How do Mexican Labor Contracts Function?

Mexican labor contracts are regulated by the Federal Labor Law (LFT). This law states that, in Mexico, employment contracts must be clear, definable and in writing. Specifically, it defines that an individual labor contract is when a person consents to perform work for someone else for an agreed remuneration, time and accordingly to agreed conditions.

Mexican Labour Contracts

In Mexico, there exists different employment contracts depending on the type of labor relationship, which is briefly outlined below:

Measurable Contract

This type of labor contract is used when the person being engaged to complete the work, is being engaged for a specific and definable deliverable and/or set period of time.

Indefinite-term Contract

This type of labor contract is the most commonly used when employing a person full-time without a time of deliverable restriction. Specifically, this type of contract must be used when a working relationship exceeds 180 days and in this case, a trial period of no more than 30 days can be established within the contract framework, which may be extended up to and including 180 days.

Initial Training or Trial Period

This is the type of contract is used when engaging a worker for an initial period of training, specifically the worker is consenting to perform work in order to acquire the necessary skills and knowledge prior to seeking full-time employment. This type of contract has a maximum duration of one month, which may be extended to six months on a case by case basis. When the trial period and/or the initial training is concluded and the relationship persists, the contract is then automatically considered indefinite unless otherwise advised by either party.

Seasonal work

Seasonal work encompasses a working relationship for discontinuous work and/or when the required services are for fixed and periodic duration of a discontinuous nature. This includes cases of seasonal activities and/or activities that do not require work all week, month or yea

Mexican Working Day

According to the LFT, a Mexican working day consists of:

• Daytime between 6am and 8pm. The maximum duration is eight hours.
• Night time between 8pm and 6am hours. The maximum duration is seven hours.
• Mixed day: it includes periods of day and night hours. As long as the night hours are less than three and a half hours. The maximum duration is seven and a half hours.

Termination of Mexican Labor Contract

It is important to know the different causes for termination of a labour contract.

The causes include the following:

• Mutual consent between the parties
• Death of the worker or employer
• Completion of the work or expiration of the term or capital investment
• Mental or physical disability or inability manifest by worker
• Force majeure or unforeseeable circumstances
• Depletion of the resource in an extractive industry
• Ongoing or legally declared bankruptcy.

It is vital that both the company and its workers understand their labor rights and responsibilities. The employment contracts in Mexico require knowledge of the LFT, therefore it is recommended that parties seek expert advice when drafting any type of labor contracts or agreements.

Biz Latin Hub can help you find a good corporate attorney in Mexico

At Biz Latin Hub, our multilingual team of corporate attorneys have deep knowledge of corporate legal requirements and is ready to help you enter the Mexican market while staying on good terms with local authorities. With our complete portfolio of back-office solutions, commercial representations, and tax advisory services, we can be your single point of contact to ensure the success of your business venture in Mexico or in any of the other 15 countries across Latin America and the Caribbean where we are present.

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