Vacations for Employees in Mexico

Updated: December 1, 2019

Once upon a time in Mexico, (no, not the contemporary western film by Robert Rodriguez) people were hired on an informal basis. But, that was before the Mexican Labor Law was changed because so many employers were taking advantage of the workers. Now, Mexico is very pro-labor and the current labor laws protect the worker’s rights.

Vacations for employees are mandated under Mexican Labor Law and increase on a time basis, and the schedule is the federal minimum for vacation days in Mexico. Some employees negotiate for additional days in their contracts. The number of vacation days may be increased through negotiation and entered into an employment contract between the employer and the employee. The chart below explains how the number of vacations days increase:

Years of Employment Minimum Days
1 6
2 8
3 10
4 12
5 to 9 8
10 to 14 16
15 to 19 18

Vacation Premium Purpose

The purpose of the vacation premium (known as Prima in Spanish) is to provide some extra money for vacation expenses. Typically, the vacation premium should be paid at the beginning of the vacation days, although there exists no case law that says so.

It is important to note that under Mexican law, accrued vacation time shall not be compensated with money, and the employee must take time off to receive the vacation premium.

Requests for Vacation

To receive vacation days, an employee must have completed one full year of employment before he/she can receive vacation time off. An example would be an employee who began working for an employer on March 15. He/she cannot request vacation time until the following March 15 of the next year. After the full year, the employee must request vacation days in writing a minimum of two weeks before the days he or she is asking to receive.

Accrual and Expiration

Vacation time continues to accrue after the first full year of employment. At the end of a given year, the employer has six months to give the employee his/her vacation time off. If the employer does not provide vacation time during those six months, the employee can file a claim against the employer for his/her vacation time and payment of the vacation premium.

There is a one-year statutory limitation on vacation claims. In other words, 18 months after completion of the year during which vacation time was accrued, the employee has lost his/her right to claim the accumulated vacation and vacation premium from the employer.

Vacation Premium

Employees are entitled to a minimum vacation premium of not less than twenty-five (25%) percent over their regular salary during the vacation period, as indicated in Art. 80 of the Federal Labor Law.

Daily Paid Employees

To calculate the vacation premium based on 25% and a salary of MXN 200 per day (MXN 10,400 per year):

1. MXN 10,400 divided by 52 days = MXN 200 daily pay rate
2. MXN 200 daily pay rate multiplied by 0.25 (25%) = MXN 50
3. MXN 50 multiplied by six vacation days (first year) = MXN 300 vacation premium
4. For each day of vacation time taken, the pay for that day would be increased by MXN 50 in addition to the MXN 200 daily pay rate for a total of MXN 250 per day.
5. For additional years of employment, the number of vacation days will change in Step 3 above.

Note: that in the instance of daily paid employees, the vacation days must be taken on their regularly scheduled workdays. For this reason, the employer would be paying for 52 workdays per year but only receiving 46 days of work during the second year of employment. By year 15, the employer would be paying for 52 days of work, but only receiving 34 days of work. For this reason, most people prefer to hire a person who is self-employed and operating a business registered with the Hacienda as such.

See Related Article: Supreme Court Orders Social Security for Domestics

Weekly Salaried Employees

To calculate the vacation premium based on 25% and a salary of MXN 1,400 per week (MXN 72,800 per year):
1. MXN $72,800 divided by 365 days = MXN 199.45 daily pay rate
2. MXN 199.45 daily pay rate multiplied by 0.25 (25%) = MXN 49.86
3. MXN 49.86 multiplied by 6 vacation days (first year) = MXN 299.16 vacation premium
4. For each day of vacation time taken, the pay for that day would be increased by MXN 49.86 in addition to the MXN 199.45 daily pay rate for a total of MXN 249.31 per day.
5. For additional years of employment, the number of vacation days will change in Step 3 above.

Vacation days do not have to taken on consecutive days.

Misunderstandings

There is an assumption by some that the vacation premium is a bonus that must be paid in cash at the end of the year for any vacation days not taken. Worse yet, some are led to believe that if an employee works the days of their vacation that they must be paid double for those days. However, this is not the case and employees should never be paid in cash, as without records of payments, employers can find themselves in court, with only their word against the employee. And, since the Mexican Labor Law is clearly pro-employee, the employer is not likely to win.

Employees are often under the impression that if he/she did not take vacation days during the year, that they are due payment of the salary and premium for those days that were worked instead of used for vacation. An example using the wages from above on an employee who had completed his/her first year. In some instances, an employee may convince an employer to pay them an extra six days of salary (MXN 1196.70) plus the 25% premium (MXN 299.16) for a total of MXN 1,495.86. The employee would be in error in this instance.

Again, under the Mexican Labor Law, accrued vacation time shall not be compensated with money, and the employee must take time off to receive the vacation day premium.

If you have employees, you should be registered with the Hacienda as a business and have signed contracts with your employees that are written by an attorney specializing in labor law.