Working in Mexico: Key Facts to Know
Mexico is a beautiful and diverse country, with delicious food, a rich culture, and amazing sights. And although many still see Mexico simply as a travel destination, more people are beginning to realize its full potential. With a growing economy, abundance of work opportunities, and a low cost of living, there are now more reasons to move to Mexico than ever.
But a move typically means a new job, and as an employee in a new country it’s imperative to understand its employment laws; that means knowing what your rights are as an employee as well as what is required of you towards your employer and government. This article will cover general workers’ rights, along with what salary and benefits you’re likely to receive.
Payment
Minimum wage in Mexico is $123.22 MXN per day, with a typical workday lasting about 8 hours. However, maximum hours per week change depending on whether you work days, nights, or a mix of both. Dayshift (6 am – 8 pm) is 48 hours, night shift (8 pm – 6am) is 42 hours, and mixed shifts are 45 hours. Any work performed over the regular hours is considered overtime, which is limited to 3 hours per day and should not exceed 9 hours per week. These 9 hours of overtime are paid at double the regular wage. If an employee must perform more than 9 hours of overtime, each additional hour is triple the rate of their regular rate.
To gain an understanding of what the average salary is in Mexico (to make it more relatable, the currency will be translated into the USD equivalent), Statista claims that you’re looking at USD $16,297 per annum. This number was pulled from 2018 however, and there has since been a crash in the MXN currency in 2020. This means that whilst wages within Mexico have risen, they have actually fallen in relation to USD. As long as you’re not buying lots of imports or travelling overseas much, this shouldn’t matter. Afterall, Mexico’s purchasing power parity and GDP per capita has been steadily rising for years.
Employees in Mexico also receive a Christmas bonus which is paid on the 20th of December and equals 15 days of pay. It’s also very common for employees to receive 13th and 14th salaries.
Leave
When it comes to vacation days, a national minimum is required, but many employers and employees come to agreements that provide more. The minimum number of days are 6 but can be to over 14 depending on the employee’s seniority within the company. Like most countries, the more time an employee continuously works for a company the more benefits they’ll likely receive.
Other leaves employees are guaranteed are maternity and paternity. Mothers receive 100% for up to 3 months, while fathers are paid 100% of their salary for 1 week. Although both are paid in full, mothers are paid by social security and fathers are paid directly by their employer.
Contributions
All employees are obligated to make contributions towards social security and income tax. Knowing what will be deducted from your payslip is critical in understanding what your net pay will be.
Contributions go towards sickness and maternity (5.25%), disability and death (1.75%), and layoff and retirement benefits (3.15%). That means a total of 10.15% of employee income goes towards social security. The employer also contributes, but at a much higher rate of 22.75%.
Income tax works a bit differently. Instead of a flat fee, the percentage the employee pays is progressive depending upon income. This amount can be as low as 1.92% or as high as 35% – this payroll guide to Mexico has a complete breakdown.
Termination, Notice, and Severance
For an employee, it’s always important to know what rights and protections you have, because inevitably you will either move jobs, retire, or be terminated. When beginning a new job it’s critical to fully understand the termination procedure, the amount of notice required, and the severance you deserve if you either quit or are fired.
When an employee begins working, they are placed on a probation period which allows for the employer to make sure they have chosen the right candidate for the position. If it turns out that the employee is inadequate for the role they can be terminated without reason. Once the probation period has passed, just cause must be proven to terminate an employee. Although no mandatory process is required, many employers will formalize termination before a conciliation and arbitration court to avoid any complications.
Neither parties are required to provide a notice period.
For voluntary resignation and termination with cause the employee is entitled to receive payment for their benefits. If the employee has worked for 15 or more years, they are entitled to seniority pay which amounts to 12 days pay per year plus an additional 90 days of pay.
Work permit
If you’re a foreigner that plans on working in Mexico, you will need to obtain a visa. If you plan on working for a Mexican company, they will require a residency visa with permission to work. However, working for a foreign company in Mexico only requires a visitor’s visa with permission to work, providing it’s for less than 6 months. Should your planned stay be longer than 6 months, it will be necessary to apply for a Temporary Resident Visa with permission to work.
Visas can take 30 days to process an approval, but from there, the application is passed onto the Mexican consulate which may take another 15 days.
Conclusion
Although salaries in Mexico aren’t as high as in Canada, Western Europe or the U.S, employee friendly labor laws and a low cost of living can make it an attractive country to live in. With benefits including a Christmas bonus, 3 months of fully paid maternity leave (the USA doesn’t require any paid leave), and in many instances a 13th and 14th salaries, the balance or work and life can make Mexico your next work destination. Although Mexico has quite a low amount of vacation days per year, one that is more similar to the hard-working USA, it is common to receive more than this legal minimum.
I hope you got value from this article: Working in Mexico: Key Facts to Know.
