Employment relationships in Mexico are primarily governed by the Ley Federal del Trabajo (LFT), which implements Article 123 of the Mexican Constitution. It is supported by the Social Security Law (administered by the IMSS), the INFONAVIT housing-fund law, and the Income Tax Law. These rules apply to Mexican and foreign employees working in the private sector, whether on fixed-term, seasonal, or indefinite contracts.

The LFT sets the minimum standards that every employer must meet, covering areas such as:

• Working hours, rest periods, and overtime
• Minimum wage, the year-end bonus (aguinaldo), and profit sharing (PTU)
• Paid vacation and other leave entitlements
• Termination, notice, and severance pay

Employer rights under the LFT are considered non-waivable minimum rights. Any contract clause offering less than the statutory minimum is void, and non-compliance can lead to fines, back-pay orders, and labour-court claims.

The LFT requires the employment relationship to be documented in a written individual contract. If no written contract exists, the law places the blame on the employer, and the employee is still presumed to enjoy all statutory rights. Contracts are indefinite by default; fixed-term, project-based, or seasonal contracts are only valid where the nature of the work justifies them.

The law permits a probationary period (periodo a prueba) of up to 30 days for general roles, extendable to 180 days for management, technical, or specialised positions. Initial-training agreements (contratos de capacitación inicial) follow similar limits. Probationary employees receive full pay, benefits, and social-security coverage; if they are not retained, a workplace evaluation committee must first find the role was not satisfactorily performed.

The LFT defines three shift types, each with its own weekly cap:

• Day shift (between 6:00 and 20:00): up to 8 hours per day and 48 hours per week.
• Night shift (between 20:00 and 6:00): up to 7 hours per day and 42 hours per week.
• Mixed shift: up to 7.5 hours per day and 45 hours per week.

Overtime is capped at 3 hours per day and no more than 3 times per week (9 hours total). Employees are entitled to at least one full paid rest day for every six days worked, preferably Sunday. Employees who habitually work on Sunday earn an extra Sunday premium (prima dominical) of 25% of their daily wage. Overtime and holiday-work premiums apply as follows:

Mexico sets a daily minimum wage that is re-decreed each January by the National Minimum Wage Commission (CONASAMI). There are two geographic bands: a general nationwide rate and a higher rate for the Northern Border Free Zone (Zona Libre de la Frontera Norte).

For 2025, the general minimum wage was MXN 278.80 per day and the northern-border rate was MXN 419.88 per day. From 1 January 2026 these rose to MXN 315.04 per day (general, up 13%) and MXN 440.87 per day (northern border, up 5%) respectively. Some occupations also have separate "professional" minimum wages. The rate is a floor that cannot be reduced by contract; employers should confirm the current CONASAMI figures, as they change annually.

The LFT guarantees several categories of paid leave. The headline reform in recent years is "vacaciones dignas" (dignified vacations), effective 1 January 2023, which doubled first-year paid vacation. Employers may offer more, but never less, than these statutory minimums.

Two mandatory payments distinguish Mexican payroll from most other markets: the year-end aguinaldo and annual profit sharing. Both are statutory rights that cannot be waived.

Article 74 of the LFT lists the mandatory paid public holidays (días de descanso obligatorio). These are distinct from the many religious and civic observances that are not legally required days off. The statutory holidays are:

• 1 January – New Year's Day
• First Monday of February – in commemoration of 5 February (Constitution Day)
• Third Monday of March – in commemoration of 21 March (Benito Juárez's birthday)
• 1 May – Labour Day
• 16 September – Independence Day
• Third Monday of November – in commemoration of 20 November (Revolution Day)
• 1 October every six years – transfer of federal executive power (added in 2024)
• 25 December – Christmas Day
• Days set by federal/local electoral law for general elections

Employees required to work on a mandatory holiday are entitled to their normal day's pay plus a 200% premium (triple pay in total), as shown in the overtime table above.

Mexico offers strong protection against dismissal: there is no concept of at-will employment. An employer may only dismiss an employee without liability for one of the "just causes" listed in Article 47 (such as dishonesty, violence, or repeated unexcused absences), and must give the employee a written dismissal notice stating the cause. Employment can otherwise end by resignation, mutual agreement, or expiry of a valid fixed term.

An employee dismissed without just cause may claim either reinstatement or constitutional severance. The typical severance package comprises:

Hiring in Mexico requires careful adherence to the Ley Federal del Trabajo and its recent reforms. Meeting the statutory minimums on working hours, the aguinaldo, profit sharing, vacaciones dignas, and severance—while keeping up with fast-moving changes such as the phased 40-hour workweek—builds a strong, compliant foundation for your workforce. Registering every hire with the IMSS from day one is essential. Consider working with an HR partner experienced in Mexican labour law to ensure a smooth and compliant hiring process.

Book a call with us today to learn how we can support your hiring needs in Mexico.