 Upon hiring employees in Mexico you must register them with the “Seguro Social” (IMSS). This institution provides medical benefits, disability insurance, subsidized housing and retirement insurance. A big percentage of the payroll will go directly to IMSS (22% approximately).
Employees receive additional benefits such as Aguinaldo (Christmas bonuses) to be paid in December, equivalent to two weeks of pay; annual vacations are paid 6 days for the first year, eight for the second, ten for the third and twelve for the fourth year, thereafter vacation days will increase 2 days for every 5 years. Seasonal workers are entitled to an annual holiday period in proportion of the number of days worked in the year.
Holidays can never be compensated with money. If the employment relationship ends before one year, then the worker will receive remuneration proportionate to length of service.
If the employee has been working for more than 60 days; another benefit is the “reparto de utilidades” (profit sharing) which is a proportional share of the profit made by the company.
Severance benefits include 90 days for the first completed year of employment plus 20 days for each year of employment beyond the first year. If the employee has a fixed contract and worked less than a year, the compensation equals half the time worked.
Employee contracts are a must to safeguard the employer. The contract outlines: Hours, responsibilities, salary and bonus incentives if they differ from the stipulated by law.
Strikes – Employees can walk off the job as a group in a general strike, if labor law has been violated by employer.
All labor demands are settled by arbitration in a prescribed labor court called “Conciliacion y arbitraje” Conciliation and arbitration.
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