If you manage employees in Mexico, there are 2 categories of labor law that govern regulations for employers – the Federal Labor Law and Social Security Law. The labor law defines the rules and regulations pertaining to labor courts, labor unions, and labor relations. It also enlists the total wages for specific and general work that may vary according to the economic region. The labor laws in Mexico provide protection to employees. Here are some of the policies to be aware of as an employer in Mexico:
Working Hours and Time Off
Employees in Mexico are entitled to one full day of rest while the other days of the week are considered working days. Employees are required to work no more than 48 hours per week, although some companies may set the limit to 40 or 45 hours per week. There are three work shifts including a day shift (8 hours), night shift (7 hours), and a mixed shift, which is a part-day and part-night shift (7 1/2 hours). Hourly wages can be doubled or tripled, depending on the number of hours exceeding the set time limits, with excess hours worked paid at triple the normal rate.
Minimum Wage and Salary Review
The labor laws mandate a minimum daily wage for each of the categories of services based on regional minimum wages. The law also dictates an annual review of salary disbursement and increments.
The employer is required to register employees with the Mexican Institute of Social Security, which is responsible for medical and other healthcare for employees.
Paid Holiday and Annual Leave
Apart from the official holidays, employees have the right to paid annual leave, which should not be fewer than 6 working days. The number of annual leave days increases for every year the employee continues to work.
An employer does not have the right to unlawfully dismiss an employee. However, in the event of getting fired without a reasonable cause, the employer must pay the employee three months of salary prior to employment termination.
In Mexico, there are two types of contracts. One is a collective contract, which is the same for everyone and is negotiated between the labor union and the employer. The other one is an individual contract, where each employee negotiates the terms and conditions of the contract with the employer.
Employers are required to deposit a sum equivalent to 2% of the employee salary into the retirement account as part of retirement savings.
Labor unions are recognized under federal law and are made to protect the common interests of the workforce. Any decisions made by the labor unions are discussed with the employer. However, the employer is the sole decision-maker for any decisions.
The labor laws in Mexico are designed to protect and safeguard the rights and interests of the employees as well as those of employers. It also includes laws against discrimination and harassment. To learn more about labor law and compliance in Mexico, visit Global People Strategist