I’ve heard that the Mexican labor law is very restrictive. How?
Yes, the labor law is restrictive in comparison to U.S. law, but once the restrictions are understood, your method of operation can be successfully modified. Here are the major restrictions: Once an employee is hired and punches his time card for work, he is guaranteed a day’s wages. If you run out of material or a machine breaks down, you can’t require that the employee punch off the clock. Most clients make sure that the Mexican operation has a steady flow of material. However, we do have one client that builds to order. This client budgets downtime as a part of normal operations. If you must layoff an employee, you must pay the employees three months salary and, additionally, approximately one half a month’s salary for every year of seniority. That rarely happens, because we negotiate with the employee or transfer the employee to another client that is looking for workers. If you must fire an employee and expect not to pay the above-mentioned severance pay, you must detail and docum
