Mexico: Labour and Employment Comparative Guide

Last Updated: 21 November 2019
Article by Luis E. Díaz Mirón S.
Do you want to compare other jurisdictions?... Click here

1 Legal framework

1.1 Are there statutory sources of labour and employment law?

Yes. Article 123 of the Mexican Constitution outlines general principles of employment law in two main sections: one which applies to employees in general and another which applies to federal government employees. Article 123 also indicates which industries are considered to fall within the federal jurisdiction; all other industries not specifically mentioned are considered to fall within the local jurisdiction.

The Federal Labour Law is the statutory instrument through which these constitutional principles are regulated for employees in general. Although it is a federal law, it is applied by local (state) authorities regarding industry segments that are not reserved to the federal jurisdiction.

The Federal Labour Law regulates the rights and obligations of employees and employers. It also regulates procedural terms and conditions for employment disputes and governs the organisation of conciliation and arbitration boards, which are the administrative entities that resolve employment disputes.

In 2017 a constitutional amendment to Article 123 did away with conciliation and arbitration boards as an administrative entity with jurisdictional capacity, instead creating labour tribunals within the judicial branch to administer and oversee labour and employment disputes. However, the legislative branch is still working on reforms to the Federal Labour Law to accommodate this constitutional amendment; so for the time being the Federal Labour Law as it stands, and the conciliation and arbitration boards, remain in effect.

Federal and local government employees are further subject to specific laws that regulate their labour relationships with the federal and local governments.

1.2 Is there a contractual system that operates in parallel, or in addition to, the statutory sources?

No. The Federal Labour Law sets out certain parameters for determining whether a labour relationship exists, regardless of the existence of a written agreement or even where a written agreement is intended to avoid the creation of a labour relationship. As long as there is subordination between two parties, with an obligation to obey or carry out orders, economic dependence and recurring payment for such services, a labour relationship is presumed, even if there is no written agreement or if there is an agreement that purports to expressly exclude a labour relationship.

1.3 Are employment contracts commonly used at all levels? If so, what types of contracts are used and how are they created? Must they be in writing must they include specific information? Are implied clauses allowed?

Yes. A contract is always presumed at any level of employment when there is a labour relationship. Article 25 of the Federal Labour Law provides a list of basic information that should be included within an employment contract. The general rule is that all contracts are of an indefinite duration; although temporary employment is allowed where the nature of the employment justifies a time constraint or where another employee is temporarily replaced. Contracts may also be time limited where they are associated with a specific project with a defined termination date.

2 Employment rights and representations

2.1 What, if any, are the rights to parental leave, at either a national or local level?

Fathers have a right to five days' paid leave from the date of delivery or adoption.

Mothers have a right to six weeks' pre-natal paid leave prior to the expected delivery date and six weeks' post-natal paid leave from the date of delivery. With a doctor's consent, a pregnant employee can transfer up to four of the six weeks' pre-natal paid leave to the post-natal paid leave period.

Paid leave income is subsidised by Social Security, as long as the employee signed up to Social Security at least a year prior to pregnancy.

In case of adoption, adoptive mothers can enjoy up to six weeks of paid leave from the date of adoption.

During pregnancy, employees benefit from a special mantle of protection. It is prohibited for pregnant women to perform physical labour that requires effort such as lifting, pushing or pulling weight, or that could entail any risk.

2.2 How long does it last and what benefits are given during this time?

See question 2.1

2.3 Are trade unions recognised and what rights do they have?

Yes. Unions are recognised as rightful associations that are protected by the inalienable right of employees to legally assemble. Unions have the right to represent employees in collective bargaining with employers and to represent employees in claims made to the employer.

Unions have special legal standing, given that they are associations with their origin and legal framework within the labour statutes. They need not be constituted through incorporation, as per mercantile or civil regulation. If a union has received a certificate of inscription in the federal or local registry, it acquires legal standing to own property, open bank accounts and act on behalf of registered employees.

2.4 How are data protection rules applied in the workforce and how does this affect employees' privacy rights?

A special federal statute which protects personal information has general application throughout Mexico whenever anyone handles personal information of any other person. As best practice, employment contracts should include a provision on consent to store and handle employees' personal information; though, strictly speaking, the Personal Information Statute excludes special requirements such as a privacy notice or even written consent where the acquisition of personal information is a prerequisite under law within the labour relationship and is necessary for the employer to comply with its legal obligations.

2.5 Are contingent worker arrangements specifically regulated?

There is very general use of business process outsourcing and outsourcing of some or all employees within all types of businesses in Mexico; but there are no special contracts for or provisions on ‘contingent workers'. All workers in Mexico enjoy the same standard benefits and Mexican law has a very clear intent to limit any contract that is not permanent or indefinite in duration. Where companies use outsourcing to fill employee positions or create a subsidiary to act as the employer of all personnel, there is usually an underlying fiscal or tax purpose for such decision.

The Federal Labour Law provides general rules that allow outsourcing, though the details of such provision of services must be regulated and agreed though the contract between the provider and the client. The individual labour agreements will be no different for outsourced personnel than for any other employees.

3 Employment benefits

3.1 Is there a national minimum wage that must be adhered to?

Yes. The minimum wage has been revised annually for over 20 years, though there is legal provision and precedent to revise it more than once in the same year.

As of January 2019, the national minimum wage is MXN 102.68. Also, as from January 2019, a new special minimum wage has been introduced for border cities (specifically for the border with the United States) in the order of MXN 176.72.

3.2 Is there an entitlement to payment for overtime?

Yes. The legal intent is that there should be no overtime; requiring employees to work overtime thus exposes employers to the risk of an administrative fine imposed by the labour secretary. Nevertheless, the Federal Labour Law does contemplate a specific rate at which overtime should be paid. One general rule is that employees should not work more than 48 hours in a seven-day week, with one full rest day for every six days of work. Another general rule is that overtime should not last for more than three hours per day and should not be performed more than three times a week. For the first nine hours of overtime, the payment should include the cost of the hours of work performed plus a payment of 100% of the cost of overtime paid hours. Should overtime exceeds nine hours in a week, all additional hours will be paid at the normal hourly rate, plus a payment of 200% of that cost.

3.3 Is there an entitlement to annual leave? If so, what is the minimum that employees are entitled to receive?

The Federal Labour Law provides for a sliding scale of paid holiday, as set out in the following table.

Seniority (years) Days of paid holiday
1 6
2 8
3 10
4 12
5-9 14
10-14 16
15-19 18
20-24 20
25-29 22

For each day's holiday enjoyed by an employee, he or she should receive the standard payment for that day plus a vacation premium of 25% of the daily wage.

3.4 Is there a requirement to provide sick leave? If so, what is the minimum that employees are entitled to receive?

Yes. Employees can take up to 52 weeks of paid sick leave, as long as they are being treated by Social Security. Social Security is responsible for authorisation, treatment and payment of sick leave.

3.5 Is there a statutory retirement age? If so, what is it?

There is no statutory retirement age. Subject to the satisfaction of administrative requirements, Social Security provides that persons can take retirement from age 60 onwards. However, this is completely voluntary; age is not considered a valid reason to terminate a labour relationship.

4 Discrimination and harassment

4.1 What actions are classified as unlawfully discriminatory?

The Federal Labour Law expressly forbids discrimination based on ethnic origin or nationality, health condition, gender, age, disability, social status, religion, migratory status, opinions, sexual preferences or civil status. Any act that affects an individual's work security based partially or totally upon such considerations will be deemed discriminatory.

The Federal Labour Law also regulates harassment in the workplace, with or without sexual content, as an abusive use of force with a subordinate or a colleague of equal standing which creates a dangerous situation for the victim.

4.2 Are there specified groups or classifications entitled to protection?

The Federal Labour Law has special chapters which protect working minors and pregnant women.

4.3 What protections are employed against discrimination in the workforce?

Discrimination in the workforce is something which labour inspectors commonly check for in case of an inspection. Employees with a credible case of harassment can sue for termination of the labour relationship and severance pay from the employer.

If an employer has enough evidence to prove harassment or discriminatory misconduct by an employee, it should terminate his or her employment; but this does not indemnify the victim.

4.4 How is a discrimination claim processed?

Where an employee commences legal proceedings for discrimination, there is little precedent to guide the courts accordingly. The claim will be processed in the same way as any other claim for termination of employment through which severance pay is sought. As this type of procedure requires the employee to voluntarily terminate the employment first, it is not common.

If an employer has enough evidence to prove discrimination or harassment by an employee, it will serve notice to terminate the relationship and will likely have to defend such termination in court against a claim by that employee for wrongful termination.

4.5 What remedies are available?

The Federal Labour Law provides only for severance pay of three months' wages, complemented by 20 days' wages per year of seniority plus a seniority premium of 12 days' wages per year of seniority, capped at twice the minimum wage. Discretional or punitive damages are not available.

4.6 What protections and remedies are available against harassment, bullying and retaliation/victimisation?

Employees can be advised free of charge by a state-appointed attorney if they wish to file suit against their employer. Different local and federal commissions may further begin proceedings to determine whether there is discrimination in the workplace; while human rights commissions can also launch inquiries into human rights violations in the workplace.

5 Dismissals and terminations

5.1 Must a valid reason be given to lawfully terminate an employment contract?

Yes. In Mexico, termination at will by the employer is not possible. Both a valid (legal) reason for termination and a formal termination notice procedure for the employee are legal requirements.

5.2 Is a minimum notice period required?

There is no minimum termination notice period; termination can be effective immediately, but the employer only has one month to terminate the employment relationship from the point of learning of the cause for termination.

5.3 What rights do employees have when arguing unfair dismissal?

Employees can file for reinstatement or for severance pay due to wrongful termination.

5.4 What rights, if any, are there to statutory severance pay?

Severance pay for wrongful termination amounts to three months' wages, plus seniority premium (see question 4.5). If the employee seeks reinstatement, in specific situations the employer can opt not to reinstate and pay an additional sum of 20 days' wages per year of seniority.

If an employee sues, there is an additional contingency due to the accumulation of accrued wages during the trial for up to one year. After one year, wages no longer accrue; instead, a legal formula applies to calculate a severance pay that is equivalent to 25% of the value of the daily wage.

6 Employment tribunals

6.1 How are employment-related complaints dealt with?

Local and federal conciliation and arbitration boards serve as de facto tribunals that oversee labour and employment claims and procedures. However, this regime is in the process of being overhauled; see question 1.1.

6.2 What are the procedures and timeframes for employment-related tribunals actions?

Black-letter procedural law indicates that employment proceedings should not last more than six months. However, given the backlog in cases, procedures normally last between two and four years.

7 Trends and predictions

7.1 How would you describe the current employment landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?

The ongoing legislative overhaul (see question 1.1) implies that there will be considerable procedural changes in the near future. There has already been a constitutional amendment to replace the conciliation and arbitration boards with labour tribunals under the judicial branch. Conciliation will now be handled before trial through a compulsory pre-trial conciliation meeting. The same entity that will be responsible for conciliation will become a national registry for all unions and collective bargaining agreements.

8 Tips and traps

8.1 What are your top tips for navigating the employment regime and what potential sticking points would you highlight?

The Mexican market can seem to be very employer oriented, but legislation and court precedents are very protective of employee rights. It is important to keep this in mind, and to be proactive and keep a close eye on compliance throughout recruitment, contracting and eventual termination of employee relations. Ensuring a healthy working environment and prioritising compliance and employee welfare, with market-consistent benefits, is the best way to prevent labour disputes from arising and achieve a corporation's full potential.

When terminating employees, it is often more cost effective to pay legal severance and execute a termination agreement than to enter into a labour dispute, given that the trial contingency often exceeds the initial cost of severance and the courts will seek whenever possible to benefit the employee.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions