It is almost that time of the year, in which workers in Mexico receive their annual bonus, as specified in the México Ley de Trabajo. Many employers do not realize that the México Ley de Trabajo underwent an extensive review in 2019, by the then President Andrés Manuel López Obrador (AMLO). Approximately 1000 changes were made to the México Ley de Trabajo. One of which was the way in which the Annual Bonus for workers is configured. Here is Article 87 which is the current law:
Article 87.- Workers will have the right to an annual bonus that must be paid before the twentieth of December, equivalent to at least fifteen days of salary. Those who have not completed the year of service, regardless of whether they are working or not on the date of settlement of the bonus, will have the right to be paid the proportional part of it, according to the time they have worked, whatever this may be.
The previous Article 87, had a complicated formula that could be determined in at least two different ways and many employers would chose the formula that produced the lower amount. This resulted in the payment of fines to SAT, of course.
Anyone who has ever read a government document, knows full well that the wording is always vague. This is on purpose as the laws are written by attorneys who have a bias to support their trade. This intended bias forces employers to pay an attorney to help them understand the law, so that the employers do not have to pay fines. The attorneys that write the laws have a bias to ensure that many will misinterpret the law and be forced to pay a hefty fine to the government, which is turns pay their attorneys.
Now, the mathematical formula is gone, and still the employer is confused by the new wording. If an employee works for 6 days a week, and earns MXN$1000 a week, then they earn MXN$166.66 per day and 15 times MXN$166.66 is equal to an annual bonus of MXN$2,500. Or is it?
Under the México Ley de Trabajo there is another clause in Chapter III: Rest Days, which states:
Article 69.- For every six days of work, the worker will enjoy at least one day of rest, with full salary.
Article 70.- In jobs that require continuous work, the workers and the employer will set by common agreement the days on which the workers must enjoy weekly rest.
Article 71.- The regulations of this Law will ensure that the weekly day of rest is Sunday.
Workers who provide service on Sundays will be entitled to an additional bonus of at least twenty-five percent of the salary for ordinary work days.
Article 72.- When the worker does not provide his services during all the working days of the week, or when on the same day or in the same week he provides his services to several employers, he will have the right to be paid the proportional part of the salary for the days of rest, calculated on the salary of the days on which he had worked or on which he had received from each employer.
Article 73.- Workers are not obliged to provide services on their rest days. If this provision is violated, the employer will pay the worker, regardless of the salary corresponding to the rest, a double salary for the service provided.
Article 87 could thus mean that the employer actually paid for seven days, even though the employee was only working for six days. Now, if we divide the MXN$1000 salary by 7 days, we arrive at MXN$142.86 per day (in lieu of the previous MXN$166.66 per day) and 15 times MXN$142.86 is equal to an annual bonus of $2,139.90. Or is it?
As for the employee who only works part time, say one day a week and is paid MXN$300 for the day, will that worker be paid for 15 days? Of course 15 times MXN$300 creates an annual bonus of MXN$4,500.
Also, a strict reading of the law, would imply that a part time worker who only works one day a week, would receive a partial payment for a day of rest equal to 1/6 or 1/7 of a day every six weeks and every six weeks the employee would receive an extra payment for a partial day of rest.
The problem, for those who not yet figured it out, is in the wording “equivalent to at least fifteen days of salary.” and the wording “For every six days of work, the worker will enjoy at least one day of rest, with full salary.” Salaries are based on weekly earnings, not daily and by invoking the daily premise into the law, they created the problem.
A trip to SAT does not provide any insight into the problem. The same is true with a visit to any attorney who specializes in Labor Law. In either case, it depends on how the person you speak with interprets the wording in the México Ley de Trabajo. And, to make matters worse, the multitude of México’s government offices still have the old law from prior to AMLO’s changes on their websites. And, if you type México’s Annual Bonus into your Internet search window the Artificial Information (AI) reply from searching the Internet will only provides the outdated formula, because AI cannot tell the difference between the right information and misinformation.
All of this could be avoided with a simpler statement that “employees should receive an annual bonus equal to two weeks salary.” However, that would be far from bureaucratic governing and what about those poor attorneys?
As much as we would like to provide a definitive answer to how to configure the annual bonus, we cannot in good faith provide it. Nor, can we point you in any direction other than the México Ley de Trabajo, which we did above. In the end, all we can say is Good Luck and we hope that you will not be fined for paying the wrong amount of an annual bonus to your employees.
