MEXICO Trends and Developments Contributed by: Juan José Villar, Juan Carlos Villar and María Leticia Montero, Villar & Villar Abogados, S.C.
many (34–37 hours average), and comparable econo - mies such as Chile and Colombia, which have already made similar moves with phased reductions. The phased timeline – what your business needs to know now The reduction does not happen overnight. The Consti - tution establishes a clear, year-by-year schedule that gives businesses time to prepare: • 2026 – 48 hours per week (no change yet – the current limit remains in force); • 2027 – 46 hours per week (effective 1 January 2027); • 2028 – 44 hours per week (effective 1 January 2028); • 2029 – 42 hours per week (effective 1 January 2029); and • 2030 – 40 hours per week (the final constitutional target). One rule is absolute: no worker’s wages, salaries or benefits may be reduced as a result of the shorter workweek. This protection cannot be waived by any The reform also overhauled the rules on overtime, and they are significantly more expensive for employers who rely on extra hours. The new framework is: • weekly cap – a maximum of 12 hours of overtime per week; • daily limit – no more than four hours of overtime per day, across no more than four days per week; • double pay – overtime within the 12-hour weekly limit must be paid at double the regular rate; • triple pay – overtime exceeding 12 hours per week must be paid at triple the regular rate, though this excess may not exceed four additional hours per week; contract or agreement. Overtime – the new rules • daily maximum – combined regular and overtime hours may never exceed 12 hours in a single work - ing day; and • workers under 18 – the absolute prohibition on overtime work remains fully in force.
What this means for your business The financial impact is real and, for some sectors, sig - nificant. Because wages cannot be reduced, compa - nies in labour-intensive industries will effectively pay the same salary for fewer regular hours, increasing the cost per hour worked. By 2030, this could represent an increase of up to 25% in hourly labour costs for businesses that do not offset the change with produc - tivity improvements. The sectors most affected include manufacturing, logistics, retail, food and beverage, and hospitality, industries where workweeks of 48 hours are com - mon and where more than 13 million workers will be directly affected. For service and technology compa - nies already operating on shorter weeks, the immedi - ate financial impact is more limited, but compliance obligations apply to all. The new overtime cost structure, at double or triple the regular rate, simultaneously makes the systematic use of overtime as a low-cost operational tool unvi - able. Businesses that have relied on overtime as a flexible buffer will need to redesign their workforce models. Key actions for employers: • audit your working hours – map actual hours worked by department, contracted hours versus real working time, and overtime patterns; • model the financial impact – run scenarios for each phased reduction to plan budgets ahead of each January deadline; • review all contracts – update individual employ - ment contracts, collective bargaining agreements and internal work regulations to align with the new constitutional limits; • implement electronic time-tracking – the LFT reform makes it mandatory to electronically record the start and end of every working day, subject to government inspection; and • build a productivity strategy – invest in process improvement, automation and results-based management. The businesses that will navigate this reform best are those that produce the same output in fewer hours, not those who just comply on paper.
692 CHAMBERS.COM
Powered by FlippingBook