Employing in Mexico

Here are the essential considerations an employer should bear in mind when looking for employees in Mexico.

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Employee Contract

While written contracts are not mandatory to be in Spanish, if a contract is intended to serve as evidence, it must be presented in Spanish before labor authorities.

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Probation Period

The probationary period for newly hired employees ranges from 30 to 90 days.

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Employee Leaves

Annual/Earned Leave — Up to 12 days

Maternity Leave — 3 months

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Payroll

Payroll Cycle

Depending on the terms of their employment contract, Mexican employees have the option to receive payment either on a bi-weekly or monthly basis.

Minimum Wage

The minimum wage in Mexico is MX$ 172.87 per day, except in the Free Trade Zone. Within the Free Trade Zone of the Mexican Northern Border, the minimum wage is higher at MX$ 260.34.

Overtime Pay

In Mexico, overtime is allowed, but it is limited to 3 hours per day and must not surpass 9 hours per week. Employees receive twice their regular pay for overtime up to 9 hours. If overtime exceeds 9 hours, the compensation increases to three times the regular pay. Additionally, for work done on Sundays, employees are entitled to an extra 25% of their regular pay.

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Bonus

In Mexico, the 13th-month pay, commonly referred to as Aguinaldo, is obligatory and must be paid by the 20th of December each year.

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Employee Benefits

Sick Leave

Paternity Leave

Social Security

Housing Fund

Retirement Fund

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VAT

VAT in Mexico is 16%.

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Offboarding & Termination

Termination Process

Both the employee and the employer have the right to terminate the employment.

Notice Period

For permanent employees, the notice period is a minimum of 30 days, while for probationary employees, it ranges from 7 to 14 days.

Severance Pay

When termination is executed with a clause, employees are entitled to all benefits, including prorated commissions up to the termination date, as well as a seniority premium of twelve days' salary for each year of service.

In the event of termination without a clause, employees are entitled to the following lump-sum payment:

• Three months of the employee's total salary.
• Twenty days of an employee's total salary for each year of service.
• A seniority premium of twelve days' salary for each year of service.
• Any benefits that are due to them.

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Visa and Immigration

With a temporary resident visa that includes a work permit (commonly known as a work visa), you can enter Mexico, obtain a temporary resident card, and engage in paid activities within the country. However, it's essential to note that all temporary resident visas with work permits must be requested directly by the employer from the National Migration Institute (INM). Only employers registered with the INM have the authority to apply for a Work Visa on behalf of their employees. This visa is valid for six months and allows for a single entry into Mexico.

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