Mexico PEO & Employer of Record Services
Global PEO Services (GPS) helps companies hire employees in Mexico without establishing a legal entity. All human resources, benefits, payroll, and tax needs for the employees are managed by our Mexico PEO, while the new hires and headquarter teams focus on your business goals. Using a Mexico PEO is the fastest and most efficient way to develop a workforce in Mexico.
When hiring employees in Mexico, establishing a subsidiary or branch office is not always the best route, as it’s often a lengthy and expensive process. Hiring via a Professional Employer Organization (PEO), or Employer of Record (EOR), is a faster and often more effective option – especially when starting up in a new country.
Global PEO Services hires the employees on your behalf, legally contracting them through our subsidiary in accordance with Mexico labor laws. As a result, the burden of compliance is on us and the employees can begin work for your company in a matter of days. PEOs/EORs provide you with a streamlined option for hiring employees, testing markets, and responding to growing business needs in Mexico. With Global PEO Services, you get control without taking on legal entity liabilities, contractor risks, or sacrificing on talent or speed to market.
Mexico - Country Overview
Mexico is a stretch of land linking the continents of North and South America. In the north, Mexico borders the United States, and to the south, Guatemala, the Caribbean Sea, and Belize. Mexico is bordered, to the east, by the Gulf of Mexico and to the west by the Gulf of California.
Mexican Peso (Mex$)
Federal Presidential Republic
Employment Contracts in Mexico
A written contract is the most common type of contract in Mexico.
Some of the details typically mentioned in the written employment contract in Mexico include:
- Unique Population Registration Code also called Clave Única de Registro de Población (CURP)
- Federal Taxpayer Registration
- The need for a period of training or proof of capability (if applicable)
- A declaration that the worker will be educated and trained with the plans and programs drawn up by the company in accordance with the provisions of the law
- and more
The different types of employment relationships are:
- Permanent Employment – Unless specified in the employment contract, employment in Mexico is deemed indefinite.
- Fixed-Term Contracts – Per Mexico’s Federal Labor Law, fixed-term contracts may only be established when the nature of the activity requires it or when the objective is to temporarily replace a worker. The contract’s duration must be indicated expressly in the employment contract.
- Temporary Employment – The Federal Labour Law of Mexico does not distinguish temporary employment from fixed-term or special-purpose employment.
In Mexico, a probationary period lasts up to 30 days and can extend up to 180 days for workers in managerial, technical, or professional jobs.
Working Hours in Mexico
Employees are only allowed to work 6 days a week. Standard working hours are limited to 8 hours per day and 48 hours per week. A day shift workday can last up to 8 hours, a night shift up to 7 hours, and a mixed work shift up to 7.5 hours.
Employee Leave in Mexico
Employees in Mexico are entitled to the following leaves:
- Annual leave in Mexico – Per the Federal Labor Law, employees who have been with the company for more than a year are entitled to 6 working days of annual leave. The length of leave is determined by the length of service or seniority.
- Maternity leave in Mexico – Female employees in Mexico are entitled to 84 days (12 weeks) of fully paid maternity leave, with an extension if they are unable to return to work due to pregnancy or confinement. The leave is divided into two parts: 6 weeks preceding the delivery and 6 weeks following the delivery.
- Sick leave in Mexico – Employees in Mexico who are unable to work due to a non-work-related accident or illness and have made payments into the social security system in the fo4ur weeks preceding the onset of the condition are eligible for paid sick leave through the Social Security Institute. In the event of a work-related illness or accident, 4 weeks’ contribution is not required to be eligible for sick leave.
- Paternity leave in Mexico – Employees in Mexico are entitled to 5 working days of paid paternity leave following the birth of their child or the adoption of an infant.
The following are the statutory national holidays in Mexico:
- January 1 – New Year’s Day
- February 1 – Constitution Day
- March 15 – Benito Juárez’s Birthday Memorial
- May 1 – Labor Day / May Day
- September 16 – Independence Day
- November 15 – Revolution Day Memorial
- December 25 – Christmas Day
Employee Termination in Mexico
Typically there is no minimum notice period in Mexico.
Global Mobility in Mexico
There are typically the following categories of visas in Mexico:
- Tourist visa
- Business visitor visa
- Technical visitor visa
- Temporary resident visa
- Permanent resident visa
- Student visa
- Visitor on a cooperation program visa
- Long-term visitor visa
Certain visitors do not need a visa to enter Mexico for tourism or business purposes for up to 180 days. Nationals of Barbados and Trinidad and Tobago, nationals of any nation with proof of residency or a valid business or tourist visa for the United States (B1/B2), Japan, Canada, the United Kingdom, or any Schengen country, and individuals with permanent residency in Chile, Colombia, or Peru are among those eligible.
To obtain a work permit in Mexico, a foreign national must have a Mexican company or organization ready to employ them. A Mexican company must apply to the National Migration Institute on behalf of the worker and must have an Employee Registration Certificate.
Employee Benefits in Mexico
The Mexican Institute of Social Security (IMSS) provides insured employees with a retirement pension. A monthly pension, medical assistance, family allowances, and assistance aid are among the benefits.
Social insurance, often known as social welfare, is a government-mandated insurance program that provides financial help to the elderly, the disabled and the injured, and the unemployed.
Some examples of social insurance programs in Mexico are:
- Dependents’/Survivors Benefit – Survivor benefits are covered by the Mexican Institute of Social Security’s Life and Disability Insurance. It is available to survivors if the insured worker was a pensioner or had contributed for at least 150 weeks before death which must not be the result of an occupational injury. A funeral grant is provided with at least 12 weeks of contributions in the last 9 months.
- Life and Disability Insurance/Benefit – The Institute of Social Security offers benefits to disabled people with insurance. To be eligible for disability benefits, the insured must have made at least 250 weeks of contributions. 150 weeks of contributions are sufficient for more than 75% disability.