updates in labor law

2024 Aguinaldo & Vacation Pay Rules for Mexico
Posted on November 20, 2024 by yucalandia
Nov. 27, 2023
AGUINALDOs … and Vacation Days-Pay … INCLUDING 2023’s Additional ~25% Vacation Pay Premium**

As Christmas holiday chatzkies are appearing on store shelves …. as we make our holiday plans … It’s time to remember our beloved household help and employees (including nuestro querido “muchachas” y “mozos”).

Please plan ahead to pay them their end of the year Aguinaldos and Vacation Pay by at least December 20’th …. and Plan to also give them paid-Vacation days OFF for the year … Ignore the gringo-myths: The Aguinaldo is NOT a optional bonus. Our Mexican workers and their families count-on and depend on these critical annual payments owed to them, by law.

Because the Annual vacation pay & Aguinaldo payments are mandatory, you can pay them whenever you want … like even ~NOW~ … so they can enjoy using those $$ for the upcoming holiday sales !

Aguinaldo Calculation:
Basically the Aguinaldo is 15 days of pay. (calculated on a 7 day work wk) – so it formally 2 weeks of pay, plus another day of “Daily Rate Pay”.

Specifically, the annual aguinaldo payment is precisely 15 days of “Daily Rate pay”. … Note that “Daily Rate pay” is a bit peculiar, because you take their weekly pay, and divide by 7 days.

Example, if your cleaning person is paid $350 pesos each time, for 2 times a week, then their “Daily Rate Pay” is => $700/7 days = $100 per day.

This means a 15 day Aguinaldo for her would be:
15 days x $100/day = $1,500 Aguinaldo for the Year

It is not a Christmas bonus. It is a mandatory wage payment that is due by the 20’th of December. The aguinaldo is equivalent to at least “15 days wages”, and may be pro-rated if the employee has been working for you for less than a full year.

If the person only worked part time or just some months of the year ... One method is to simply divide their TOTAL annual pay $$ by 365 days … to get the “Daily Rate Pay” … and then MULTIPLY that part-year-adjusted “Daily Rate Pay” by 15 days.

mexico-ramirez-family

Note that if they work only a part year, and you don’t know the total amount paid during the whole year:
An alternate way of calculating the aguinaldo is determined by multiplying the total days they worked in current year … times 15 … then divide by 365 days .. and then finally … multiply that value by the daily rate:

For a part-year worker coming in for 2 days a month for 9 months =>
18 days total worked … x … 15 days of Aguinaldo = 270
270 / 365 = 0.7392 … 0.74 x $Daily Rate ($100 pesos/day?) = $ 74 pesos

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Vacation Pay – 2023 Update !

4 pesos

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Vacation Pay – 2023 Update !
Vacation pay starts with a basic minimum payment of 12 days of Daily Rate pay, plus a 25% bonus.** … => Daily Rate pay x 1.25 x # of Vacation Days.

**Further, as of 2023, Mexican labor law requires employers to pay a vacation premium, a bonus of **at least 25 percent of the base salary**, so that vacation days are paid at a 125 percent salary rate at a minimum,

https://www.shrm.org/resourcesandtools/hr-topics/global-hr/pages/mexico-paid-vacation-days.aspx

1st year – 12 days of Daily Rate pay**
2 years – 14 days
3 years – 16 days
4 years – 18 days
5 years – 20 days
6 to 10 years – 22 days
11 to 15 years – 24 days
16 to 20 years – 26 days
21 to 25 years – 28 days
26 to 30 years – 30 days
31 to 36 years – 32 days

**Daily Rate pay is based on a 7 day work-week calculation. Either divide their weekly pay by 7 to get their Daily Rate pay … and then …
**Increase that Daily Rate pay by MULTIPLYING it by 1.25 for Vacation Pay calculations.

or .. Calculate the full year pay, and divide by 365 days to get the Daily Rate pay, and Increase that Daily Rate pay by MULTIPLYING it by 1.25 for Vacation Pay calculations.

Happy Holidays !

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See more details at our Full Articles:
https://yucalandia.com/answers-to-common-questions/labor-law-for-household-employees-in-mexico-what-must-we-pay/

… and https://yucalandia.com/answers-to-common-questions/mexicos-new-2012-labor-law-and-the-effects-on-expats-with-household-help/

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Feel free to copy while giving proper attribution: YucaLandia/Surviving Yucatan.
Steven M. Fry

CERRALVO LAW OFFICE INFO: legal advice on labor law...
...
Vacation. Employees employed for more than one year are entitled to at least 6 days paid vacation. Vacation leave is increased 2 days for each additional year up to a maximum of 12 days. Additionally, for every 5 years of service, 2 additional days must be added. A quick guide for calculating vacation is as follows:
Year 1 - 6 days, Year 2 - 8 days, Year 3 - 10 days, Year 4 - 12 days, Year 5 -14 days, Year 10 -16 days, Year 15 18 days
...
Vacation Premium.Employers must pay a vacation premium to employees equal to 25% of the wages payable during the vacation period.
...
Legal Holidays. Mexico has 7 paid legal holidays including:
- January 1 (New Year’s Day), - February 5 (Constitution Day), - March 21 (Benito Juarez Day), - May 1 (Labor Day), - September 16 (Independence Day),
- November 20 (Revolution Day), - December 25 (Christmas).
- In addition to those already mentioned, every 6th year when a new president is sworn into office, employees receive a paid day off on December 1 (Inauguration Day).
...
YOUR FRIEND: MIGUEL LEÓN. CELL 612 167-1375 .. OFFICE. 114 0341

November 30, 2012
Mexico Enacts Important Reforms to the Federal Labor Law

Authors: Oscar De la Vega, Mónica Schiaffino, Eduardo Arrocha, and Liliana Hernandez
Mexico's Federal Official Gazette today published a Decree that reforms and repeals various provisions of its Federal Labor Law (FLL). The reform will become effective on December 1, 2012, with some exceptions which are discussed below. The FLL had not been subjected to any substantial modifications since 1970. Accordingly, the reform has extensive implications for employers with operations in Mexico.

Below we provide a summary of the FLL reforms and their potential impact.

Employment Relationship

The reform adds seasonal employment agreements and initial training agreements as new types of employment contracts, in addition to those already permitted under the statute (i.e., employment contracts for specific work and for a definite or indefinite period).

The initial training employment agreements must establish a time period of three months, as a general rule, and six months, for executive positions. Additionally, a probationary period of 30 days, generally, and 180 days, for executive positions, will apply to employment agreements for an indefinite term or to those exceeding 180 days.

Notably, the reform adds the requirement that, in order to avoid employer liability, the opinion of the Joint Commission for Productivity and Training must be taken into consideration before terminating an "initial training employment agreement" or an employment agreement subject to a probationary period. Requiring the opinion of the Joint Commission for Productivity and Training will likely result in a bureaucratic and potentially conflictive process.