The Mexican Federal Labor Law (Ley Federal de Trabajo) and the Mexican Social Security Law (Ley de Seguro Social) provide the legal framework that governs Mexican labor rules in accord with Article 123 of the Republic of Mexico’s Constitution.
Mexican Labor Rules and Mexico’s Federal Labor Law
Mexican labor rules are governed by its Federal Labor Law. The law spells out the rules and regulations related to the role and function of labor courts, workers’ unions, and conditions of employment of individuals. The rules and regulations of the law also contain a table of regional minimum wages that are paid for different types of employment that is performed in the country’s various economic regions.
“At will” employment does not exist in Mexico. In order to terminate a worker, the company for which an individual is employed must have “just cause” for doing so.
Among the causes that are deemed “just” according to Mexican labor rules are:
- Depletion of the resource in an extractive industry;
- Company bankruptcy;
- Worker mental or physical disability;
- Mutual consent between company officials and worker;
- Death of the worker or the employer;
- Completion of contractually defined work.
The right to have a case heard in labor court exists for workers that believe that they have been let go without “just cause.” As a result of labor court proceedings an individual may be resume work at his or her job or may receive a financial award.
Also, Mexico’s Federal Labor Law defines other features that are not present in US labor law. These include a variety of issues having to do with:
- Vacation premiums;
- Severance pay;
- Profit sharing;
It is specified that, according to Labor Relations in Mexico, work contracts be in a written format, and are made between employers in Mexico and collectives (unions) and/or individual workers. The four types of labor contracts in Mexico include:
- Indefinite-term contracts – Indefinite term agreements are the most common type of contracts in Mexico. They must be implemented when an individual is going to work for an employer for a period of more than 180 days. These contracts can be preceded by a month-long training contract. Unless otherwise stated it is presumed that an employee that works for a month for an employer is presumed to be a permanent employee. It is also important to remember that the training period agreement can be extended for up to 180 days.
- Seasonal employment -This type of contract is used in situations in which work is discontinuous, or when the required services are for a specifically defined period and duration.
- Training/trial period contracts -This class of agreement is used when contracting a worker for an initial training period. Under such an agreement, a worker gives his or her consent to be given an opportunity to acquire the skills that would lead to subsequent full-time employment. Under Mexican labor relations, training contracts can last up to a period of thirty days.
- Measurable contracts –This type of contract is used to govern labor relations in Mexico for individuals that a hired for a specific period, or who are hired to deliver certain finite services.
Mexican labor rules also call for one day of rest weekly be provided to workers. Typically, this day is Sunday. If a laborer works on Sunday, however, he or she will receive a bonus of twenty-five percent of the day’s customary salary. In Mexico, the work week is forty-eight hours, but employees are paid for fifty-six. This includes remuneration for unworked hours on Sunday.
Mexican labor rules as spelled out in the Ley Federal de Trabajo include provisions related to employee vacations. Under the law, each worker is entitled to:
- A bonus of twenty-five percent of weekly salary;
- Six days of paid vacation after one year of work;
- An additional two days annually for every year of service until the end of the workers fourth year with the employer;
- Two days of paid vacation for every additional five years with a company.
Companies are also required to pay Christmas bonuses to their staff, under the rules that are found in labor relations in Mexico. Additional, “special” bonuses are also paid. Among them are extra pay for productivity, punctuality and perfect attendance.
Mexican Labor Rules and Mexican Social Security Law
The Social Security Law, or Ley de Seguro Social, also applies to Mexican labor relations. IMMS, Mexico’s Social Security Institute is the largest government social security organization in Latin America. IMSS was founded in 1943, and is split into five units that deliver services and benefits to Mexican workers. Among them are benefits related to:
- disability and life insurance;
- employment related risk;
- illness and maternity.
For additional information on labor relations and such legal issues in Mexico the reader is encouraged to view our blog at http://tecma.com and review Tecma’s Shelter Services that discuss specifics of how companies foreign to Mexico are operating factories successfully in Mexico.