico Labor Law and Employment Policy Overview

Employment Law Overview

• Key Legislation:
  • Federal Labor Law
  • Social Security Law
  • National Housing Fund Law
• Legal Characteristics:
  • Aims to promote job stability and protect workers' rights
  • Prescribes strict termination procedures and severance pay requirements
  • Requires employers to provide social security and health insurance benefits to employees

Employment Contract Requirements

• Contract Types:
  • Fixed-term contracts (maximum 2 years)
  • Indefinite-term contracts
• Contract Provisions:
  • Must include details on job duties, compensation, working hours, vacations, and benefits
• Language and Currency:
  • Contracts must be in Spanish and denominated in Mexican pesos (MXN)

Working Hours Regulations

• Standard Work Hours: 48 hours per week, 8 hours per day
• Rest Days and Breaks: Minimum of 24 hours of rest per week, 30 minutes of rest per day

Vacation Policy

• Annual Leave:
  • 12 days per year, increasing by 2 days per year after 1 year of service
• Public Holidays: 7
• Special Leaves:
  • Sick leave: Paid through social security, up to 52 weeks
  • Maternity leave: 42 days before and 42 days after childbirth, paid at 100% of regular salary
  • Paternity leave: 5 working days

Employee Severance and Contract Termination

• Notice Period: Not legally prescribed, but typically 30 days
• Severance Pay:
  • Termination without cause: 3 months' salary, plus 20 days' salary for each year of service, and a seniority bonus of 12 days' salary for each year of service
  • Termination with cause: Severance allowance
• Unfair Dismissal Protection: Employers must have just cause to terminate an employee, or they may be liable for severance pay

Tax Laws

• Personal Income Tax:

  • Salary Range (MXN)	Tax Rate
    0 - 8,952.49	1.92%
    8,592.50 – 75,984.55	6.4%
    75,984.56 – 133,536.07	10.88%
    133,536.08 – 155,229.81	16%
    155,229.82 – 185,852.57	17.92%
    185,852.58 – 374,837.88	21.36%
    374,837.89 – 590,795.99	23.52%
    590,796.00 – 1,127,926.84	30%
    1,127,926.85 – 1,503,902.46	32%
    1,503,902.47 – 4,511,707.37	34%
    4,511,707.38 and above	35%

• Social Security Contributions:

  • Employer: 24.95% - 33.58%
  • Employee: 5.15%

Health Insurance

• Insurance Policy:
  • Basic health insurance provided by the Mexican Social Security Institute (IMSS)
• Coverage:
  • Medical, dental, and maternity care
  • Medications and hospitalization

Compensation and Benefits

• Minimum Wage:
  • National: MXN 207.44 per day
  • Northern Border Zone: MXN 312.41 per day
• Compensation Structure:
  • Wages, bonuses, allowances, and benefits

Work Permits and Visas

• Permit Requirements:
  • Foreigners require a work permit or visa
• Application Process:
  • Contact the Mexican embassy or consulate abroad
  • Submit required documents, such as passport, job offer letter, and proof of funds

Confidentiality and Non-Compete Clauses

• Enforceability:
  • Confidentiality and non-compete clauses are enforceable in Mexico
• Common Provisions:
  • Prohibiting disclosure of confidential information
  • Prohibiting employment with competitors for a specified period

Training and Development

• Legal Requirements:
  • Employers must provide safety training and skills development to employees
• Government Support:
  • Government provides training programs and funding

Workplace Diversity and Inclusion

• Legal Requirements:
  • Prohibit discrimination based on race, gender, religion, or disability
• Enforcement Measures:
  • Employers must establish and implement anti-discrimination policies

Remote Work Policy

• Legal Framework:
  • Remote work is legally recognized in Mexico
• Tax and Insurance Implications:
  • Remote work may impact tax and social security contributions

Authoritative Website Addresses

• Mexican Ministry of Labor