Minimum Requirements for Hiring Personnel

June 1, 2012
Minimum Requirements for Hiring Personnel

It is very important for companies to understand the minimum requirements with which they must comply whenhiring Mexican or foreign personnel. The minimum rights held by employees working in Mexico are providedfor in Article 123 of the Constitution of the United Mexican States and its regulatory law, the Federal Labor Law(LFT, for its acronym in Spanish), the Social Security Law, which guarantees the right to health, medicalassistance and retirement and pensions for employees, and the National Workers’ Housing Fund law, whichregulates the housing needs of employees. When hiring personnel of Mexican nationality, companies should: (i)ask the potential candidate to complete an employment application in the format used by the company for suchpurposes, which form should request personal information from each candidate such as age, domicile, maritalstatus, etc.; (ii) if the candidate is accepted, execute the corresponding individual employment agreement, whichis the document necessary to evidence the salary and benefits pursuant to which an employee was hired; (iii)register the employee with the Mexican Social Security Institute, the National Workers’ Housing Fund and paythe corresponding fees to each of such organizations. In general terms, the LFT establishes the followingminimum rights for employees hired in Mexico: (i) maximum work schedule of 48 hours per week; (ii) a day of rest with payment of salary and benefits for each six days of work; (iii) a holiday/Christmas bonus each year of atleast 15 days of salary; (iv) an annual vacation period of at least six work days paid after the first year ofemployment and increasing with each year of service; (v) an annual vacation bonus equivalent to at least 25% ofthe employee’s regular salary and payable during the vacation period; and (vi) annual employee profit sharing of10% of the net profits generated by the company and calculated and distributed according to the terms of the LFTand the Income Tax Law. Furthermore, it should be noted that the lack of a written employment agreement,failure to register the employees with the previously indicated institutions or failure to pay the correspondingsocial security payments does not deprive the employee of the rights that arise from the employment relationshipand the referenced laws. Finally, when hiring foreign employees, companies must comply with the samerequirements and proceedings as for Mexican employees. However, in addition to the foregoing, and inaccordance with the Federal Immigration Act (Ley General de Población), foreigners must have a visa to work inMexico from the National Immigration Institute. The National Immigration Institute issues work visas subject tocertain requirements. Furthermore, certain additional special documentation, depending on the particular facts ofthe hiring of the foreigner, is normally recommended.

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