Engage In Mexico

Table of Contents

About Mexico

Capital City

Mexico City

Population

As of March 2024, the estimated population of Mexico is 128,455,567.

Currency

The currency in Mexico is the Mexican Peso (MXN). The currency symbol is $.

Exchange Rate Calculator

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Overview

Located in North America, Mexico is a captivating and diverse country that offers a wealth of experiences for travelers. Spanning nearly two million square miles, Mexico is a land of incredible natural beauty, with stunning coastlines along the Gulf of Mexico, the Pacific Ocean, the Caribbean Sea, and the Sea of Cortes. The country boasts dazzling beaches that range from bustling resorts to peaceful and secluded shores, providing ample opportunities for relaxation and water sports. Inland, Mexico showcases a rich tapestry of landscapes, from lush rainforests teeming with exotic flora and fauna to rugged deserts and majestic mountains. The nation’s history is equally captivating, with ancient Mayan and Aztec civilizations leaving behind awe-inspiring archaeological sites such as Teotihuacan, Palenque, and Chichen Itza. Mexico’s vibrant culture is evident in its bustling modern cities, like the bustling capital, Mexico City, which is steeped in history and offers a delightful fusion of art, music, and culinary delights. With its warm and welcoming people, Mexico truly has something for everyone, from adventure seekers to history buffs, and is a destination that promises unforgettable experiences and memories that will last a lifetime.

Employment Relationship

Permanent Employment

In Mexico, permanent employment contracts are those concluded for an indefinite duration. Employment contracts that don't explicitly state the duration are considered to be valid for an indefinite duration. Permanent employees or those who are hired for more than 180 days can be subject to probation. 

Fixed-Term or Specific-Purpose Contracts

Fixed-term or specific-purpose contracts may only be established when the nature of the work demands it or when its purpose is to temporarily replace a worker. The duration of the contract must be explicitly stated and cannot exceed one year.

Temporary Employment Contratcs

Mexico's Federal Labor Law does not distinguish temporary and fixed-term/specific-purpose employment. Such contracts may only be established when the nature of the work demands it or when its purpose is to temporarily replace a worker. The duration of the contract must be explicitly stated in the employment contract and cannot exceed one year. In April of 2021, the Mexican Federal Government amended several provisions of the Federal Labor Law. The goal of these amendments was to generally prohibit employer subcontracting or "outsourcing," which the law defines as "when a natural or legal person provides or makes available their own workers for the benefit of another."

Probationary Period

The Federal Labor Law of Mexico provides for probationary periods when employees are hired on indefinite term contracts or contracts longer than 180 days. Usually, the probationary period cannot last more than 30 days. However, for employees in managerial, technical, or professional positions, it may last up to 180 days. At the end of the trial period, if the worker does not satisfy the requirements and knowledge necessary to carry out the work, the employment relationship will be terminated, without responsibility for the employer. The initial training and probationary periods are non-extendable. Employees can be dismissed without notice during probation. 

Working Hours

Employees may work at most six days in any given week. Working hours must not exceed eight hours per day and 48 hours per week. Working hours during the night shift cannot exceed seven hours per shift.   The working day of minors under 16 cannot exceed six hours a day and should be divided into periods not exceeding three hours.

Holidays / PTO

Statutory Holidays

January 1 - New Year’s Day (Año Nuevo); First Monday in February - Constitution Day (Día de la Constitución); Third Monday in March - Birthday of Benito Juarez (President of Mexico from 1858 to 1872); May 1 - Labor Day (Dia del Trabajo); September 16 - Mexican Independence Day (Día de la Independencia); Third Monday in November - Revolution Day (Día de la Revolución); December 25 - Christmas Day (Navidad). There are additional (optional) holidays observed in some and not all states.

Paid Annual Leave

Employees with more than 1 year of service are entitled to 12 working days of annual leave, which will increase by 2 working days, up to 20, for each subsequent year of employment. As of the sixth year, the vacation period will increase by 2 days for every 5 days of services. Minors under the age of 16 years are entitled to 18 days of annual leave. Employers cannot pay compensation in lieu of annual leave, and the leave must be taken within 6 months of the end of the service year. Employees whose contract is terminated before the end of the year of service will be entitled to remuneration for the annual leave not taken, proportionate to the duration of service during the year.

Sick Leave

The employer is fully responsible for paying the first three days of sick leave. From the fourth day, the Social Security Institute pays either: 60% of the employee’s salary if leave is due to a non-work related illness or accident 100% of the employee’s salary if sick leave is due to a work-related illness or accident Benefits are paid for up to 52 weeks.

Maternity Leave

Maternity leave is fully paid through the Social Security Institute and for 12 weeks or 84 days (42 days before and 42 days after delivery). Women are also entitled to six weeks of paid leave for adoption. To avail herself of cash benefits, a worker must have contributed for at least 30 weeks during the 12 months preceding the date when payment is due to begin. If the child was born with a disability or needing hospital care, leave may be extended with 50% of the worker's salary for a period not exceeding 60 days.

Paternity Leave

Working fathers are entitled to a paternity leave of five paid working days following their child's birth or adoption.

Termination of Employment

Notice Period

In Mexico, there are no minimum notice period requirements. In cases where employment is being rescinded due to the worker's actions (or lack thereof), Mexico's Labor Law dictates that notice must be given to the employee personally and in writing at the time of dismissal or within five working days. It must state the conduct that led to termination and the date at which said acts were committed.  In cases where the employee is terminating employment due to circumstances related to the employer or workplace, the worker may withdraw from employment within the 30 days following the cause of withdrawal. In such cases, the worker retains the right to receive damages from the employer.

Severance Benefits

Severance benefits are paid if an employee is dismissed due to the business's inability to afford the operation, bankruptcy of the employer, or any other unforeseen circumstances unrelated to the employer. The amount of severance benefits paid is as follows: Fixed-term contract of less than one year – wages for half the time of services rendered Fixed-term contract of more than one year –  six months of wages for the first year and 20 days for each of the following years Employment for an indefinite term –  20 days of salary for each year of service If the contract is terminated due to physical or mental disability from a non-professional risk – one month's salary plus an additional 12 days of salary for each year of service If the contract is terminated due to a reduction of staff caused by the implementation of new machinery or methods of work – four months of salary, plus 20 days for each year of service

Social Security

Pension

For full pension, a worker must have attained 65 years of age with at least 1,250 weeks of contributions. If the insured employee has reached the required number of years but not the weeks of contributions, they may withdraw the balance of their individual account or continue to contribute to cover the weeks needed to get a pension. The amount of old-age pension is determined by various factors. The basis is the guaranteed pension, which corresponds to a minimum wage updated annually according to the National Index of Consumer Prices. Pensioners also receive family allowances for dependents – 15% for a spouse, 10% for each child under 16 years, and 10% for each dependent parent if the pensioner has no wife or children.

Dependents/Survivors Benefit

Survivors benefit is provided to the survivors if the insured worker was a pensioner or had at least 150 weeks of contributions by the time of death, and the death must not be the result of an occupational injury. A funeral grant is provided with at least 12 weeks of contributions in the last nine months. The amount paid to a widow or permanently and totally disabled widower is 50% of the projected or actual old-age pension. 20% is given to each eligible child (30% if a full orphan). Benefits are paid by the employer in case of death due to work-related accidents or diseases. The amount paid to a widow or financially dependent widower is 40% of the permanent disability pension the deceased would have been entitled to. 20% is given to each eligible child (30% to a full orphan).

Invalidity Benefit

The Institute of Social Security provides benefits for disabled insured persons. To be eligible for disability benefits, the insured must have paid at least 250 weeks of contributions. For more than 75% disability, 150 weeks of contributions are sufficient. The amount of disability pension is equal to a basic amount of 35% of the average salary corresponding to the last 500 weeks of contributions prior to the disability or 250 weeks of contribution. Pension, including benefits for family and assistance grants, may not exceed the average salary that served as the basis for setting the pension amount. In case of disability due to work accidents or diseases, benefits are paid by the employer. In the case of permanent partial incapacity (decrease in permanent working capacity of more than 50%), the disabled worker will receive a monthly amount depending on the degree of disability at a percentage of full pension. If the assessed degree of disability is 26% to 50%, the employee is entitled to either a percentage of the full pension paid according to the assessed degree of disability or a lump sum of five years of pension. In the event of disability lower than 25%, a lump sum equal to five years of pension is provided.

Taxation of Compensation and Benefits

Personal Income Tax

Residents of Mexico are subject to income tax on their worldwide income, regardless of their nationality. Tax rates vary from 1.92% to 35%. Non-residents are only taxed on income originating in Mexico, and rates vary from 15% to 30%.

Immigration

Types of Visas

Work Permit

Foreign nationals planning to work in Mexico for more than 180 days (six months) must obtain a visitor visa with permission to work. A temporary residence visa allows foreign employees to stay in Mexico for up to four years and a permanent residence visa permits staying in the country indefinitely.  Individuals working for and receiving a salary from a foreign company in Mexico for less than 180 days may do so with a visitor visa with permission to work. The following documents must be submitted when applying for this visa: Passport with valid photocopies of the pages Application form Passport size photo Consular fees Letter of employment Current temporary resident or temporary resident student card

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