Four types of Mexican Labor Contracts
Before November 30, 2012 many companies in Mexico routinely had the habit of employing Mexican labor contracts that were verbal. Posterior to this date the Mexican government revised the nation’s Federal Labor Law (FLL) to define the types and number of Mexican labor contracts that could be used by Mexican business owners to put people to work. This noticed was published for the public in the Official Gazette of the Federation (DOF). The Official Gazette of the Federation is a document that is published the Government of Mexico daily. It is similar to the United States’ Federal Register and the Canada Gazette.
The Mexican Federal Labor Law (FLT) is the law that governs labor nationwide. Only article 123 of Mexico’s 1917 Constitution supersedes it.
With the reform of labor, an individual Mexican labor contracts are one in which a person agrees to lend to another a subordinate personal work. This person receives a salary. Article Thirty-Five of the Federal Labor Law has determined that relationship between employers and employees in the country can be for a specific position or period of time, for seasonal work, indefinitely, for a test period, or for training purposes. Additionally, under Article Twenty-Four of the Federal Labor Law employers must record working conditions in writing, if no collective agreements apply to the relationship. At least two copies of Mexican labor contracts must be made, one for each party.
Below are the main types of Mexican labor contracts:
Mexican Labor Contracts for an Indeterminate Amounts of Time
This type of agreement includes those for undetermined work relationship or those that are longer than one hundred and eighty days. In this instance, a trial period that does not go beyond 30 days may be established. This trial period can be employed for the sole purpose of ensuring that the employee meets the requirements and knowledge that is necessary to perform the work that has been defined.
Contract by Work or by Determined Time Period
Article thirty-seven of the FLL states that a specific time period for labor contracts in Mexico can be stipulated only when required by the nature of the work provided. This stipulated time can also be defined when the contract with an individual is for the purpose of temporarily replacing another worker.
Training Mexican labor contracts have been enacted so that individuals who do not have experience are able to acquire it by engaging in their personal subordinate services. According to Article Thirty-Nine-A of the FLT, it is considered that there is a work relationship for initial training when a worker is obliged to provide subordinate services under the management and command under an employing entity.
Training contracts are of a maximum period of 3 months unless the training is for managerial positions. Positions in management have a maximum training period of up to six months. When the trial or initial training period ends, and the work relationship continues, it should be considered employment for an indefinite time period.
Seasonal Mexican Labor Contracts
Under article 39-F of the FTL, there is the specific provision that employment relationships for an indefinite period in Mexican labor contracts will, generally speaking, be continuous. However, there may be agreements that are not for a specific time frame but are for seasonal work. Under these types of Mexican labor contracts, workers have the same rights as those workers that are employed under a contract that is indefinite.
Contract for a Trial Period
The inclusion of Article 39-A of the Federal Labor Law provides that in the case of trial periods, (which will be between 30 and 100 days for technical and administrative work), if the employer decides not to continue the work relationship, he or she must then go to Mexico’s Training and Productivity Commission to let the worker go. To avoid the abuse Mexican labor contracts for a trial period, the law stipulates that back to back contracts for training will not be used.
When starting up businesses in Mexico, it is of importance that employers have a rudimentary knowledge of the number and types of Mexican labor contracts that they can utilize to organize and manage their staff. Companies that work as partners with a shelter company in Mexico have the advantage of having experienced guidance in using each of the different types of contract to their best advantage. In conclusion, it is the utmost importance that both the worker and the company know and understand their labor rights and obligations.