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Skuad’s Employer of Record Mexico (EOR) solutions make business expansion to Mexico easy and hassle-free. Our unique HR platform allows companies to hire exceptionally talented employees in Mexico, without having to set up a separate legal entity. It streamlines the process of hiring and onboarding a remote team by handling payroll management, taxation, and other legal compliances. To learn more about Skuad, Book a demo today.
Estimated Population: 128.45 million (2024 estimate)
Currency: Mexican Peso
Capital: Mexico City
Languages: Spanish, English
GDP: USD 3,605.87 billion (2024 estimate)
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Employment and labor laws in Mexico are based on the Federal Labor Law. The Federal Labor Law provides comprehensive guidelines on all processes from hiring to termination and everything in between.
The Federal Labor Law is generally skewed toward workers and employees and provides them several benefits, including long sick and compensatory leaves and generous overtime payments. This law applies to people of all nationalities who choose to work in Mexico.
Every employer registered in Mexico comes under the purview of the Federal Labor Law and needs to follow its guidelines for all the employees it hires.
Conducting your hiring process in Mexico as per the provisions of the Federal Labor Law is very important to ensure that setting up your business is painless and free from legal complications. This is where partnering with Skuad gives you a significant advantage. Talk to us to know more.
Some of the provisions of Employment Laws to note before hiring in Mexico are as follows.
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Under the Federal Labor Law in Mexico, each individual must enter into a contract with the employer. All these contracts must be in writing. The concept of Employment-At-Will does not exist in Mexico, and once a hire has been made, there must be a legitimate reason for termination of the given contract. If a requisite reason is not provided, employers are required to suitably compensate employees as per the provisions of the Federal Labor Law.
It is important to note here that the Federal Labor Law assumes that employment will be indefinite by default. If the parties decide that employment is for a definite term, this must be noted in the employment contract. Similarly, if the employee is hired on probation, the initial probationary period must be noted in the contract. The parties involved may also agree that the nature of work is discontinuous and not continuous, for example, working only on certain days of the week or for a limited number of hours.
Unions can also negotiate Collective Bargaining Agreements with employers; however, such agreements are over and above the individual agreements made by the employees with the employer. Such Collective Bargaining Agreements can promote healthy working conditions for employees as a group. The Collective Bargaining Agreement can be renewed after the stipulated period. However, such an agreement cannot go against the fundamental constitutional guarantees of an employee under the Federal Labor Law.
There are a host of details that are mandatory in any employment contract. The contract must include all the personal information of an employee, including name, domicile, address, and age. Further, it must stipulate the reason for employment and whether it is indefinite or for a particular training period. Such local recruitment challenges and complex laws can be managed aptly by partnering with a local EOR like Skuad. Click here to learn more.
Hiring in Mexico have become relatively easy, thanks to the growth of information technology associated with these processes. In fact, the process of hiring is almost the same as it might be in your home country. The first step is to identify the need for a new employee in the company and the position for which you need to hire the employee. Then, you need to determine a job description and communicate the job requirements to your hiring team or any third party that you might be collaborating with for the process. There are several apps and websites that will help you hire executives as well as lower-level corporate employees in Mexico. LinkedIn is a global favorite, but other portals include Bumeran, Empleate, Busco Jobs, OCCMundial, and Computrabajo.
Once you have enough candidates who fulfill the minimum requirements for the advertised position, you can invite these candidates to a series of technical rounds as well as interviews with both your technical team and the HR team.
While hiring, it is essential to conduct a thorough background check of each candidate that reaches far enough into the recruitment process to warrant hiring. This can go as far back as previous employees, schools, and other places that they have been associated with.
There is no doubt as to the various advantages of hiring through apps and websites. Without having to step out to conduct the hiring process, you get access to several candidates based in different parts of the country. However, you might also need to browse through hundreds of applications before reaching an appropriate candidate. Moreover, the websites and portals mentioned above cannot claim to provide access to the vast majority of employable candidates in the market.
There is no doubt as to the various advantages of hiring through apps and websites. Without having to step out to conduct the hiring process, you get access to several candidates based in different parts of the country. However, you might also need to browse through hundreds of applications before reaching an appropriate candidate. Moreover, the websites and portals mentioned above cannot claim to provide access to the vast majority of employable candidates in the market.
This is where an Employer of Record like Skuad comes in. When expanding your business to a new location, recruitment decisions often need to be made fast. Additionally, you might want to hire a large number of workers within a limited amount of time.
Skuad takes care of legal and compliance considerations so that your hiring process speeds up and you can focus on other aspects of your business at once. It also allows for the signing of documents remotely to help speed up the onboarding process considerably. The benefits of Skuad are not limited to the recruitment process. Other aspects of human resource management, such as managing payrolls, tax filing, security, and disbursal, can be managed by Skuad adeptly. To learn more about Skuad’s services, Talk to us.
The probation period in Mexico depends on the type of contract and is written into the contract. If the employment is meant for an indefinite period or even for a term of more than 180 days, a probation period of 90 days or 3 months is common practice.
Since the concept of serving at the pleasure of the employer does not exist in Mexico, employers need to provide a definite reason for the termination of employment. That said, the employees are expected to exhibit the highest integrity at work. A lack of such integrity at work is a valid reason for dismissal by the employer.
Actions that come under lack of integrity include using false documentation to get employed, dishonesty against coworkers, violence at the workplace, negligence, sabotage of the workplace, harmful carelessness, insubordination, incarceration, not adopting preventive measures for accidents or illnesses, immoral acts, revealing insider information, and more.
Regardless of whether termination is voluntary, with cause, or without cause, the employer must pay all the compensation and benefits mentioned in the contract up to the date of termination.
Business expansion is a long-drawn process that calls for extensive planning, especially when expanding to a foreign country. It is complicated and can take up to several months to complete but by choosing the EOR route for hiring employees in Mexico, you can fast-track the expansion process. Employer of Record Mexico (EOR) solutions by Skuad can make expansion to Mexico much simpler and a lot quicker for business. Our global outreach and a tech-enriched HR platform ensure compliance with local labor laws by managing employment responsibilities such as monthly payroll, work permits, employment contracts as well as taxation for your employees in Mexico. Contact Skuad today.
Working with an Employer of Record helps you simplify the process of expanding to a new country and saves you the time spent maneuvering legal hurdles and local complications. Employers of Record such as Skuad will help you develop contacts and associations tailor-made to your requirements and significantly speed up hiring, incorporation, and other processes.
Learn about the various types of visas in Mexico by talking to Skuad experts.
There are no special work permits for Mexico. Anyone who wishes to work in Mexico must apply for a visa that allows them to gain employment in Mexico.
Before hiring for any position in Mexico, it is essential to set up a payroll. The payroll needs to be a detailed account of the restrictions and regulations that the salaries of your workers will be subject to. Hence, it is essential to understand how to set up payroll and how the payroll system works in Mexico.
When you partner with an EOR such as Skuad, the management of payrolls becomes significantly easier. Since Skuad is an experienced player with knowledge of local regulations, the process of setting up payroll is also quicker.
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A Christmas bonus (also known as Aguinaldo) or a 13th month salary, is paid to the employees which equals to their 15 days of wages. It must be paid every year, positively before Dec 20. The amount and timing of the bonus payment can be decided by the individual and collective agreements. Commonly, the bonus is paid in two installments: half at the beginning of the year and the remaining in December.
For employees with a working period of less than a year or part-time employees, the amount is prorated. And for the employees paid on commission, it is calculated based on the annual daily average of salary.
Setting up a subsidiary in Mexico allows you to have a full-fledged operation while retaining the facility per firm under the aegis of the parent company. In Mexico, such a subsidiary is known as an Anonymous Society of Limited Responsibility or an Anonymous Society of Variable Capital.
The first step toward setting up a subsidiary in Mexico is to choose a name for the subsidiary and register it with the Ministry of External Affairs. Once this registration is approved, you sign a pro forma agreement under Mexican Law.
Once these steps have been completed, a legal operation needs to be set up to determine and prepare all the documentation required to carry out corporate activities in Mexico. Once you understand the local laws in Mexico, you can start recruiting and developing facilities. These processes can be simplified by using an EOR partner like Skuad. Book a demo here.
A Professional Employer Organization, or PEO, allows you access to a treasure trove of human resource expertise associated with the location from which you want to operate. This includes payroll management, recruitment, benefits management, and much more. However, a PEO is not the legal employer but rather a facilitator of employment. The employees hired by the PEO end up becoming employees of your company and not that of the PEO.
With Skuad as an EOR partner, organizations have more control over the decision-making processes. Skuad takes care of all the hassles involved in various stages of documentation and employment contracts. You do not need to take part in the process, and the best of talent locally becomes available to you. Contact Skuad today to hire the most skilled employees available in your new domain!
Do you think you are ready to expand your company’s business operations in Mexico? Skuad’s Employer of Record Mexico services can make the process fast and easy by handling your Employment requirements in compliance with the local labor laws. If you want to discuss more on how Skuad’s unified employment platform can help with your organization's expansion plans, Book a demo with Skuad today!
An Employer of Record (EOR) in Mexico is a local entity that handles employment tasks for companies not established in the country. It manages the legal and HR responsibilities, such as payroll, taxes, and benefits administration, allowing businesses to hire in Mexico without setting up their own office.
An example of an EOR is a global expansion company that hires and manages staff in Mexico for a tech firm based in the U.S. The EOR ensures compliance with local labor laws while the tech firm maintains control over the work performed by the employees.
Employer tax in Mexico includes social security contributions, which are approximately 7.58% to 15% of an employee's salary, plus additional taxes like payroll tax, which varies by state but generally ranges from 2% to 3%.
Leave law in Mexico mandates that employees are entitled to six days of paid annual leave after one year of service, increasing two days for each subsequent year until reaching 12 days. Additionally, employees have the right to paid maternity leave, paternity leave, and sick leave as per Mexican labor regulations.
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