Employers are compelled by Mexico’s Federal Labour Law to provide paid vacation days and a vacation premium for their employees. Prior to this new amendment, employees were entitled to six days of paid vacation after their first year of employment. The increase is in line with the Mexican government´s announcement of a goal of increasing the well-being and reducing the stress of employees nationwide.

Contractual agreements that go beyond this new minimum vacation entitlement remain unaffected by the new regulations.

The following chart illustrates the past and present vacation days of employees according to their seniority.

Although the vacation premium remains at 25%, the increased vacation days will represent an additional cost for employers, as the base salary for the payment of social security contributions and constitutional severance will increase.

Therefore, employers should evaluate their current policy of paid-time-off (PTO) as to whether to maintain vacation days according to the law and/or provide additional leave with pay that does not require the payment of the vacation premium.

Until this amendment, Mexico had the fewest vacation days in Latin America. The amendments to the Federal Labour Law will enable employees to really disconnect from work and employers to benefit from more productive and rested employees.