Mexico increases paid vacation days for all employees [Updated]

The Mexican senate recently approved a bill doubling the minimum employer-paid vacation days from 6 to 12 days after one year of service for all employees in Mexico. The change entered into effect on 1 January 2023.

Key details

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 6^th 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
1	12
2	14
3	16
4	18
5	20
6-10	22
11-15	24
16-20	26
21-25	28
26-30	30
31-35	32

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.

Next steps

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.