How to hire employees in Mexico
If you have decided to set up a new business operation in Mexico, you need to consider the workplace culture and legal environment in that country. Here we set out key information about recruiting and hiring in Mexico.
Hire a new workforce in Mexico
Expanding your international human resources in Mexico
With the largest city in North America, consistent economic growth and as a conduit between the English-speaking and Spanish-speaking Americas, Mexico is a prime location for global expansion.
However, expanding your business and hiring in Mexico means thinking about the best way to acquire and hire the staff that will best serve your business. Here we look at the distinctive workplace culture and compliance environment in Mexico, and how this might affect your onboarding process.
Workplace culture in Mexico
While there may be some similarities between the Mexican workplace environment and work culture in other countries in the Americas, some key elements you should be aware of include:
- Business relationships. Business in Mexico is built on networking and personal relationships. As building trust is essential, it is common to chat about personal and non-work/business matters in Mexico before discussing the specific task at hand. Don’t be surprised if Mexicans would prefer to conclude business matters/contracts in person, rather than on the phone or online;
- Terms of address. Formal address is important in business interactions in Mexico, at least initially. Until indicated otherwise, it is important to use the formal term of address for men of Señor [Last Name], and Señora [last name] for women. As an employee speaking to an employer, or when dealing with a significantly older individual, a particularly respectful term in Mexico is Don [first name], for men, and Doña [first name] for women;
- Time management. While all attendees are expected to arrive at a meeting, or the workplace, on time, it is common for meetings to extend longer than planned and to discuss matters that are not on the agenda;
- Dress. Dress is relatively formal, though it does depend somewhat on the state and city. In Mexico City or Guadalajara, a suit would be expected. In warmer, coastal, cities, such as Mérida or Cancún, a slightly more relaxed dress standard may be acceptable;
Working hours. Historically a maximum of 48 hours (a 6-day work week) has been normal, but the 40-hour work week is becoming more and more common.
How to recruit and onboard new employees in Mexico
As in most countries, when taking on new employees by hiring in Mexico, you have the option whether to set up a new local legal entity in Mexico (such as a company), or to engage a global Professional Employer Organization to hire and act as the ‘Employer of Record’ of your workforce. By engaging a global PEO, employees still work solely for your enterprise, but the global PEO takes care of recruitment and all employment compliance obligations.
Employer obligations In Mexico
The workplace in Mexico is generally more tightly regulated than in its North American cousins. Most requirements are set out in the extensive ‘Federal Labor Law’ or ‘FLL’. Key obligations of employers that all businesses should be aware of before employing individuals in Mexico include:
- Job stability. Employment cannot be terminated ‘at will’ as it sometimes can be in the United States. Employees can generally only be dismissed with just cause;
- Employment contracts. It is mandatory in Mexico for all employees to be hired according to the terms of a written employment contract. Essential terms of this contract include name, tax ID number, domicile, term (e.g., whether permanent or temporary), services to be provided, salary/wages, any fringe benefits and sickness and vacation leave;
- Social Contributions. Employers are required to register and make contributions on behalf of employees to the Mexican Institute of Social Security (IMSS), the Retirement Savings Programme, the National Workers’ Housing Fund Institute, and the National Fund Institute for Workers’ Consumption;
- Non-discrimination. Mexico has strong protections for employees against discrimination and employers cannot discriminate against employees on the basis of sex, race, nationality, age, religion, disability, immigration status, health, sexual orientation, political affiliation, or social status.