Mexico Employment Law Basics Part 2: Am I Negotiating Now?!

In our first post in this series, we discussed what constitutes an employment relationship under Mexico’s employment laws, the types of employees you can hire, and the importance of having a written employment agreement with your Mexican employees. We also described the basic working conditions your employment agreements must contain.

In this post we will discuss two issues to be mindful of when negotiating Mexican employee working conditions: working hours and compensation.

Working Hours

In Mexico, a working day is divided into the day shift (6:00 a.m. to 8:00 p.m.), the night shift (8:00 p.m. to 6:00 a.m.), and mixed shift (comprising part of the day and night shifts, the latter of which shall not exceed 3½ hours). An employer can agree with its employees on the duration of the working day within the shifts and divide the working hours freely. However, there are certain hourly parameters about which employers must be mindful, including the following:

  • Employers are prohibited from having their employees exceed Mexico’s statutory working day maximums: eight hours for a day shift, seven hours for a night shift, and seven and a half hours for a mixed shift.
  • Employees must be given a minimum thirty-minute break during their working day to eat/rest, and if the employee cannot leave the work premises during this break, their time spent on break is computed towards their working day/night.
Wages and Bonuses

Mexico’s Federal Labor Law prohibits withholding or reducing wages other than in very limited circumstances, such as payment of alimony, or fees to the Mexico National Workers Housing Fund. Payment of wages must be in Mexican currency, and not in the form of merchandise, vouchers, tokens or any other items meant to replace Mexican currency.

Mexico’s minimum wage is the lowest amount an employee must receive in cash for services rendered in a workday. Mexico’s National Minimum Wage Commission (Comisión Nacional de los Salarios Mínimos — an entity comprising employee, employer and government representatives), every year issues a resolution setting forth the minimum wages applicable to the two areas of Mexico divided for wage purposes: the Northern Border Free Zone or Zona Libre de la Frontera Norte, (the 25 km strip south of the US border), and the rest of the country. For 2022, MXN260.34 (USD$12.58) an hour is the minimum wage in the Northern Border Free Zone and MXN172.87 (USD$8.34) an hour is the minimum wage for the rest of the country.

This yearly resolution contains the general minimum wage (applicable to all employees in specific geographic areas regardless of their activity, profession, trade or job performed) and the professional minimum wage (applicable to all employees in specific activities, professions, trades or special jobs within one or more geographic areas). The increase in the minimum wage must each year be at least equal to the rate of inflation during the previous year.

Mexico has what is called Aguinaldo, but in English is more commonly referred to as the thirteenth month or Christmas Bonus. This is a required payment to employees equivalent to fifteen days salary per year of employee service with the employer. Those who have not completed a year of service must be paid the proportional part of the bonus. The Aguinaldo bonus must be paid to employees before December 20 each year. Other incentive programs, such as performance bonuses, are neither mandatory nor regulated by Mexican law, but these are typically included in employment agreements.

Overtime

Mexican law provides that employers may extend their employees’ working days if and when unforeseen circumstances arise. These extensions must not exceed three hours per day and three times a week. Employees must be paid double their normal hourly salary for overtime, and if overtime exceeds nine hours in a week, employees must be paid triple their normal hourly salary.

In our next post we will dig deeper into the basic working conditions that must and/or should go into your Mexico employment agreements.

Read More

Mexico, Uncategorized