Termination and Notice Periods in Mexico: An HR Perspective

Navigating employment termination in Mexico requires careful attention to legal requirements under the Federal Labor Law (Ley Federal del Trabajo). As international HR professionals, understanding these regulations is crucial for compliant workforce management.

Notice Period Requirements

Mexican labor law does not mandate specific notice periods for employment termination. However, most employers follow best practices by providing one to two weeks' advance notice to employees.

Severance Pay Regulations

The Federal Labor Law Article 47 outlines justifiable grounds for termination without severance, including: submission of false documentation, workplace violence, harassment, disciplinary violations, confidentiality breaches, repeated unexcused absences, safety protocol violations, and working under substance influence.

When termination occurs without just cause, employers must provide written notice, pay statutory severance, and register the termination with labor authorities. Failure to follow proper procedures constitutes illegal termination, allowing employees to seek reinstatement or full severance compensation.

Indefinite-Term Employees

Employees under indefinite contracts terminated without cause are entitled to reinstatement or comprehensive severance including:

90 days of integrated daily salary
20 days' salary per year of service
Seniority premium: 12 days' base salary per year (capped at twice minimum wage)
Outstanding payments (vacation pay, Christmas bonus, etc.)

Fixed-Term Employees

Early termination of fixed-term contracts triggers different compensation structures:

Contracts under 1 year: 50% of remaining contract salary plus 90 days' pay
Contracts exceeding 1 year: 6 months' salary for first year plus 20 days per additional year and 90 days' pay

Termination Process Guidelines

Proper termination procedures help mitigate legal risks and ensure compliance.

Mutual Agreement Termination

Parties may execute written termination agreements
Labor court registration is optional but recommended for documentation

Unilateral Termination

Provide written notice specifying termination date and grounds
Deliver notice directly to employee or file with labor court 5 days prior
Failure to notify constitutes presumption of unjust dismissal

Unemployment Benefits System

The Mexican Social Security Institute (IMSS) administers unemployment benefits for eligible workers.

Eligibility Requirements
- IMSS-registered employees facing termination or unjust dismissal
- Excludes independent contractors and unregistered workers
Benefit Structure
- Calculation based on contribution history and salary base
- Limited duration payments determined by individual circumstances
Application Process
- Submit required documentation to IMSS
- Undergo eligibility verification and approval process

Companies like SailGlobal provide essential support for international employers navigating Mexican labor regulations, ensuring compliance while managing global workforce transitions effectively.

Mexico Employment Termination Guide: Severance, Notice Periods & Labor Laws