The Law provides a maximum 48 hour work week. Day shifts are eight hours long while night shifts are seven hours long. However, companies usually work between 40 and 45 hours per week.
Overtime is allowed for twice or three times the regular hourly wages, depending on the corresponding number of hours worked. Double wages are paid for nine hours per week (three hours per day, three times a week) and any additional overtime is paid three times the regular hourly wages. Triple wages are also paid when working on any of the seven legal holidays.
After continuously working for one year, employees are entitled to no less than six working days of paid vacation.
This vacation period will increase two days up to a maximum twelve days for each additional year of work. After the fourth year, the vacation period will increase by two days for each five years of work. Also, workers will be paid an additional 25% of their normal daily wages as vacation premium.
Severance compensation is payable at a rate of three monthly wages plus 20 days for each year of service with the company.
With voluntary resignations, the company is only liable for a proportional part of vacation premium and the corresponding Christmas bonus. However, if the employee had continuously worked for more than 15 years, the severance settlement will be increased by twelve days of the last monthly wages paid, for each year of work with the company.
Workers' income is established under agreements regulated by the Federal Labor Law. The two types of agreements are the Collective Labor Contract agreed upon by the company and union, and the Individual Labor Contract directly agreed upon by the employee and the employer.
Mandandatory social benefits are contributions to the social security system (IMSS), the housing fund (INFONAVIT) and the retirement savings system (SAR), as well as payments for vacation premiums, vacations and Christmas bonuses. On average, the cost of these benefits accounts for 29% of paid salaries.
The Law provides for a yearly review of salaries wich
cannot be lower than the legally established minimum wage
(Minimum wages are set by the National Minimum Wage Commission, an agency made of business associations, and union and Government representatives. Minimum wages are reviewed every year even if more frequent reviews are possible with relatively high inflation rates)
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