Employment
Federal Labour Act protection and the 2019 court reform
The Federal Labour Act gives effect to Article 123 and is highly protective: dismissal requires justified cause, and an unjustified dismissal entitles the worker to reinstatement or three months' pay plus 20 days per year of service. The 2019 reform moved disputes from tripartite conciliation boards to judicial labour courts with compulsory prior conciliation.
Key rules
- Aguinaldo of at least 15 days' pay is due by 20 December each year.
- Statutory paid holiday starts at 12 days after one year of service following the 2023 reform, rising with seniority.
- Profit sharing (PTU) of 10% of taxable profit is distributed to employees, capped by the 2021 outsourcing reform.
- Subcontracting of a company's core business is prohibited; only specialised services may be outsourced, and they must be REPSE-registered.
- Unjustified dismissal claims must be filed within two months, and the employer bears the burden of proving cause.
Governing law
- Ley Federal del TrabajoPrincipal employment statute, amended 2019, 2021 and 2023.
- Political Constitution (Art 123)Constitutional labour guarantees.
- Ley del Seguro SocialIMSS contributions and benefits.
In practice
Conciliation before the Centro Federal de Conciliación y Registro Laboral is a mandatory first step before filing in a labour court. Written contracts are advisable but their absence is construed against the employer.