Labor Regulations in Mexico for Startups: Everything You Need to Know
When a startup begins to grow in Mexico, one of the most important challenges is complying with labor regulations . Although many operations initially focus on the sales and product side, labor legal compliance is key to avoiding penalties and ensuring healthy labor relations from the outset.
This article offers you a clear and up-to-date guide to the labor obligations that every startup in Mexico should be aware of.
1. Employer Registration with the IMSS
Every company that hires employees must register with the Mexican Social Security Institute (IMSS) as an employer. This registration allows employees to be registered for social security and other benefits.
- Official IMSS website: www.imss.gob.mx
2. Written Employment Contracts
Although some startups operate informally, written employment contracts are required under the Federal Labor Law . Contracts must specify:
- Type of contract (fixed, indefinite, per project, etc.)
- Working day
- Salary
- Obligations and rights
See article 24 of the Federal Labor Law : LFT DOF 2023
You can also visit our article for more information on Types of Employment Contracts in Mexico and their Legal Implications.
3. Registration in INFONAVIT and RFC with the SAT
As an employer you must also:
- Register workers in INFONAVIT .
- Register them in the Federal Taxpayers Registry (RFC) .
These processes allow employees to access housing loans and comply with their tax obligations.
4. Payment of Worker-Employer Contributions
The employer must cover various fees for:
- IMSS (social security)
- INFONAVIT (housing)
- SAR (Retirement Savings System)
This represents an additional percentage of the worker’s salary, so it must be considered in the initial budget.
Fee Calculator: IDSE – IMSS Digital
5. Obligations of NOM-035 and Prevention of Psychosocial Risk
Starting in 2019, all companies in Mexico must comply with NOM-035-STPS , which establishes guidelines for identifying, analyzing, and preventing psychosocial risk factors in the workplace.
- This applies even to small or growing businesses.
- Includes surveys, diagnostics and follow-up actions.
6. Anti-discrimination Policies and Gender Equality
Startups are also subject to compliance with legislation related to:
- No discrimination based on race, gender, age, sexual orientation or disability.
- Equal pay and opportunities.
Check out CONAPRED’s recommendations: www.conapred.org.mx
7. Working Hours and Overtime
The Federal Labor Law establishes the limits for the working day:
- Maximum 8 hours per day (daytime).
- Double or triple pay for overtime.
It’s important to keep track of schedules, especially in startups where enthusiasm can lead to long hours without fair pay
8. Work Licenses and Permits
Startups must respect:
- Maternity/paternity leave .
- Sick leave or death leave .
- Holidays in accordance with the amended article 76 of the LFT
9. Preparation and Issuance of Payroll CFDI
From the outset, it is mandatory to issue Digital Tax Receipts (CFDI) for payroll online , which requires an accounting system or an external provider to assist with the correct issuance.
SAT requirements for payroll CFDI: SAT CFDI 4.0
You can visit our article for more information: Complete Guide to the Payroll CFDI in Mexico and its Compliance with the SAT
10. Get Proper Training and Advice
Complying with labor laws isn’t optional. For startups without a legal team, it’s advisable to:
- Go to specialized human resources offices.
- Use platforms like Global Touch for labor compliance advice
Conclusion
Understanding and applying labor regulations in Mexico is key for a startup to scale healthily and sustainably. Failure to comply can result in fines, labor lawsuits, and damage to the brand’s reputation.
By incorporating good labor practices from the start, you not only comply with the law, but you also create a fair, attractive work environment aligned with your company’s growth.