The legislation intends to improve the wellbeing and work-life balance for employees, especially as for years Mexico has been one of the countries in the world offering the lowest statutory paid vacation days to employees.
The accrual of vacation days
The law entitles all existing and new hire employees to 12 vacation days (instead of the current 6) after one year of service. For the first 5 years of service, employees will accrue 2 additional vacation days per year. Beginning with the 6th year of service, employees will accrue 2 additional vacation days per 5 years of service for a maximum statutory requirement of 32 vacation days.
Vacation Accrual Illustration
|Year of Service||No. of Vacation Days|
In addition, the law requires, in any year of service, that at least 12 working days must be taken in a single block to effectively disconnect from work.
Employers must carefully revise their existing leave programs, employment contract templates, and any applicable collective agreements to comply with the new requirements. In addition, employers will need to budget for the increased cost resulting from the doubling of the vacation days as well as the 25% vacation premium which is integrated into base salary for social contribution purposes as well as being payable both during the vacation and in the event of termination.