Mexico's work schedule operates on a specific standard that generates flexibility within the work week. The intricacies of employee overtime, termination, resignation, and retirement payments are based off of Labor Law stipulations and cooperate with government standards. These are just a few factors of the Mexican Labor Law.
The Mexican Work Day
According to Mexican labor law, the legal length of the Mexican work week depends upon the shift on which an employee renders service. The number of hours attached to each shift is spread over a six day work week that runs from Monday until Saturday. The Mexican work day is divided into three shifts:
The day shift for a Mexican worker is eight hours in length. These hours can fit flexibly within the period of 6:00 AM to 8:00 PM. The number of hours per spend on the job by Mexican day shift laborer is 48 hours.
The night shift in Mexico occurs during a seven hour period worked between 8:00 PM and 6:00 AM. The number of hours constituting the night shift amount to forty-two.
The mixed shift in Mexico is for a period of 7.5 hours, and can consist of hours that are considered part of the day shift and part of the night shift. The night shift component of a mixed shift is limited to 3.5 hours .
As per Mexican labor law, workers are entitled to a thirty minute meal break during each shift. In addition to this, many companies in Mexico provide additional break time in order to help workers to focus and to remain fresh.
Mexican Employee Payroll Factors
Wages in Mexico
Wages in Mexico are accounted for on a daily basis, instead of hourly, and customarily paid out weekly. The daily rate is based on the specific shift the employee works, and any other benefits or factored into their contract. After the minimum wage increase in 2017, averagewages in Mexicofor direct labor manufacturing came out to around $5.83 a day, including benefits. Each work-week shift is provided with the same pay, accounting for the differences in the number of hours worked in the day, night and mixed shift schedules.
Overtime is paid after employees reach the legal number of hours stipulated within their shift. Usually employees in Mexico are paid double for the first additional 9 hours, and then triple the rate of his or her normal salary.
Under Mexican labor law if an employee is terminated, they have the right to file for reinstatement or compensation, and are provided 3 months of wages beginning at the time of dismissal. Until the wages are provided, normal wages accumulated during the days after the event are required to be given. If the file for reinstatement is approved by the courts the employee will receive all the wages that would have been earned throughout the process - the 2012 Mexican Labor Law reform changed the compensation process to limit up to 12 months and a 2% monthly interest over 15 months of salary because of the excessive delays in court proceedings.
When an employee resigns, the employer has to pay the employee the balanced part of the vacation premium and a year-end bonus. If the employee worked for less than one year, the employee is compensated for half of the time they worked. If this period is greater than one year, then the compensation is equal to six months salary of the first year, and 20 days per year for each of the following years. If the employee worked for more than 15 years they receive an additional 12 days salary for each year they worked (calculated on the last salary received prior to resigning). Also, when someone is hired, a personal “AFORE” savings account is created and 2% of their salary for retirement is deposited.
Employees go through INFONAVIT to qualify for a housing loan where 3% of the salary is sent to INFONAVIT (Instituto Nacional para el Fomento a la Vivienda para Trabajadores, or, The National Institute for Development of Living Quarters for Workers) on a monthly basis to support the housing loan. The percentage is also used to create small housing communities for the worker population.
The Mexican work week and employee payroll regulate work hours through shifts and overtime, and provide a standard for employee schedule and productivity. Basic payroll structures follow industry and government standards that carry-out pay for specific events throughout the employee's career.
Attend one of our workshops in Seattle, Houston, or Chicago to find out!
Start your journey into Mexico today!
50+ Questions to ask before expanding into Mexico
Thinking about expanding into Mexico? Step 1 of your due diligence process is answering all of these questions. Over the last 33 years, thousands of companies have used this guide to accelerate their expansion into Mexico.
Start Your Mexico Strategy Today!
Talk to a Tetakawi expert to discover how your company can succeed in Mexico.
Get The Tetakawi Insights Newsletter
Sign up and stay informed with tips, updates, and best practices for manufacturing in Mexico.