OUTLINE
Employment contracts and policies in Mexico
Contract terms in Mexico
Contract extension in Mexico
Fixed-term contracts in Mexico
Working hours in Mexico
Remote work in Mexico
Tailored employment contracts in 100+ countries
Employment contracts in Mexico
Employment contracts in Mexico are an essential part of the hiring process and are regulated by the Federal Labour Law (FLL). These contracts formalise the relationship between employers and employees, outlining the terms and conditions of employment.
In this guide, we will cover everything you need to know about creating a compliant employment contract in Mexico, including contract terms, policies, and the different types of contracts available.
Employment contracts and policies in Mexico
Employment contracts in Mexico must be in writing, as verbal agreements are not sufficient under the law. Written contracts protect both employers and employees by clearly defining the terms of the employment relationship.
According to Article 25 of the FLL, employment contracts must include the following details:
- Employee’s name and personal information.
- Job description and duties.
- Work location.
- Salary, including payment frequency and method.
- Benefits, such as vacation, bonuses, and health insurance.
- Working hours and rest periods.
- Duration of the agreement (if applicable).
- Any probationary or training periods.
Probationary period in Mexico
Probationary periods are allowed under Mexican labour law for specific types of employment contracts:
- For employees hired under an indefinite-term agreement or a fixed-term agreement lasting at least 180 days, the probationary period can be up to 30 days.
- For executive, managerial, or administrative roles, the probationary period can be extended to a maximum of 180 days.
During the probationary period, employers have the opportunity to evaluate the employee’s performance, skills, and suitability for the position. If the employee does not meet expectations, the employer can terminate the employment within this period without the need for severance pay, provided the termination is justified and documented.
Mandatory employment policies
Employers in Mexico are required to establish and maintain written policies that address key aspects of the workplace, particularly as the size of their workforce grows. These include:
- Training and productivity policies: Employers must develop policies to promote employee training, skill development, and productivity improvement. These policies help employees grow professionally while contributing to the company’s success.
- Health and safety policies: Employers are responsible for ensuring a safe working environment by creating and maintaining health and safety policies. These policies must comply with national safety standards and be reviewed annually to address any changes in regulations or workplace conditions.
- Internal work policies: Companies can establish internal work policies to define general workplace rules, such as attendance, conduct, and disciplinary measures. These policies provide a clear framework for expected behaviour and help maintain order within the organisation.
Third-party approval in Mexico
In certain situations, employment contracts require approval from external authorities, such as the labour board. If the employee is between 15 and 18 years old, labour board approval is mandatory. This ensures additional protections for minors, such as limitations on working hours and types of tasks they can perform.
For cross-border employment, labour board approval is also required. This situation typically arises when a Mexican company employs individuals to conduct tasks in another country.
Contract terms in Mexico
According to Mexican labour law, all employment agreements must be in writing. Verbal agreements are not valid under the law and can leave both parties unprotected. A written contract serves as an official document that outlines the working relationship and ensures compliance with legal requirements.
Moreover, employees cannot waive their statutory rights. Even if an employee agrees to terms that contradict their legal entitlements, such as forgoing benefits or accepting wages below the minimum standard, these provisions would be considered null and void. This protection ensures that employees receive mandatory benefits, such as minimum wage compliance, paid vacation leave, social security coverage, and overtime pay for additional hours worked.
Contract extension in Mexico
In Mexico, extending an employment contract, particularly for independent contractors, comes with specific guidelines to ensure compliance with labour laws.
There are no legal restrictions on the duration of a contract with a genuine independent contractor as long as certain conditions are met. To qualify as an independent contractor:
- Multiple clients: The contractor should ideally work with multiple clients, demonstrating independence and avoiding exclusivity with one company.
- Specialised skills: The contractor must possess specific expertise or skills that justify their engagement. This ensures the contractor is hired for tasks that require unique knowledge.
- Non-employee tasks: The company must prove that the tasks assigned to the contractor cannot reasonably be performed by existing employees.
For individuals or companies providing specialised services or works in Mexico, additional requirements must be met to comply with local labour laws. These rules are in place to prevent the misclassification of employment relationships and ensure that such arrangements are legitimate. The government closely monitors these agreements to protect workers and uphold compliance.
Contractors offering specialised services to third parties must register on the Registro de Prestadores de Servicios Especializados y Obras Especializadas (REPSE) platform, managed by the Secretaría del Trabajo y Previsión Social (Ministry of Labour and Social Security). This registration confirms that the services provided are genuinely specialised and not part of the hiring company’s core business activities. It also ensures that the contractor operates independently, without being subject to the hiring company’s direct control or supervision, as would an employee.
If you’re planning to hire talent in Mexico through a workforce provider, it’s crucial to choose one registered with REPSE. A REPSE license signifies that the provider complies with Mexico’s labour and tax laws, particularly those related to outsourcing specialised services. Working with a REPSE-registered provider, such as CXC, ensures workers’ rights, benefits, and protections are respected, while helping your business avoid legal risks or penalties.
To obtain and maintain REPSE registration, contractors must demonstrate that they are up to date with their tax payments and social security obligations. This ensures that contractors operate legally and contribute to government-mandated programs.
REPSE registration is not indefinite. Contractors must renew their registration every three years, providing updated documentation to prove ongoing compliance.
Fixed-term contracts in Mexico
Fixed-term contracts are a common way for employers to hire workers for temporary roles or specific projects. However, these contracts come with specific rules to ensure they are used fairly and in compliance with Mexican labour laws.
A fixed-term contract is an employment agreement where the duration is limited to a specific period or tied to the completion of a particular task. These contracts are ideal for situations where the employer has a temporary need for staff, such as seasonal work or project-based roles.
To legally establish a fixed-term contract in Mexico, employers must meet the following conditions:
- Justification of the role: The employer must provide a valid reason for hiring an employee on a fixed-term basis. This could include replacing a worker on leave, such as maternity or medical leave, completing a specific project or undertaking, and addressing seasonal workforce needs, like holiday shopping.
- Clarity in the contract: The contract must clearly outline the specific duration of the employment, the tasks, or objectives the employee is expected to complete, and any terms related to early termination or extension of the agreement.
Typically, a fixed-term contract automatically ends when the agreed period expires, or the specific task or project is completed. Once the contract ends, the employer is not obligated to provide severance unless termination is handled improperly, or the terms of the contract were not fulfilled.
If the employee continues to perform their duties beyond the end date of the fixed-term contract and the employer does not renew or modify the agreement, the employment relationship is automatically converted to an indefinite-term contract. This means the employee is now entitled to the benefits and protections of a permanent position and the employer must adhere to the regulations for indefinite employment.
Working hours in Mexico
The standard working hours in Mexico are 48 hours per week, typically divided into 8 hours per day over a six-day workweek. However, the law recognises three distinct types of work shifts, each with different limits:
- Day shift: This covers work hours between 6 am and 8 pm. Employees can work up to 48 hours per week under this schedule, equating to 8 hours per day.
- Night shift: This applies to work done between 8 pm and 6 am. The maximum working hours for a night shift are reduced to 42 hours per week, or 7 hours per day, due to the increased demands of working at night.
- Mixed shift: A mixed shift includes hours that overlap between day and night periods. The weekly limit for a mixed shift is 45 hours, or about 7.5 hours per day, to account for the challenges of working across different time zones.
While these are the general rules, specific agreements—such as employment contracts or collective bargaining agreements—may allow for different arrangements, provided they do not violate labour laws.
Overtime in Mexico
Overtime work in Mexico is carefully regulated to protect employees from excessive workloads and ensure fair compensation. Any work performed beyond the standard shift hours is considered overtime. It must be documented and agreed upon, either in the employment contract or through collective agreements.
Employees can work a maximum of 3 overtime hours per day, but only for up to 3 consecutive days.
These limitations aim to prevent overwork and ensure employee well-being. Overtime pay is calculated based on two factors: the total number of overtime hours worked during the week and the number of hours worked after a regular shift in a single day.
- First 9 hours of overtime (per week): Paid at double the regular hourly rate (200%).
- Over 9 hours of overtime (per week): Paid at triple the regular hourly rate (300%).
- Daily limit: The first 3 overtime hours worked after a normal shift are considered double-pay hours. Any additional hours beyond this limit are automatically paid at the triple rate. For example, if an employee works 10 overtime hours in a week, the first 9 hours are paid at double their normal hourly rate, and the 10th hour is paid at triple the rate.
Meanwhile, employees in managerial or executive roles may be exempt from overtime pay and limitations, as their responsibilities often involve irregular or extended hours. However, this should be clearly outlined in their employment contracts.
Working week in Mexico
Monday – Saturday
Remote work in Mexico
Remote work, or teleworking, has become a popular option in Mexico, prompting the government to update federal labour laws to protect the rights and responsibilities of both employers and employees. These regulations apply to any worker who spends at least 40% of their paid working time outside the employer’s workplace, whether at home or another location chosen by the employee. The laws ensure that remote work is clearly defined and managed, creating a balanced and legally compliant arrangement for all parties involved.
To comply with the law, employers must formalise teleworking arrangements in a written employment contract. This contract should state that the employee will be working remotely, specify the percentage of time spent teleworking, and detail the terms and conditions of the arrangement. Key aspects such as working hours, job responsibilities, communication protocols, and performance evaluation criteria must also be included to ensure clarity and accountability.
In addition, employers have significant responsibilities to support their remote workers. They are required to provide, install, and maintain the tools and equipment necessary for employees to perform their duties effectively, such as computers, software, and phones. Additionally, employers must cover telework-related costs, such as internet services, electricity, or any other expenses associated with working remotely. Ensuring safe and healthy working conditions, even in a remote setup, is also an employer’s duty. This might include providing ergonomic guidelines or equipment to minimise the risk of injury. Employers are further expected to implement data protection measures to safeguard sensitive information used by remote workers.
On the other hand, employees also play a vital role in making teleworking successful. They must take good care of the equipment provided by the employer and use it responsibly. Compliance with the company’s policies and procedures, particularly those related to data security and confidentiality, is crucial. Additionally, employees should maintain a suitable workspace that allows them to meet their job responsibilities effectively.
Employers are required to document all teleworking arrangements carefully. This includes keeping written agreements updated and recording any changes in the working conditions.
Tailored employment contracts in 100+ countries
Like all countries, Mexico has its own rules and regulations when it comes to employment contracts — failing to comply can result in serious legal and financial risks for your business.
Thankfully, our team is experienced in drawing up tailored, compliant contracts in Mexico (and more than 100 countries worldwide). And as a REPSE-registered provider, we’re not only licensed but also fully equipped to help your company expand into Mexico seamlessly. Our certification, combined with deep expertise in contingent workforce management, enables us to offer unparalleled support and practical solutions for businesses looking to grow in the Mexican market.
That means that, when you work with us, you won’t need to waste time worrying about whether you’ve got it right. Instead, you can focus on what matters: growing your business.
Compliantly hire employees anywhere with CXC
With our EoR solution, you can engage workers anywhere in the world, without putting your business at risk. No more worrying about local labour laws, tax legislation or payroll customs — we’ve got you covered.
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