We are not a law firm. Do not consider our information as legal advice. This information has been summarized based on our legal inquiries. Information can become obsolete from one day to another due to changes in laws, regulations, or government procedures. Consult labor and tax attorneys for legal advice. (Note from HR Mexico staff)
Handling Vacation Days in Mexico
The law guarantees six (12) days of vacation for the first year of services. Thereafter it increases by two working days successively until reaching twenty eight (28) days, after the 21st year, as indicated in Art. 76 of the Federal Labor Law.
Here is a chart on how vacations days increase:
Year 1 = 12 days
Year 2 = 14 days
Year 3 = 16 days
Year 4 = 18 days
Year 5 = 20 days
Year 6-10 = 22 days
Year 11-15 = 24 days
Year 16-20 = 26 days
Year 21-25 = 28 days
The above schedule is the federal minimum for vacation days in Mexico. An increase in the vacation days can be negotiated into the employment contract between the employer and the employee on a case by case basis.
VACATION BONUS
Employees are entitled to a minimum vacation bonus of not less than twenty five (25%) percent over the salaries that correspond to them during the vacation period, as indicated in Art. 80 of the Federal labor law.
To calculate the vacation bonus based on 25% and a salary of $50,000 USD per year:
Question:
We have the case of an employee who has been working with us since July 12, 2010 he has by contract 17 days of vacations a year, he just took 13 hrs of vacation on December 2011, how many vacation days would he have accumulated to date if all this time he has been working and receiving his normal salary? What is the right way to manage the vacations, timing, payment and enjoyment, can the employee refuse to receive payment for vacation days from previous years?
Answer:
Year 1 = 12 days
Year 2 = 14 days
Year 3 = 16 days
Year 4 = 18 days
Year 5 = 20 days
Year 6-10 = 22 days
Year 11-15 = 24 days
Year 16-20 = 26 days
Year 21-25 = 28 days
The above schedule is the federal minimum for vacation days in Mexico. An increase in the vacation days can be negotiated into the employment contract between the employer and the employee on a case by case basis.
VACATION BONUS
Employees are entitled to a minimum vacation bonus of not less than twenty five (25%) percent over the salaries that correspond to them during the vacation period, as indicated in Art. 80 of the Federal labor law.
To calculate the vacation bonus based on 25% and a salary of $50,000 USD per year:
- $50,000 USD divided by 365 days = $136.99 USD daily pay rate
- $136.99 USD daily pay rate multiplied by 25% = $34.25 USD
- $34.25 USD multiplied by 12 vacation days (first year) = $410.96 USD vacation bonus
Question:
We have the case of an employee who has been working with us since July 12, 2010 he has by contract 17 days of vacations a year, he just took 13 hrs of vacation on December 2011, how many vacation days would he have accumulated to date if all this time he has been working and receiving his normal salary? What is the right way to manage the vacations, timing, payment and enjoyment, can the employee refuse to receive payment for vacation days from previous years?
Answer:
- As a general rule, under Mexican law, accrued vacation time shall not be compensated with money, the employee shall take the actual time off.
- Because the purpose of the vacation bonus is to provide some extra money to the employee for his/her vacation expenses, the vacation bonus should be paid at the moment when the employee actually takes his/her vacation, although there exists no case law that says so.
- Vacation time continues to accrue during any given year worked. At the end of a given year, the employer has 6 months to give the employee his/her vacation time off. After those 6 months, the employee has a claim against the employer for his/her vacation time and payment of the vacation bonus. 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 accrued vacation and vacation bonus from employer.
- In the case at hand, whereby the statute of limitations has almost run on some of the vacation time accrued and the employee only claims payment of the vacation bonus on that vacation, I recommend, as an exception, that the employer can go ahead and pay the vacation bonus and let the statute of limitations run on the actual vacation time for that year. However, the employee should be informed that this is an exception and that in the future he will be expected to take his vacation time off and that the vacation bonus will be paid at that time.
