Currently, several significant labor reforms are under review and discussion by the Mexican Congress. These nine measures aim to improve working conditions for both public and private employees. The goal is to allow employees to enjoy more and better free time, as well as improved compensation. Although only one rule has been approved so far, the proposed changes are noteworthy.

The most prominent proposal is the reduction of the working week from 48 hours to 40 hours to promote a better work-life balance. This change would align Mexico with other countries, including the United States, Japan, Spain, and Italy, that have implemented similar limits. This measure would also contribute to increased hiring in the private sector and higher payments for overtime and Sunday work bonuses.

Another significant change involves the holiday bonus, which will increase by 50% and be payable at the start of the vacation period. Additionally, paternity leave will be extended from 5 days to 20 days, with the possibility of up to 30 days in case of childbirth complications.

For employees receiving additional payments, the ‘Aguinaldo’ will be doubled to 30 days’ salary. Consequently, companies will need to renegotiate contracts and costs. Additionally, the Seniority Premium, currently equivalent to 12 days’ salary per year of service, will increase to 15 days, and the threshold to access this premium will be reduced to 13 years of service in the same company.

The only approved reform so far, known as the Chair Law, aims to improve the labor environment by requiring companies to provide adequate seating for employees in service, commercial, and similar work centers. The goal is for these seating elements to be used both during work and rest periods throughout the workday.

The government has also proposed an initiative to encourage inclusive workplaces. Companies with more than 50 employees will need to ensure that 5% of their workforce consists of people with disabilities and another 5% of people aged between 50 and 60. This will require some companies to adapt their facilities.

The final reforms address digital application workers and profit sharing. Digital workers will receive the same rights as other employees, including access to Social Security, INFONAVIT loans, and insurance against workplace accidents. The profit-sharing regulation seeks to eliminate maximum limits, aiming to pay 10% of the gross annual profit generated during the company’s fiscal year.

In conclusion, if Mexico’s labor reform initiatives are approved, companies will need to adjust their financial costs, budgeting, labor planning, and compliance strategies in this dynamic economic environment.

Auxadi can guide your company by helping you plan and ensure compliance with the Mexican payroll reforms. Please do not hesitate to contact us to discuss your needs in this market or in the more than 50 countries in which we operate. 

Auxadi can become your ideal partner. We offer a one stop shop value added outsourcing services in the areas of accounting and reporting, tax compliance, payroll management and representation services, among others.