Employment Law in Mexico

Mexico is a federal republic made up of 31 states, plus the Mexico City federal district. Employment matters are regulated by federal, nationwide legislation.

The national Constitution contains relatively detailed provisions on employment and labour issues, giving workers rights in areas such as working hours, overtime, rest days, maternity leave, minimum wages, payment of wages, profit-sharing, vocational training, health and safety, occupational accidents/diseases, termination of employment, trade unions and collective bargaining. The Constitution also contains guarantees on matters such as equality. Building on the Constitution, a single item of legislation, the Federal Labour Law (Ley Federal del Trabajo) — originally adopted in 1970 and amended on numerous occasions since — governs almost all aspects of employment relationships, both individual and collective.

The Federal Labour Law applies to virtually all employment relationships. It contains various specific rules (in areas such as working time) that apply to particular sectors or categories of worker, such as maritime workers, civil aviation, rail transport, road transport, agriculture, commercial agents, professional sportspeople, actors, musicians, homeworkers, domestic workers, mines, hospitality, healthcare and higher education. These special rules are not covered in this topic. The Law also treats differently in some areas — such as dismissal and collective rights — “trusted workers” (trabajadores de confianza). These are managers and other workers who perform general functions of management, inspection, surveillance or supervision in the company or establishment.

In the event of doubt or disputes, the interpretation of the Federal Labour Law that is most favourable to the worker applies.

The Social Security Law (Ley del Seguro Social) deals with some employment-related matters, such as sickness and maternity benefits, while the Federal Law on the Prevention and Elimination of Discrimination (Ley Federal para Prevenir y Eliminar la Discriminación) addresses discrimination in employment and more widely.

Other important sources of regulation of the employment relationship are employment contracts, collective agreements and the “internal work regulations” that all employers must have in place (dealing with matters such as disciplinary procedures and working time arrangements). Any provision in an employment contract that permits the worker to waive any of their rights and prerogatives under employment legislation and collective agreements is null and void.

This topic refers to employment law in the private sector only.

• Other circumstances being equal, employers must give preference in recruitment to Mexican nationals and to various other groups, such as trade union members and individuals with family responsibilities. Recruitment and Selection

• A probationary period of up to 30 days or an initial training period of up to three months is permitted at the start of employment, after which the employer may dismiss an unsuitable worker without any liability to pay compensation — these periods may be as long as 180 days for managerial, technical or professional positions. Recruitment and Selection

• At least 90% of the workforce of a company or establishment, excluding directors, administrators and general managers, must be Mexican nationals. Recruitment and Selection

• An employment contract/relationship exists (whatever its form or description, and however it came into being) where an individual performs work in person for another party in a relationship of subordination, in return for payment of a wage. Employment Contracts

• There is no statutory maximum duration of fixed-term contracts or contracts for the completion of a particular task, or limit on the number of times that they may be renewed. Employment Contracts

• Wages must be “rewarding” and take into consideration the quantity and quality of the work performed.

• Maximum normal working time is set at eight hours per day (and thus 48 hours over a six-day week. Workers may work no more than three hours of overtime a day, three times a week, and are entitled to double their normal wage rate for these hours. Working Time, Rest and Holidays

• Workers are entitled to a minimum daily rest break of half an hour and to a weekly rest day, generally on Sunday. Working Time, Rest and Holidays

• Workers are entitled to paid annual leave (starting at six days and increasing with length of service), plus at least seven public holidays per year. Working Time, Rest and Holidays

• Pregnant workers have a right to take 12 weeks of maternity leave, during which they generally receive maternity benefit equal to their full wages, while male workers are entitled to five days’ paid paternity leave. Parenthood and Work-life Balance

• Workers who are unable to work owing to accident or illness are generally entitled to social security sickness benefits, and to sick leave, for up to one year. Parenthood and Work-life Balance

• Employers must not discriminate in relation to employment on grounds including sex, gender, pregnancy, family responsibilities or situation, ethnic or national origin, skin colour, age, disability, state of health, religion, opinions, sexual preferences, social status, civil status, migration status, culture, economic status, legal status, physical appearance, genetic characteristics, language, political identity or affiliation, or criminal record. Equality and Discrimination

• Employers and their representatives must not commit harassment or sexual harassment in the workplace or permit or tolerate such acts. Equality and Discrimination

• Employers must implement, in agreement with workers, a protocol on preventing sex discrimination and sexual harassment and violence. Equality and Discrimination

• A trade union has a right to bargain collectively with an employer if its members represent at least 30% of the workers covered by the proposed collective agreement, and it has obtained an official “certificate of representativeness” to this effect. Once agreed, a collective agreement must be approved in a ballot by a majority of the workers covered. Industrial Relations and Collective Rights

• Only a trade union with a certificate of representativeness covering the workers concerned may call a strike.

• In principle, an employer may dismiss a worker only if there is “justified cause”, which mainly involves gross misconduct by the worker. If an employer dismisses a worker without justified cause, the worker is entitled to compensation or in many cases reinstatement. Termination of Employment

• Workers are in many cases entitled to a “length-of-service bonus” of 12 days’ wages per year of service when employment ends. Termination of Employment

• “Personnel subcontracting” — essentially temporary agency work — is forbidden except where the workers concerned provide specialised services, or carry out specialised work, that fall outside the user company’s core activity. Other Key Issues

• Employers are obliged to provide all workers with initial and continuing vocational training. Other Key Issues

• All companies must have in place “internal work regulations” governing various aspects of employment and working conditions. Other Key Issues