Mexico PEO Services


Hire & Pay Employees in Mexico

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 the Global PEO, while the new hires and headquarter teams focus on your business goals.

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 the second-largest economy in South America and the 15th-largest economy in the world. It has a GDP (nominal) of $1.15 trillion, while its GDP in terms of purchasing power parity (PPP) is $2.45 trillion. More than 90% of exports are conducted under free trade agreements (FTAs), with more than 40 countries including the US, China, Japan, and the European Union. The country’s export trading mainly revolves around oil, silver, vegetables, cotton, coffee, fruits, and has recently emerged as a major manufacturing hub for auto parts and electronics. Prudent monetary policies, sensible fiscal policy, and structural reforms have improved Mexico’s macroeconomic performance and bolstered the economy.

Capital City

Mexico City


Mexican Peso

Principal Language



Federal Republic

Major Cities

Guadalajara, Monterrey, Puebla, León

Employment Contracts in Mexico


Employers are required to provide employment contracts to all the employees. Though the contracts can be written in Spanish and another language, those in Spanish are used in case conflicts arise. Employment contracts must contain:

  • Name, nationality, gender, marital status, and address of the worker and employer
  • Job description
  • Duration of the employment contract, in the case of fixed-term contracts
  • Worksite (s) where employees will work
  • Remuneration and mode of payment
  • Daily hours of work
  • Rest days, holidays, annual leave, and other conditions agreed to by workers and the employer
  • Training and development programs that employees may undergo for enhancing performance.

Revisions to the 2012 Federal Labor Law added three concepts: trial periods, initial training periods, and seasonal work which employers can consider when hiring new employees.

Trial Period

Employment for a defined term of more than 180 days or an indefinite term can now include a trial period. Employees must agree to the trial period that must be specified in the written employment contracts.

Initial Training Period

Employers can now use an initial training period to help acclimatize new employees and acquire the knowledge and skills required to perform a particular job. Employees must agree to this period specified in the employment contract. Initial training period must not exceed 3 months in general.

Seasonal Work

Employment for an indefinite term can now include discontinuous work in cases where the services are required for fixed periods, or seasons and not throughout the week, month, or year. This arrangement allows suspension of the employment contract during off-seasons.

Working Hours in Mexico


Under the Federal Labor Law, a normal workday must not exceed 8 hours, and a standard workweek must not exceed 48 hours. A 30-minute rest period must be provided during a work shift. Employees must also be given 1 day off in a week with full pay. Most employers choose a 40-hour workweek.

The Federal Labor Law recognizes 3 work shifts:

  • The day shift of 8 hours, between 6 a.m. and 8 p.m.
  • The night shift of 7 hours, between 8 p.m. and 6 a.m.
  • The swing or “mixed” shift of 7.5 hours, divided between the day and night shifts

A swing shift is considered a night shift if more than 3.5 hours of work is performed between 8 p.m. and 6 a.m.


Overtime is limited to 3 hours per day and must not be more than 3 consecutive days. Workers are paid twice their regular hourly wage for the first 9 hours of overtime per week.

Workers under 16 years of age cannot engage in overtime work. Employees who work on Sunday receive their regular wages and also an additional 25%. Employees required to work on their rest day are paid thrice their wages for that day.

Employee Leave in Mexico



The national holidays in Mexico are:

  • Jan. 1: New Year’s Day
  • First Monday in February: Constitution Day
  • Third Monday in March: Benito Juarez Day
  • May 1: International Labor Day
  • Sept. 16: Independence Day
  • Third Monday in November: Revolution Day
  • Dec. 1 every six years (2024, 2030, etc.): Presidential Inauguration Day
  • Dec. 25: Christmas Day

Employees who are required to work on a national holiday are entitled to triple their wages for that day.

Maternity Leave

Women employees can take paid maternity leave for 42 days before the expected delivery date and 42 days subsequently at 100% of regular wages. The leave after the delivery date can be extended by 2 weeks if the child requires hospitalization or has a disability. Women can transfer a maximum of 4 weeks leave before the date of delivery to postpartum leave. In case of adoption, female employees get 6 weeks leave after adopting the child. When they return to work after maternity leave, they can take two 30-minute rest periods in a day for childcare. Employers can help by reducing their shifts by an hour per work day. The maternity leave is funded by the Mexican Social Security Institute (Instituto Mexicano de Seguro Social or IMSS).

Paternity Leave

Male employees are entitled to a maximum of 5 days of paid leave for the adoption or birth of a child.

Sick Leave

Employees who are unable to work due to injury or illness (not related to work) and have made contributions to the social security system for at least 4 weeks before the condition developed, qualify for paid sick leave from the Social Security Institute. The benefits are paid at 60% of regular wages from the 4th day of the injury or illness up to 52 weeks. This period can be extended by another 52 weeks if required.

Annual/Vacation Leave

Employers are required to provide 6 paid annual leaves to employees after completing 1 year of employment. The number of leaves increases by 2 days every subsequent year until the entitlement reaches 14 days after the fifth year of service. After this, annual leave increases by 2 days for every 5 years of service. Employees are entitled to an additional 25% premium if they opt for payment in lieu of vacation.

Employee Benefits in Mexico


Pensions and Social Security

The legal retirement age is 65. Employees can also choose to retire at 60 years with reduced benefits. All cooperative members and private-sector employees, since 1997, are required to register with the Mexican Institute of Social Security or IMSS. Employees covered by the social insurance system pre-1997 can choose to receive benefits from the same or the individual account system with the IMSS.

Workers’ Compensation

Employers must register employees with the IMSS and also pay premiums to provide benefits to employees for work-related injuries and illnesses including surgery, hospitalization, medications, orthotic or prosthetic devices, rehabilitation, indemnities, and pensions.

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