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Employment Laws in Mexico

June 22, 2000
Related Topics: Global Business Issues, Featured Article
Foreign owners of maquiladoras often are surprised at the extent of Mexican labor rights.

Even more perplexing is the shadowland between Mexico's exhaustive catalog of laws and their enforcement, which even the strongest advocates of maquiladoras say is often lax.

Nevertheless, U.S. businesses need to assume responsibility for knowing the laws, says Hugh Constant, vice president of the San Diego World Trade Center. Their competitive standing and reputations will hinge on it.

Here's a dozen of some of the most important employment laws and rules in Mexico:

  • Mandatory individual employment contracts
  • Prohibition against discrimination on the basis of race, religion, gender, age, political doctrine, and social condition
  • Comprehensive regulations applying to termination, including rules for justification, notice, and severance pay
  • Mandatory training to improve employees' standards of living and productivity
  • Strict overtime limits
  • 15-days' pay bonus for everyone at Christmas time
  • Profit sharing -- 10 percent of taxable income to all employees
  • 12 weeks maternity leave with full pay
  • Mandatory paid vacations (12 days after 4 years)
  • Collective bargaining with union required if 20 employees are members
  • Full pay to employees while on strike
  • Wage negotiations every year (or more often if conditions warrant)



SOURCE: Dennis R. Briscoe, professor of international human resources management, University of San Diego

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