Employment 2025

MEXICO Law and Practice Contributed by: Mauricio Moreno Rey, Anahí Serrano, Erick Sastré and Karla Fajardo, Cannizzo, Ortiz y Asociados, S.C.

de la Frontera Norte ), a 25 km strip south of the US border, and (ii) the rest of the country. For 2025, the general minimum wage in the Northern Border Free Zone is MXN419.88, while in the rest of the country it is MXN278.80 – representing a 12% increase com - pared to the previous year. The annual determination of minimum wages, or the revision thereof, in terms of the law, may never be below the inflation accrued during the period elapsed from its last revision. Wages, in general terms, are protected by legal pro - visions, including those prohibiting, for example, the minimum wage from being subject to offset ( compen - sación ), discount or reduction, except in certain cas - es, and those establishing that the wages that are to be paid in cash must be paid in legal tender and that the currency may not be substituted by merchandise, vouchers, tokens or other items. Employees are entitled to a Christmas bonus which, pursuant to the Federal Labour Law, must be paid before 20 December to employees who have com - pleted one year of service and must be equal to at least 15 days of salary. Those employees who have not completed one year of service are entitled to be paid the proportional part of the bonus. Furthermore, employees are entitled to participate in the profits of enterprises ( Participación de los Traba - jadores en las Utilidades , or PTU) in accordance with the percentage determined by the National Commis - sion for the Participation of Employees in the Profits of Enterprises ( Comisión Nacional para la Participación de los Trabajadores en las Utilidades de las Empresas ). Such percentage, as determined by the Commission, is currently 10% of the employer’s annual profits. The basis for the calculation of the annual PTU payable to the employees of an enterprise is determined by the profit of such enterprise as calculated in accordance with the Income Tax Law in Mexico and currently takes into account the taxable profit of the employer during a tax year. However, certain adjustments are made in accordance with Article 16 of the Income Tax Law in order to calculate the basis for PTU (for example, for PTU purposes, dividends received by the company from other corporations are considered as profits,

among others). Therefore, there might be a difference between the actual taxable income and the basis for the PTU. The amount of PTU to be distributed among the employees is divided into two equal shares. The first one takes into account the days worked by each employee during the year, regardless of the amount of their salary, while the second share is distributed in proportion to the amount of the salary paid in relation to the work performed during the year. Directors, administrators and general managers are not entitled to any PTU payment. Each non-unionised employee is entitled to a PTU payment; however, if their salary is higher than the highest salary of the unionised employees, such highest salary, increased by 20%, shall be taken into account as a maximum limit for the purpose of calculating the PTU payment. The PTU payable to each employee cannot be higher than (i) three months of their current salary or (ii) the average of the PTU paid to such employee during the last three years, whichever is higher. The following enterprises have no obligation to pay any PTU: (i) those newly incorporated, in relation to the first year; (ii) those developing new products, in relation to the first two years; and (iii) decentralised public institutions with assistance, charitable or cul - tural purposes, among others. Additional incentives such as bonuses or punctuality or attendance premiums are neither mandatory nor regulated by law but can be freely included in employ - ment agreements. 1.5 Other Employment Terms Vacations Employees who have rendered their services for more than one year are entitled to an annual period of paid vacation, which in no case may be less than 12 work - ing days, and which will be increased by two work - ing days for each subsequent year of service, until it reaches 20 days. Vacation days may be taken con - tinuously, with the option for the worker to unilaterally decide to distribute the annual period of paid vacation as needed.

360 CHAMBERS.COM