Background Checks

There is nothing in the Federal Labor Law preventing employers from conducting background checks through third parties. In such cases, employers must comply with anti-discrimination and data privacy obligations under applicable laws in Mexico.

Verification and New Hire Reporting

Compliance with social security contributions is non-negotiable and integral to legitimate hiring practices.

• Registration with Social Security
• Register the employee with the Mexican Social Security Institute (IMSS) promptly.
• Ensure that all necessary social security contributions are calculated and timely remitted.

Onboarding Process & Documentation

Collecting Required Documentation

Upon hiring, employers must collect the following from new employees:

• Obtain the employee’s official identification and proof of eligibility to work in Mexico.
• Secure a signed copy of the employment contract before the commencement of work.
• Gather any necessary certificates of education or previous work verification.

Providing Employee Rights and Obligations

• Inform new employees of their rights, including conditions of work and employee rights under Mexican law.
• Ensure that new hires are aware of their confidentiality obligations and any non-compete clauses, if applicable.

Healthcare

In Mexico, the foundation of employee health coverage is mandatory enrollment in the Mexican Social Security Institute (IMSS). Both employers and employees contribute to this system, which provides access to public healthcare services, including medical treatment, hospitalization, maternity care, and sick leave benefits. The employer’s contribution is calculated based on the employee’s salary and the occupational risk classification of the job.

Public Healthcare through IMSS

IMSS offers essential medical coverage, but the public system can face challenges such as:

• Long wait times
• Limited access to specialists
• Overburdened facilities in some regions

Because of these limitations, many employers—especially in professional sectors—choose to enhance their benefits packages with private health insurance.

Private Health Insurance (Seguro de Gastos Médicos Mayores)

Private health insurance is a highly valued benefit in Mexico. Employers may:

• Fully cover the cost of premiums, or
• Share the cost with employees as part of a co-payment arrangement.

These plans typically provide:

• Access to private hospitals and clinics
• A broader network of doctors and specialists
• Faster and more personalized care
• Coverage for major medical expenses not included in IMSS

In many industries—particularly among multinational corporations and large domestic firms—offering private health insurance is considered a standard expectation for attracting and retaining skilled professionals.

Retirement

Mexico operates a mandatory retirement savings system based on individual accounts managed by private financial institutions known as Afores (Administradoras de Fondos para el Retiro). This system is a defined contribution model, where employers, employees, and the federal government all contribute a percentage of the employee’s salary to their personal retirement account.

Contribution Structure

• The employer contributes the largest share of the total mandatory contribution.
• The total contribution rate is set by law and is being gradually increased over time to improve retirement outcomes.
• Contributions are deposited into the employee’s Afore account, where they are invested to generate returns over time.

Purpose and Limitations

The funds accumulated in the Afore account, along with investment earnings, are intended to provide income during retirement. However, for many workers—especially those with lower lifetime earnings—the resulting pension may be insufficient to maintain their desired standard of living.

Supplementary Retirement Plans

To address this gap, some employers—particularly larger companies or those in competitive industries—offer additional retirement benefits, such as:

• Defined contribution plans, where the employer makes extra contributions beyond the legal minimum.
• Defined benefit plans, though these are less common due to their long-term cost and complexity.

These supplementary plans, while representing a significant financial commitment, can be a strategic tool for attracting and retaining experienced professionals and supporting long-term workforce planning.

Social Security

At this time, Vensure does not have social security details.

Employment Contract Details

All employees must receive a written employment contract detailing employment terms, job descriptions, and obligatory provisions as required by law.

Employment contracts must include at least the following information:

• The name, nationality, age, gender, tax and personal identification numbers, and domicile of the employee and employer, as applicable.
• The term of employment (indefinite or for a specific project or period).
• Indication of whether employment is subject to a trial period.
• The services to be rendered by the employee, as well as the position of employment.
• The place or places where the services must be rendered.
• The work schedule and number of hours worked throughout the week, with at least one weekly rest day.
• Compensation.
• Training programmers and requirements.
• The fringe benefits payable to the employee.
• The employee’s beneficiary in case of death; and
• Any other conditions of employment that is not contrary to the law.

Contracts should clearly state the duration (fixed-term or indefinite), working hours, salary, and benefits.

Types of Employment Contracts:

• Indefinite Term: The standard form, which does not specify an end date.
• Fixed-Term: Used for temporary projects or specific time-bound roles.
• Seasonal: Applicable to activities only needed during certain seasons.

All contracts should be registered appropriately, detailing the terms clearly and comprehensively. Ensure that amendments or renewals are documented in writing.

The contract must be in Spanish, regardless of the employee’s nationality.

Probation Period

• Probation periods are up to 30 days for indefinite or that exceed 180 days employment term, a probationary to verify the employee’s qualifications.
• The probationary period may be extended up to 180 days, but only for executive, managerial, administrative, or specialist positions.
• During the probationary period, the employee shall receive a salary, social security and benefits for the position they hold.
• At the end of the probationary period, if the employee does not meet the job requirements, in the opinion of the employer, the employment relationship will be terminated without liability to the employer. Employees may not be terminated unless there is cause as defined by the Federal Labor Law.
• When the probationary period ends and the employment relationship subsists, the duration of the probationary period counts towards seniority.

Visas

• Tourist Visa (FMM): For tourism/business up to 180 days.
• Business Visitor Visa: Short-term business, no work allowed.
• Temporary Resident Visa: For stays over 180 days; requires job offer or financial proof.
• Permanent Resident Visa: For indefinite stay; includes work rights.
• Application Process:
  • Prepare documents (passport, photos, financials).
  • Schedule and attend consular interview.
  • Pay fees and await processing.
  • Register with the National Migration Institute upon arrival.

Independent Contractors

Independent contractors (also known as “prestadores de servicios profesionales”) are not considered employees under Mexican labor law. Key distinctions include:

Legal Status

• Contractors operate under civil or commercial law, not labor law.
• They typically sign a services agreement rather than an employment contract.

No Employment Benefits

• Independent contractors are not entitled to benefits such as:
• Social security (IMSS)
• Paid vacation or holidays
• Severance pay
• Profit sharing

Tax Obligations

• Contractors must register with the Tax Administration Service (SAT) and issue electronic invoices (CFDI) for their services.
• They are responsible for paying their own taxes, including income tax and VAT (if applicable).

Misclassification Risks

• If a contractor performs work under conditions similar to an employee (e.g., fixed schedule, subordination, exclusive service), authorities may reclassify the relationship as employment, triggering back payments of benefits and penalties for the employer.

Paid Time Off

• Employees in Mexico are entitled to a minimum of 12 working days of paid vacation after completing one year of continuous service. This entitlement increases by two additional days for each subsequent year of service up to the fifth year. After five years, the vacation entitlement continues to grow by two days every five years, up to a legal cap of 32 days.
• Unused vacation days can be carried over for up to six months after the end of the year in which they were earned.
• In addition to regular pay, employees must receive a vacation premium of at least 25% extra pay for each day of vacation taken.

Public Holidays

Ensure access to mandatory benefits such as paid vacation, Christmas bonus, and profit-sharing schemes, accurately calculated as per legal guidelines.

• The minimum annual holiday benefit is set at 12 days starting from the first year of employment and will increase by two days each year until the fifth year of employment. After the fifth year, the annual holiday will further increase by two days every five years.
• Holiday bonus of at least 25% above the employee’s salary during the holidays
• Christmas bonus is at least 15 days’ salary and must be paid before December 20
• Employees (with some exceptions) participate in company profits, with a maximum of three months’ salary or the average share of the past three years.

Mandatory Holidays:

• 1 January (New Year’s Day).
• The first Monday of February (Constitution Day).
• The third Monday of March (President Benito Juárez Day).
• 1 May (Labor Day).
• 16 September (Independence Day).
• The third Monday of November (Revolution Day).
• 25 December (Christmas Day).
• 1 December every six years (Presidential Election Day).
• The inauguration day of the newly elected president every six years.

Bereavement

Mexico’s Federal Labor Law does not explicitly mandate bereavement leave. However, many employers grant 2 to 5 days of paid leave in the event of the death of an immediate family member (e.g., spouse, parent, child, or sibling), either as part of internal policies or collective bargaining agreements.

Employers are encouraged to include bereavement leave provisions in employment contracts or workplace regulations to ensure clarity and consistency.

Maternity Leave

• Maternity Leave: Female employees are entitled to 12 weeks of paid maternity leave, divided into six weeks before and six weeks after childbirth. This leave is paid at 100% of the employee’s salary, up to a cap of 25 times the daily UMA (Unidad de Medida y Actualización), and is funded by IMSS. A medical certificate from an IMSS-approved clinic or a private doctor is required to apply.
• In cases of adoption, female employees are also entitled to six weeks of paid leave starting from the date the child is placed in their care.

Paternity Leave

Fathers are entitled to five days of paid paternity leave, which must be taken around the time of the child’s birth.

Parental Leave

Mexico does not currently provide additional parental leave beyond the maternity and paternity leave entitlements.

Sick Leave

Sick leave in Mexico is covered by the Mexican Social Security Institute (IMSS). Eligible employees can receive up to 52 weeks of paid sick leave, compensated at 60% of their regular salary, provided the illness is certified by an IMSS-affiliated medical professional.

If the illness or injury is work-related, the employee is entitled to 100% of their salary during the recovery period, also paid through IMSS.

Termination Requirements

Employees may only be terminated for cause. The Federal Labor Law includes the following list of 15 events that constitute cause:

• Use of false documentation to secure employment (applicable only within the first 30 days of service).
• Dishonest or violent behavior on the job.
• Dishonest or violent behavior against co-workers that disrupts work discipline.
• Threatening, insulting or abusing the employer or his or her family, unless provoked or acting in self-defense.
• Intentionally damaging the employer’s property.
• Negligently causing serious damage to the employer’s property.
• Carelessly compromising safety in the workplace.
• Immoral behavior in the workplace (including harassing, sexually or otherwise, any individual in the workplace).
• Disclosure of trade secrets or confidential information.
• More than three unjustified absences in a 30-day period.
• Disobeying the employer without justification.
• Failure to follow safety procedures.
• Reporting to work under the influence of alcohol or non-prescription drugs.
• A prison sentence that makes it impossible for the employment relationship to continue or failure to deliver documents required by law to provide the employee’s services.
• The commission of any other acts of similar severity.

Notice Period

A notice of termination is not required for terminations without cause (these instances are generally documented by a resignation letter). In the case of terminations for cause, employers are required to provide a written notice describing the conduct that triggered the termination and the date on which the conduct occurred or notify the applicable labor board in writing of the cause of termination within five days of the date of termination. Payments in lieu of termination notices are not allowed under the Federal Labor Law.

Severance Pay

Severance pay upon termination of employment without cause, but no severance pay applies to terminations with cause. As a general rule, in the event of a termination without cause, the employee is entitled to accrued wages and benefits;

• Three months of integrated salary.
• And a seniority premium of 12 days of salary for each year of service (capped at twice the minimum salary).

Also, an employee dismissed without cause is entitled to claim his or her reinstatement. If an employee prevails in a lawsuit for wrongful dismissal, in addition to the employee’s reinstatement, the employer will be liable for back pay as of the date of the dismissal with a one-year cap (plus a 2 per cent monthly surcharge thereafter).

The employer may avoid reinstatement by making an additional severance payment for an amount equivalent to 20 days of integrated salary per year of employment.

Unemployment Insurance

To qualify for the SSS Unemployment Benefit, a member must:

• Be involuntarily separated from employment due to authorized causes under the Labor Code (e.g., redundancy, retrenchment, business closure, disease, or calamities).
• Be under 60 years old at the time of separation (exceptions apply for certain professions like miners and jockeys).
• Have made at least 36 monthly contributions, with 12 contributions within the 18 months immediately before separation.
• Not have claimed unemployment benefits in the last 3 years.
• Be actively seeking reemployment and not terminated for just causes (e.g., misconduct, fraud, or gross neglect).

Benefit Amount and Duration

• The benefit is equivalent to 50% of the member’s average monthly salary credit (AMSC).
• It is paid in a lump sum and covers a maximum of two months.

How to Apply

• Log in to your My.SSS account at sss.gov.ph.
• Navigate to the Benefits tab and select Unemployment Benefit.
• Provide the required information, including your disbursement account.
• Submit supporting documents such as:
  • Certificate of Involuntary Separation from DOLE
  • Notice of Termination from employer
  • Valid ID

Limitations

• Employees terminated for just causes (e.g., serious misconduct, willful disobedience) are not eligible.
• Employees on floating status (temporarily laid off but not officially terminated) are also not considered involuntarily separated.

Anti-Discrimination Practices

The Federal Labor Law expressly prohibits discrimination in the workplace based on ethnic origin, citizenship, gender, age, disability, social status, health conditions, religion, opinions, sexual preference, marital status or any other circumstance against human dignity, and it prohibits sexual harassment in the workplace. Further, the Anti-Discrimination Law may be relevant if an individual believes that he or she has been discriminated against in an employment setting.

Under equal circumstances, employers are required to give preference in hiring to:

• Mexican over foreign nationals (only 10 per cent of the employees of a single employer can be foreign nationals).
• Employees with a longer length of service with the employer.
• Individuals who are economically responsible for their families and whose employment is their sole source of income.
• Individuals who have completed the obligatory basic education.
• Trained individuals.
• Individuals with the skills and knowledge required for the job; and
• Unionized employees.

Workplace Safety Standards

In Mexico, employers have substantial legal responsibilities to protect the health and safety of their employees. These obligations are outlined in the Federal Labor Law and further detailed in the Official Mexican Standards (Normas Oficiales Mexicanas or NOMs), which are issued by the Ministry of Labor and Social Welfare (STPS).

Core Employer Duties Include:

• Creating and maintaining a safe and hygienic work environment that minimizes risks to employees.
• Implementing preventive measures to avoid workplace accidents and occupational illnesses.
• Providing appropriate safety equipment and training to ensure employees understand and can manage workplace hazards.
• Conducting regular risk assessments and applying necessary control measures to mitigate identified risks.
• Complying with relevant NOMs, which vary by industry and type of hazard (e.g., fire safety, electrical systems, hazardous materials, ergonomics).
• Investigating workplace incidents and reporting them to the appropriate authorities as required.
• Establishing joint health and safety committees (Comisiones Mixtas de Seguridad e Higiene) in workplaces with more than 15 employees to monitor and promote compliance.

Failure to meet these obligations can lead to significant penalties, including fines and potential legal liability in the event of workplace accidents or injuries.

Workers’ Compensation

A working accident (or occupational accident) happens when an employee suffers an organic injury, malfunction or even death caused because of the activities performed at work. An occupational illness is considered a pathological state derived from the activities performed during work.

Employees who suffer a work-related accident or illness shall be entitled to:

• Medical and surgical assistance.
• Rehabilitation.
• Hospitalization, when required.
• Medication and curative materials.
• Necessary prosthetic and orthopedic devices; and
• An indemnity.

In the event of a work-related accident or illness, employers must provide employees medical attention, rehabilitation, hospital services, medicines etc. In order to meet these obligations, employers register the employees with the IMSS, which assumes such obligations provided the employer pays the corresponding contributions in a timely manner. Under Mexican Social Security Law, employees receive payment of a subsidy from the IMSS equal to 100% of their salary during the time of disability for up to 52 weeks. If the employee recovers prior to 52 weeks and returns to work, or if permanent disability is determined, the payment ceases.

Labor Law Sanctions

Federal Labor Law (FLL) Sanctions: Mexico’s Federal Labor Law imposes penalties for violations such as: Failure to pay minimum wage can result in fines based on the Unit of Measurement and Update (UMA). Non-compliance with working hours, overtime, or benefits (e.g., vacation, profit-sharing) may lead to fines, labor court orders, or back pay. Unlawful termination or failure to follow due process can result in reinstatement orders or severance payments.

“Ley Silla” and App-Based Worker Protections: The Chair Law (Ley Silla) requires employers to provide seating for workers who perform standing tasks. Non-compliance may lead to labor inspections and fines. App-based couriers and gig workers are now recognized as employees, meaning companies must provide benefits like social security and paid leave. Failure to comply can result in sanctions from labor authorities.

Profit-Sharing (PTU) and Social Security: Companies must distribute 10% of taxable income to employees annually. Missing the May 31 deadline or underpaying can lead to fines and audits. Employers must also comply with IMSS (social security) reporting and risk premium updates. Failure to report occupational risks can result in penalties and increased insurance costs.

Union Rights and Collective Bargaining: Under recent reforms, employees have the right to freely join unions and vote on collective agreements. Violations of union rights or use of “protection unions” can lead to nullification of agreements, fines, and legal action through Mexico’s new Labor Courts.