- Overview: Mexico
- Global HR Compliance
- Global PEO and payroll
- Work permit for hiring expats via PEO
- Expand without a company set up
- Contractor vs. employee: which is better?
Global HR Compliance in Mexico
If you hire an international workforce, or plan to hire, then Hiring and Firing Workforce in Mexico Guide below will help you understand the nuances of labor legislation in the country.
When the company is planning to enter a new foreign market of Mexico and has a need to employ a local national there, the first question to answer is how it is going to make local hires.
We have designed a Global Employer of Record service to help you outsource global employment of your foreign workforce to companies like ours.
This solution helps you employ your global sales force in Mexico as well as in other 180+ countries of the world, and provide pay and benefits to your employees, as well as administer any business expenses with our help.
Our solution is different from other hiring modes in that it helps you engage your foreign workforce in full compliance with the local labor legislation. This means you are protected from any non-compliance and employee misclassification risks while we bear all employment risks, not you.
So, it looks very much like hiring your in-house sales force in your home country. However, you focus on only on your global business development while we admin your global HR. In addition, you don’t need to open your own entities in the foreign countries and can leverage our infrastructure in Mexico instead. With our service, you can become a global company with reduced costs and minimized time and effort on your end.
Your employed foreign sales force will devote 100% of their time to your company product and may stay with you longer than foreign independent sales reps.
Global Employer of Record solution is 100% compliant solution that guarantees you and your employees fully compliance with local legislation in Mexico .
We are experts in global workforce employment in Mexico, and our goal is to become your single provider. Instead of working with numerous local staffing agencies and legal advisors, Acumen International can solve your global business challenges and save you time, costs, and resources.
Our team of English-speaking professionals frees you from working through language nuances. Acumen International works 24/7 and can assist you whenever you need, regardless of time zones. Our goal is to create tailored labor solutions for you that are managed legally and in full compliance with the local employment laws.
With our knowledge and deep understanding of local nuances, you easily satisfy your need for skilled professionals in your global industry. With our qualified local partners, you can trust that your global workforce satisfies all local tax, social security, and immigration requirements in Mexico.
Hiring and Firing Workforce in Mexico Guide
There are two main types of employment contract that exist in Mexico and they are permanent contract and temporary contract. Other types of contract usually used by employers are initial training contract, specific-task contract and probation contract. An employer and employee can enter into a contract verbally or in writing, though it is recommendable to always have it drawn up in writing. According to the Federal Labor Law of Mexico, a contract must include specific information such as:
- personal details about each of the parties: name, address, gender, age, nationality, status);
- details about the job: location, employment type, employee’s position and duties, commencement date, hours of work, remuneration package, terms of notification and conditions of employment based on collective agreement (if applicable).
Written contracts are usually drawn up in Spanish, and translated into any other language that the employee speaks, if he is not a Mexican.
Minimum statutory employment rights
# Hours of work
Most employers in Mexico follow a 40-hour workweek system, although the legal work time per week based on the FLL is 48 hours and 8 hours per day. For shift workers, the legally approved hours they can work are 8 hours (from 6 am to 8 pm) during the day, 7 hours (8 pm to 6 am) during the night and 7.5 hours for swing shift (with not more than 3.5 hours worked between 8 pm and 6 am). Regular employees are entitled to a full day of paid rest on a weekly basis, while shift workers must be given the minimum of 30 mins rest per work shift.
# Probation period
Trial period may be given to new employees with more than 180 days’ contract in order to assess their fitness for the job. While for employees that are taking up professional, managerial or technical functions probation may last from 30 up to 180 days.
# Annual leave
Employees officially have the right to time off during the legal holidays of New Year’s Day, Constitution Day, Benito Juarez Day, Labor Day, Anniversary of Battle of Pueblo, Independence Day, Day of the Dead, Revolution Day, Presidential Inauguration Day, Christmas Day and local/federal election days. In addition to that, employees are eligible for 6 days of paid annual leave at the completion of the 12 months of his/her employment and it is increased by 2 days for the following three years. An employee is entitled to an extra 2 days calculated for every 5 years of employment, after his annual leave entitlement has reached 12 days (4 years). Annual vacation must be used no later than 6 months from the year it was given. Employees are entitled to receive their regular pay plus a 25 percent premium of it during their vacation. Also, employees have the right to request for payment in lieu of his/her annual vacation.
# Parental leave
Maternity leave benefits are paid by IMSS to pregnant employees (who have met up with its requirements) during their childbearing, 6 weeks before their delivery and 6 weeks afterwards. It is a common practice for employees to carry over up to 4 weeks of their prenatal leave to postnatal leave, thereby reducing the formal and increasing the later. In general, maternity leave can be extended by 2 weeks in case of the child’s disability or other medical issues. New mothers are required to be provided with a daily one-hour break to take care of their baby. Adopted mothers are entitled to 6 weeks of paid leave. Fathers are entitled to 5 days of paternity leave at the child’s birth or adoption.
# Sick leave
Employees who are not fit to carry on with their daily duties in the workplace because of sickness are entitled to 52 weeks’ sick leave and a 26-week extension of for very serious illness. Sick leaves are usually paid from the 4th day of sickness, at 160 percent of the employee’s regular wage. Sick leaves are paid for by Mexican Social Security Institute (IMSS), providing the employee has contributed to the system at least 4 weeks before his/her sickness.
Employees who are 16 and above are legally allowed to work overtime. Eligible employees cannot work more than 3 hours overtime a day and more than 3 days in a row. Overtime must be paid at a double rate of the employees’ hourly pay throughout the first 9 hours of weekly overtime and at a triple rate thereafter. Also, employees are compensated at 25 percent premium for working on the statutory rest day and at a double rate of their hourly pay on holidays.
# State minimum wage
Effective in March 2017, the minimum wage in Mexico is 80.04 MXN per day. With the exception of manual workers whose payments are made weekly, employees are remunerated on the 15th day of every month on the work premises.
# Employment termination
Employer-employee relationship may be ended on just cause if the employee exhibits any of the following: dishonesty, falsification of documents and other criminal activities, misconduct and negligence at work, breach of confidentiality, more than 3 times unexcused absenteeism within 30-day period. Employees must be notified in writing before the intended dismissal date, and must be dismissed within one month of exhibiting the behavior that led to the consideration of the dismissal, otherwise it will be considered invalid. Employees with 20 or more years of service with the employer may be dismissed on the account of recurrent or grievous offence.
Employees also have the right to end the employment contract on just cause by resigning. In this case, the employer is obligated to compensate him/her by paying an amount that equals to his/her 12 days’ wage for each year of service in the company, paying him/her any unused vacation and prorated bonus equivalent to 15 days of his/her regular pay. An employee has the right to file a suit at dismissal against the employer.
Acumen International can help you fast-track your possibilities of entering and expanding your business in Mexico by providing you with an Employer of Record services. Our unique mix of PEO/EOR solutions will enable you to jumpstart your global operations almost immediately, cost-effectively and compliantly without you having to set up a legal entity there.