Mexico

HR and HR Software Guide

Country Overview

Mexico is the second-largest economy in South America and the 15th-largest economy in the world. It has a GDP (nominal) of $1.15 trillion, while its GDP in terms of purchasing power parity (PPP) is $2.45 trillion. More than 90% of exports are conducted under free trade agreements (FTAs), with more than 40 countries including the US, China, Japan, and the European Union. The country’s export trading mainly revolves around oil, silver, vegetables, cotton, coffee, fruits, and has recently emerged as a major manufacturing hub for auto parts and electronics. Prudent monetary policies, sensible fiscal policy, and structural reforms have improved Mexico’s macroeconomic performance and bolstered the economy.

Currency: Mexican Peso

Principal Language: Spanish

Government: Federal Republic

Capital City: Mexico City

Major Cities: Guadalajara, Monterrey, Puebla, León

Under the Federal Labor Law, a normal workday must not exceed 8 hours, and a standard workweek must not exceed 48 hours. A 30-minute rest period must be provided during a work shift. Employees must also be given 1 day off in a week with full pay. Most employers choose a 40-hour workweek.

The Federal Labor Law recognizes 3 work shifts:

  • The day shift of 8 hours, between 6 a.m. and 8 p.m.
  • The night shift of 7 hours, between 8 p.m. and 6 a.m.
  • The swing or “mixed” shift of 7.5 hours, divided between the day and night shifts

A swing shift is considered a night shift if more than 3.5 hours of work is performed between 8 p.m. and 6 a.m.

Overtime
Overtime is limited to 3 hours per day and must not be more than 3 consecutive days. Workers are paid twice their regular hourly wage for the first 9 hours of overtime per week.

Workers under 16 years of age cannot engage in overtime work. Employees who work on Sunday receive their regular wages and also an additional 25%. Employees required to work on their rest day are paid thrice their wages for that day.

Holidays

The national holidays in Mexico are:

  • 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 who are required to work on a national holiday are entitled to triple their wages for that day.

Maternity Leave
Women employees can take paid maternity leave for 42 days before the expected delivery date and 42 days subsequently at 100% of regular wages. The leave after the delivery date can be extended by 2 weeks if the child requires hospitalization or has a disability. Women can transfer a maximum of 4 weeks leave before the date of delivery to postpartum leave. In case of adoption, female employees get 6 weeks leave after adopting the child. When they return to work after maternity leave, they can take two 30-minute rest periods in a day for childcare. Employers can help by reducing their shifts by an hour per work day. The maternity leave is funded by the Mexican Social Security Institute (Instituto Mexicano de Seguro Social or IMSS).

Paternity Leave
Male employees are entitled to a maximum of 5 days of paid leave for the adoption or birth of a child.

Sick Leave
Employees who are unable to work due to injury or illness (not related to work) and have made contributions to the social security system for at least 4 weeks before the condition developed, qualify for paid sick leave from the Social Security Institute. The benefits are paid at 60% of regular wages from the 4th day of the injury or illness up to 52 weeks. This period can be extended by another 52 weeks if required.

Annual/Vacation Leave
Employers are required to provide 6 paid annual leaves to employees after completing 1 year of employment. The number of leaves increases by 2 days every subsequent year until the entitlement reaches 14 days after the fifth year of service. After this, annual leave increases by 2 days for every 5 years of service. Employees are entitled to an additional 25% premium if they opt for payment in lieu of vacation.

Pensions and Social Security
The legal retirement age is 65. Employees can also choose to retire at 60 years with reduced benefits. All cooperative members and private-sector employees, since 1997, are required to register with the Mexican Institute of Social Security or IMSS. Employees covered by the social insurance system pre-1997 can choose to receive benefits from the same or the individual account system with the IMSS.

Workers’ Compensation
Employers must register employees with the IMSS and also pay premiums to provide benefits to employees for work-related injuries and illnesses including surgery, hospitalization, medications, orthotic or prosthetic devices, rehabilitation, indemnities, and pensions.

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  • Provide your employees with the support they need with 24/7 access to our Employee Helpdesk.
  • One HR software for your global needs
  • Ensured compliance with in-country employment and labor laws
  • Connectivity and integrations with ERP and Payroll systems
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  • Supporting 170+ countries and localized in 17+ languages
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