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Overview of Mexico
Mexico is the largest Spanish speaking country in the world. It has the second largest economy in Latin America and the 14th largest in the world. With a population of 135 million people, it is a popular destination for labour as the cost is cheaper but the quality is still high and many people speak English. Mexico is continuously growing and has a great start-up scene, especially in the financial technological sector. Business culture in Mexico thrives on negotiations and chats over lunch and/or tequila. Many deals are closed after sharing a few shots of tequila.
Currency of Mexico
- Mexican Peso
Health Insurance and the Social Security system of Mexico
Social security provides the employee with medical, surgical, pharmaceutical, and hospital services. The mandatory health insurance covers
- Occupational risk
- Illness and maternity
- Disability and death
- Retirement and currently working elders
- Day care and social services
Employer cost of Mexico
The cost for an employer to hire someone in Mexico is a plus of 51.15% to the gross salary.
Salary and bonuses of Mexico
Regular employees have to be paid biweekly.
An employee is entitled to a Christmas Bonus which must be paid before the 20th of December. Is it equivalent to at least 15 days of salary.
Public Holidays in Mexico
- January 1st – New Years Day
- First Monday in February – Day of the constitution
- Third Monday in March – Benito Juarez’s Birthday
- May 1st – Labour day
- September 16th – Independence Day
- Third Monday in November – Day of the Mexican Revolution
- December 1st (Presidential Election Year) – Presidential election (Every 6 years)
- December 25th – Christmas
Working Hours in Mexico
In Mexico, the legal maximum a day is 8 hours or 48 hours per week. For a continuous workday, a break of half an hour must be given. For every 6 days of work, the employee in entitled to one day of rest.
Office hours are from 8:00am to 6pm, Monday to Friday. Many offices also work on a Saturday morning until lunch time (usually 2pm).
In Mexico, the maximum overtime one can work in one week is 9 hours. These hours must be paid at 100% of the regular wage. Any hour worked over these 9 hours is compensated with 200% of the regular hourly wage.
Vacation in Mexico
Vacation time in Mexico increases with the amount of time you have been working for your company. With 1 year of service, one is granted 6 days of vacation. With 2 years, 8 days. With 3 years, 10 days. With 4 years, 12 days. With 5 to 9 years of service, 14 days.
Sick Leave in Mexico
When one falls ill in Mexico, this must be certified by the medical authorities at IMSS. The employee is then provided with sick pay for up to 52 weeks. During this time, employees receive 60% of their wage unless the illness/injury was work-related in which case the employee receives 100% of their wage.
Termination/Severance in Mexico
An employer or employee can terminate the work contract at any point in time unless otherwise specified in the contract. An employer who dismissed an employee must give written notice, clearly stating the reasons for the dismissal including dates and times of possible misconduct which lead to the dismissal.
If no reason for termination is given, this falls under termination without cause and in this case, the employee has the right to either be reinstated or compensated. Compensation looks as follows: 3 months of salary or 20 days of salary for each year the worker was employed, vacation and Christmas bonus if accrued at the time of dismissal.