5 Key Considerations All Employers Should Make When Hiring in Mexico in 2017

Mexico is broadly known for being heavily protectionist towards the worker as it pertains to the state’s labor law. Many U.S. and European companies rely on third-party executive search firms for job placements in Mexico to provide the proper guidance through the candidate search and hiring process.

The Mexican Federal Labor Law (FLL) is the legal framework that governs all employment relationships in Mexico. This law was enacted in 1970 and updated with the new reform in 2012. Other laws regulating employee relationships to look out for are: Safety and Hygiene Legislation, and finally the Mexican Constitution. This article will help you understand the hiring process and labor laws in Mexico.

How to hire employees in Mexico?
Here are five essential things your business should consider when employing workers in Mexico.

Working visa for foreign employees: Foreign employees may just make up 10% of the business labor force in Mexico and the company must be officially registered to legally hire foreign employees. Businesses need to take into account that all provisions related to the working visa must be facilitated by the employer, this includes applying for a work permit with the INM (Instituto Nacional de Migración).

For the working visa application, the company has to meet the following requirements:

  • Original and copy of the official valid identification of the individual or entity’s legal representative, public agency or deconcentrated body, decentralized body, company of state participation or public trust. Embassy or Consulate of a country with representation in Mexico, in case of a Mexican, or valid residency card in case of a foreign person.
  • That the foreign person for whom the visa is required does not have a visa request of temporary residency or visitor with permit to perform paid activities, requested by the Institute by job offer pending of resolution.
  • Original job offer in letterhead in which it is stated the occupation that the foreign person will perform in accordance to the classification of the National System of Classification of Occupations or the one that at some moment will supersede this system, time required, workplace and amount of compensation;
  • Copy of the employer registration statement before the Institute, and
  • Legible copy of the passport or document of identity and travel valid in accordance to the international law and in force for the foreign person which applies for the visa.

For the complete application process, please visit the link: Visa by Job Offer.

Hire a third-party job recruitment agency: As accommodating with Mexican labor and social laws can be obscure and complex, many companies choose to execute the process through a third party job recruitment agency. This will alleviate much of the burden of understanding the fine print and technicalities of finding top executives in Mexico. Furthermore, executive search firms may leverage their existing network to provide you with a list of pre-qualified potential employees.

 

Duties and hiring practices in Mexico: The company obligations with respect to the worker include (but aren’t restricted to) the following:

  • Entering into a proper worker agreement that is written – This will help clarify any expectations coming from both sides. Also this is protectionist measure to ensure your company’s safeguard against any possible lawsuit.
  • Complying with all laws – Comply with all labor and social laws to avoid hefty fines from regulatory agencies.
  • Paying wages weekly or bi-monthly – Most companies in Mexico pay their employees every 15 days. However, it is not uncommon in other countries to have payouts every month, before setting a payment schedule check with local businesses to understand their employer/employee culture.
  • Collecting and paying social security tax, National housing fund (infonavit) contributions, and retirement contributions – Be sure to pay all regulatory agencies pertaining to doing business in Mexico. If agencies are not paid on time, they may close your business temporarily until payments are reconciled and up to date.
  • Providing all accommodations and benefits required by the Mexican labor law – Provide all benefits required by the labor law, this includes if applicable, providing health insurance and adhering to the best job practices.
  • Supplying gear and appropriate tools – Provide the equipment and tools needed to maintain your employees safe. The last thing any business wants are accidents arising from negligence.
  • Executing appropriate health and security protocols – Always be aware of the health and security protocols. It is recommended to have a person on staff that oversees that all laws, regulations, and protocols are met to avoid any conflict with employees or government agencies.

Employment agreements: According to the Mexican Labor Law, all employer and employee work relationships must be agreed to in writing. Even if the worker does not ask for an agreement, it is important that you have one to comply with Mexican government law. Also, an agreement will help clarify the obligations, roles and expectations resulting from this relationship.

Bear in mind that should a litigation case or lawsuit appear, the burden of proof is going to be on the company. To be specific, it is suggested that the employee agreement provide specific details regarding the following:

  • Date of employment
  • Contract
  • Working hours
  • Location
  • Wages
  • Benefits
  • Vacation and Holiday pay and provision
  • Absences
  • Termination causes
  • Specifying appropriate termination process

Background checks: When hiring in Mexico, it is important that employers conduct background checks and verify references. Here are some guidelines.

Citizenship or Immigration status: It is required that an employer ask about immigration status and to resolve all migratory issues before hiring a foreign candidate. Penalties and fees and even deportation is a consequence of illegal workers hired by employers in Mexico. Employment may not be denied due to race, religion, etc.

Criminal records: Employers can ask any candidate regarding their criminal record and can also conduct legal searches with applicable authorities. Typically, a letter confirming “non-criminal activity” can be issued by the local police station, as a digital centralized system is not functional.

Credit checks: Credit checks can be conducted with national credit check financial institutions.

Medical history: Employers are able to ask any candidate regarding their medical history.

Drug screening: It is acceptable to have employers require drug screening. A waiver should be signed by the potential employee. However, the results must be kept confidential. The employer may not deny the potential employee solely on the basis of a positive result.

Social media: In Mexico, social media is considered private information and direct involvement by the employer could be considered a legal offense.

If you need additional guidance about hiring talent in Mexico for your organization, don’t hesitate to contact us at barbachano@bipsearch.com

About the Author:

Fernando Ortiz-Barbachano    

CEO & Founder of Barbachano International (BIP) the Human Capital Solutions leader in Mexico, Latin America and the USA offering high impact executive search, executive coaching and outplacement. Directly and through our partners we have offices in Mexico, USA, Canada, Brazil, Argentina, Colombia, Chile, Peru, Uruguay, and Paraguay. Our corporate offices are in San Diego, California. Phone: 619-427-2310. Visit us at www.bipsearch.com.