7 Mexican Labor Laws You Need to Know About

Over the past five years, many companies have opted to outsource in Mexico, hiring remote developers and building their tech teams in this technological hotspot. There are various benefits to doing so, including:

• Reduced costs overall, with the cost of living being 300% less than in the U.S. 
• Proximity to the U.S. with shared timezones, making it easier to collaborate 
• Growing talent with more than 130,000 tech graduates per year
• Cultural similarities with other North American countries

If your organization is looking to hire in Mexico, you’ll have access to top tech talent that won’t infringe on your budget. However, you’ll want to remain aware of a handful of Mexican labor laws and working requirements before doing so. Here’s what you need to know to ensure your business is fully compliant as it expands to Mexico. 

Contracts

Though employment can occur without a detailed contract in some countries, this isn’t the case in Mexico. According to the Mexican Federal Labor Law (FLL), all contracts must state:

• The place where an employee will work
• Descriptions of any training
• All salary and benefit details
• Rest days and holidays 
• Employment duration (if not defined, the timeline is indefinite) 
• A lengthy job description
• Nationality, civil status, and a tax ID number
• Sometimes, the residence of the employee and employer 

Working Hours

Many employers in the U.S. don’t have limits regarding their employee’s work hours, so long as their compensation is aligned. However, there are specific hours in which employees can work in Mexico. So, if you’re hoping to hire in this country, know that your team members won’t be working around the clock.

Typical business hours are the same as in countries like the U.S., from 8:00 a.m. – 6:00 p.m., with three different work shifts recognized:

1. Day shifts: 8 hours between 6:00 a.m. – 8:00 p.m., 48 hours per week maximum
2. Night shifts: 7 hours between 8:00 p.m. – 6:00 a.m., 42 hours per week maximum
3. Mixed: 7 ½ hours between both day and night hours, with the night shift not exceeding 3 ½ hours, 45 hours per week maximum

All employees are allowed at least one 30-minute break each day. If any team member is working overtime, they must be paid double. After their 9th hour of overtime, triple compensation applies. Employees may also receive an additional 25% on top of overtime should they be working on Sunday.

Benefits & Bonuses

All employees working in Mexico are entitled to paid time off. After one year of employment, team members are given a minimum of 6 paid days off each year. This number will increase with time and does not include Mexico’s 7 annual paid public holidays, including:

1. January 1 – New Year’s Day
2. February 5 – Constitution Day
3. March 21 – Benito Juarez Day
4. May 1 – Labor Day
5. September 16 – Independence Day
6. November 20 – Revolution Day
7. December 25 – Christmas Day

Mexican workers are also entitled to a year-end bonus, comprised of at least 15 days of their daily base salary, paid no later than December 20 each year.

Background Checks

All employers in Mexico can request a background check – nothing prohibits them from doing so. However, the Mexican Federal Law on the Protection of Personal Data Held by Private Parties is in charge of the treatment of data collected, giving employees the right to determine who uses the data and what it’s used for.

Termination

Countries such as the U.S. have what’s called “at-will employment.” This means employers can terminate employees for any reason, so long as that reason is legal. But, in Mexico, there must always be just cause for termination. If not, employees will be eligible for severance pay. Many of these causes come from employee behavior. Just causes include:

• Dishonesty
• Mistreatment of employers
• Insubordination
• Disobedience
• Disclosure of trade secrets
• 3 unjustified absences within 30 days

Wages

Mexico’s National Minimum Wage Commission is in charge of updating the minimum wage requirements, often doing so each year. As of January 1, 2022, the commission increased Mexico’s general minimum wage to 172.87 pesos per day, a 23% increase from the 2021 wage of 141.70. This equates to $8.65 per day in the U.S.

Outsourcing Reform

As of 2021, Mexico implemented various changes to its outsourcing laws. So if you’re looking to outsource in Mexico, or if you’re already doing so, be sure to take a look at our post here. Inside, we detail essential information for all who look to Mexico to grow their business.

Moving Forward

At CodersLink, we’re here to ensure you’re connecting with top tech talent in countries like Mexico while still following all legal requirements. Our team of experts remains up to date on the fast-paced tech landscape, as well as labor laws in regions across the globe. We’ll help you build a team of world-class talent without breaking any labor laws (or your budget!) in the process.

From recruiting to training, we’re ready to make sure your team focuses on collaboration, using the unique strengths each member brings to the table to meet your company goals. Get started with us today, and trust us to fulfill your IT hiring and outsourcing needs.

Disclaimer:

The above information is for awareness purposes. You should seek legal advice in regards to your specific circumstances.

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