General Employee Rights in Mexico
Employment contract
It is mandatory that employers provide employees with an employment contract that meets the local standards. Mexico has five different types of contracts:
- Contract for a specific period of time:
A fixed-term contract may be stipulated only when required by the nature of the work to be performed or only when it is intended to temporarily replace another employee.
2. Indeterminate term contract:
This includes indeterminate employment relationships or those that exceed 180 days. A trial period may be established, which may not exceed 30 days, for the sole purpose of verifying that the employee meets the requirements and knowledge necessary to perform the work requested. It is important to clarify that the trial period may be extended up to 180 days but only in the case of management positions, managerial positions, and other positions occupying which persons perform management or administrative functions.
3. Trial period contract:
In the case of trial periods, which may last for 30 and up to 180 days for administrative, technical, or specialized jobs, if the employer decides not to continue the employment relationship at the end of this period, the employer must consider the opinion of the Training and Productivity Commission in order to dismiss the employee.
4. Contract for initial training:
An employment relationship for initial training is considered to exist when workers are obligated to render subordinate services under the direction and command of their employers, with the purpose that workers acquire the knowledge or skills necessary for the activity for which they are going to be hired. This type of contract has a maximum duration of three months unless it is to fill a managerial position in which case it may have a duration of up to six months. When the trial or initial training period is concluded and the employment relationship continues, it is considered an indeterminate term contract.
5. Contract for temporary employment relationship:
When the services required are periodic (e.g., seasonal activities or activities not rendering the services for the entire week/month/year), it must be made clear that workers rendering such services have the same rights and obligations as workers with indefinite term contracts, in proportion of the time worked in each period.
An employment contract must include the following:
- name, nationality, age, sex, marital status, Unique Population Registry Code (CURP), Federal Taxpayers Registry (RFC), and address of the employee and the employer
- statement whether the employment relationship is as follows:
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- specific work project
- project for a specific period
- seasonal project
- initial training for an indefinite period of time and if so whether it is subject to a probationary period
- place(s) where the work is to be performed
- service(s) to be rendered, which is to be determined as precisely as possible
- duration of the working day
- form of remuneration and salary amount
- salary payment day and place
- indication that the worker will receive training on the company’s terms, plans, and programs
- other working conditions (e.g., rest days, vacations, etc.) agreed upon by the parties
- designation of beneficiaries for the payment of wages and benefits accrued and not collected upon the death of the worker or those generated by the worker’s death or disappearance derived from a criminal act
Payslip
It is mandatory that employers provide employees with an itemized pay slip weekly or biweekly, as the case may be, breaking down the overtime pay, bonuses, paid vacation, illness, gross salary, net salary, and social security contributions. The monthly pay slip must also show the annual leave accrued. Employees have a right to request copies of their salary and time records breaking down information such as days or hours worked, wage paid weekly or biweekly, and the method of calculating the wage.
Right to disconnect
Employees have the right to disconnect from work after working hours, which prohibits employers from contacting employees then. To respect the employee’s private life, the working-from-home arrangement must establish availability periods where the employer can contact the employee by phone. Outside of these time slots, the employee is under no obligation to respond to requests from the employer.
Profit sharing
All employees who perform subordinate personnel work for an individual or a company and get paid a salary are entitled to participate in the profits of their employers.
Employees not entitled to receive profit-sharing payments are listed below:
- directors, general managers, and administrators
- temporary employees who have worked for less than 60 days
- partners and shareholders
- collaborators under a fee-based payment scheme (because no subordinate employment relationship exists)
- domestic employees
Profit sharing (i.e., distribution of profits) must take place within 60 days after the date on which the annual tax return is due before the Tax Administration Service (March 31 for companies; April 30 for individuals).
Profit sharing is 10 percent of the taxable income generated in the immediately preceding year, based on the information reported by the company in its annual tax return.
Employee Protections in Mexico
Protection from harassment
Employees are protected from sexual and psychological harassment as well as from sexist behaviour.
A fine for the equivalent of Mex$24,055.00–Mex$481,100.00 shall be imposed on the person who performs acts of sexual harassment or who tolerates or allows acts of sexual harassment or harassment against employees.
Anti-discrimination
Employers are forbidden from discriminating employees throughout the employment relationship — from the recruitment process to the termination of employment — on the following grounds:
- ethnic or national origin
- gender
- age
- disability
- social status
- health conditions
- religion
- migratory status
- opinions
- sexual preferences
- marital status
A fine for the equivalent of Mex$24,055–Mex$481,100.00 shall be imposed on the employer who commits any discriminatory act or conduct in the workplace.
Data protection
All employers are responsible for the processing of their employees’ personal data and must comply with such protection regulations from the moment their employees are hired and during the term of the employment relationship.
Therefore, employers must (1) prepare a privacy notice focused on employees and (2) make it available to their personnel (owners of their personal data) prior to hiring them.
Personal data is any information concerning an identified or identifiable person (name, address, CURP, RFC).
Likewise, in order to comply with certain employer obligations, the employer may have to collect sensitive information, such as the following:
- racial or ethnic origin
- present and future health status
- genetic information
- religious, philosophical, and moral beliefs
- union membership
- political opinions
- sexual preference
To handle personal data, a company must obtain the express consent of the employee with either a handwritten or an electronic signature, the acknowledgement of the email receipt, or any mechanism proving the delivery of the privacy notice.
The purpose of the notice is to ensure employees (owners of their personal data) know the terms and conditions of the guidelines for the collection, use, exploitation, storage, transfer, disclosure, and disposal of the data.
In the event of improper treatment of personal data, the employer may be subject to a penalty equivalent to Mex$200–Mex$320,000 times the UMA value.
Required Employee Benefits in Mexico
Pregnancy rights
Employers or their representatives are forbidden to dismiss a female employee, directly or indirectly coercing her to resign because she is pregnant, has a change of marital status, or is caring for minor children.
Sickness and maternity
Sickness and maternity insurance provides affiliated workers with the necessary medical care during treatment or pregnancy, as well as the economic and in-kind benefits that correspond to them.
Sickness pay percentage: 60% of the salary registered before IMSS, at the beginning of the incapacity.
Percentage of payment for maternity: The sick pay rate is 100% of the salary registered before IMSS, at the beginning of the 34th week of gestation, for the total number of days covered by the certificate of maternity disability.
During the nursing period of six months, the new mother is entitled to two additional 32-minute rest periods per day to feed the child in an adequate and hygienic place set aside by the employer.
Vacation bonus
This is an economic benefit (an amount of money) that must be granted to all employees so that they can enjoy their vacations.
This payment must be a minimum of 25% of the employee’s monthly salary and is calculated on the salary plus the amount corresponding to the vacations.
Christmas bonus
All company employees, without exception, must receive this extra amount of money in proportion to the days worked. The Christmas bonus must be granted no later than December 20 of each year and should for a minimum of 15 days of salary. If employees have been with the company for less than one year, they are granted the proportional part of the time they have been working.
This benefit may be granted in cash only and not in kind or in food vouchers.
The monthly salary, the date the employee started working, and the days missed by the employee (if any) must be considered in order to calculate the amount to be paid for this labour benefit.
