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Mexican Worker’s Salary:
So what makes up a worker’s salary in Mexico? Well the Federal Work Law (LFT) in Mexico clearly establishes the components that make up a worker’s salary. Specifically, it defines the salary as the retribution that an employer must pay an employee for their work, whereby their remuneration is made up of both a base salary and the following legal benefits:
Overtime
Overtime is an integral part of a Mexicans employee’s benefits package, whereby if an employ works overtime they will be paid 100% more on top of the normal salary for the duration they are working overtime. If the overtime then exceeds a cumulative total of nine hours per week, employers are then required to pay 200% more of the salary that corresponds to the workday.
Annual Bonus
Mexican workers are entitled to a yearly annual bonus, which must be paid prior to December 20 and that must be equivalent to at least 15 days’ salary.
Sunday Bonus
Mexican employees who work on Sundays are entitled to a bonus that corresponds to an additional 25% of the employee’s salary.
Workers Housing
Workers housing applies to all Mexican agricultural, industrial, and mining companies that are required to provide their workers with clean and comfortable workers housing whilst onsite. In addition, companies must contribute 5% of their workers’ salaries to the National Housing Fund (INFONAVITA).
Paid Vacation and Vacation Premium
Employees that have rendered their services for more than one year are entitled to annual paid vacations, which cannot be less than six workdays.
Initially this allowance will increase by two workdays for ever year of subsequent service, and then after the fourth year, the vacation period will increase by two days for each five years of service until it reaches a maximum of 12 days. In addition, employees will be entitled to a vacation premium of at least 25% of their salary corresponding to their vacation period.
Tips
Tips are only applicable only to hotel, restaurant, and bar employees and it corresponds to a percentage of consumption.
Profit Sharing
Employers must pay workers a share of their profits pursuant to the percentage set by the National Commission for the Participation of Workers in Companies’ Profits.
Seniority Bonus
The seniority bonus is equivalent to 12 days of salary for each year of service, provided the employee has completed 15 years of services (and is paid in the event of resignation).
It is worth noting the components mentioned in this article are considered integral to the employee’s remuneration under Mexican labour law; however, it is important to understand that these benefits are the minimum legal requirements that employers must fulfil when hiring staff within Mexico. Some employers chose to provide additional benefits in order to attract and retain the best staff. When trying to understand the full cost of engaging staff and the legal benefits associated with an employee’s salary, companies should seek expert advice from a labour law attorney in order to ensure compliance with the Mexican labour law.
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Contact us today and learn how we can support you in finding top talent or more generally doing business in Latin America and the Caribbean.
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