Amendments to the Mexican Labor Law in Recent Years
Over the past fifteen years, the Federal Labor Law (the “Law”) has undergone numerous changes and reforms aimed at adapting the legal framework to the reality of labor relations and to the demands of the country’s economic and social environment. These reforms have dissipated many of the historic concerns experienced by entrepreneurs, corporations and foreigners when looking to invest in a business, and although we still need to wait and see how some of these reforms will be implemented in practice, at first glance they appear to lay the groundwork for more productive labor relations in the country.
Below, we will mention some of the main topics that have changed in recent reforms to the Law, and which may affect the ordinary operations of a Mexican company:
1. Outsourcing.
The Law prohibits the outsourcing of personnel; however, it allows the outsourcing of specialized services or the execution of specialized works, provided that the services rendered by the subcontracted company:
a) are “specialized”; and
b) are not part of the corporate purpose or the main economic activity of the company receiving the services.
Individuals or legal entities that provide such specialized services must be registered in the Register of Providers of Specialized Services or Specialized Works (“REPSE”), for which they must be in compliance with their tax and social security obligations, and must renew their registration every three years.
The principle applied under Mexican labor legislation regarding labor liability remains the same; therefore, any individual or entity that subcontracts specialized services will continue to be jointly and severally liable with the subcontracted company in connection with the workers that performed the services.
2. Types of employment relationships.
In addition to employment for a specific project or fixed term and the employment for an indefinite term, the Law now also acknowledges the following types of employment relationships or work schemes:
a) Indefinite term with a probationary period and/or initial training period. These temporary agreements will give the employer an opportunity to confirm if the employee has the capabilities to fit the needs of the job or to train him for a limited period of time to see if he or she can develop the required skills. The initial training agreements could be valid for a maximum period of three months, or six months in the case of direction and management positions; while agreements subject to a probationary period will be valid for 30 (thirty) days only, and in case of management or executive positions, may be extended for a maximum period of 180 (one hundred eighty) days. It is important to note that, once an agreement of this type is executed, the initial term agreed upon may not be extended, even if such term is shorter than the maximum period allowed by the Law.
b) By season. This sort of labor relationships may be used in the case of temporary or seasonal peaks and in those cases in which the job does not implies to work in a weekly, monthly or yearly basis.
3. Remote Work.
Remote work is deemed to exist when at least 40% (forty percent) of the working day is performed remotely, outside the workplace, using information technologies. The Law introduced regulation of remote work in response to the labor changes generated by the COVID-19 pandemic, defining the bases for its implementation and supervision. The reform also establishes a series of obligations for both employers and employees, including the obligation to provide the equipment and tools necessary to perform the work, to guarantee the right to disconnect, and to regulate aspects such as working hours, occupational health and safety, and general working conditions. The regulatory framework further provides that remote work may not entail a reduction of the employees’ rights, ensuring that the same working conditions applicable in a face-to-face environment are maintained.
4. Compensation derived from the death or disappearance of the employee.
As a result of a reform enacted in 2018, the Law now contemplates a change in the calculation of the compensation to be paid in the case of death of an employee while performing his job, or disappearance as a result of a sudden criminal act in the course of or by reason of their employment, which is now equal to 5,000 days of salary (rather than only 730 times the minimum wage, which was applicable before the reform). This change is relevant in the social security dues payable the Mexican Social Security Institute, as they will most probably increase given that such fees are calculated, among other things, considering the costs of the compensation to be paid in the event of death or disappearance of an employee.
The prices of insurance policies acquired by companies will also increase, including civil liability insurance policies offered by insurance companies, since this same basis for compensation is taken into account when estimating coverage and costs for ordinary liability insurance. This concept is also relevant because it is likewise the base amount used to calculate damages in the event of any accident outside the workplace, and it is also used as a reference for other liability situations under federal civil and criminal codes.
To facilitate payment of the aforementioned compensation, employment agreements are required to indicate the names of the beneficiaries in the event of the employee’s death or forced disappearance.
5. Termination Notice.
The termination of employment is somehow eased given that, in order to terminate the employment relationship, the employer may submit the notice of termination to the labor court or personally deliver it to the employee at the time of termination. Prior to the 2012 Law reform, the notice had to be delivered directly to the employee, and there was no possibility of filing it with the competent labor authority. If the employer chooses to file it with the labor court, the court must notify the employee of the notice of termination.
Such notice must state the reason that gave rise to the termination, as well as the dates on which such acts occurred. It is important to note that once the employer issues the notice of termination, its defense in any subsequent proceeding may not be changed; therefore, the employer may not allege a cause for termination other than the one stated in the notice of termination.
6. Back Wages.
Under Mexican labor law, once a labor trial ends, and in the event that the employer is condemned, it could also be required to pay for back wages since the time of the termination and until the corresponding judgment is paid. The change in this case is that, before an amendment to the Law in the year 2012, such back wages had no limit, so the amount of the back wages’ payment was sometimes exponentially larger than the original claim; now, the payment of back wages is capped to a limited period of 12 (twelve) months’ salary. In case the trial exceeds such period and the employee prevails in its claim, as of the 13th (thirteenth) month of the lawsuit, the employee will be entitled to receive, in addition, a 2% (two percent) monthly interest calculated on an amount equivalent to 15 (fifteen) months of the employee’s salary.
7. Employer Substitution.
In 2021, the Law was once again amended to add a new essential requirement for the validity of employer substitutions, establishing that, for an employer substitution to be valid and enforceable, a transfer of the substituted employer’s assets to the new employer must take place. Previously, case law criteria and the Social Security Law merely presumed the existence of an employer substitution when: (i) the essential assets of the business were transferred with the intention of continuing their operation, and (ii) there was common majority ownership or shareholding between the companies; however, the validity of the employer substitution was not conditioned upon the formalization of such asset transfer, nor was it necessary to prove it during the substitution process.
8. Labor Courts.
One of the most relevant changes over the past decade in labor matters has been the replacement of the conciliation and arbitration boards with labor courts, a significant reform implemented in Mexico aimed at modernizing the labor justice system in the country.
The creation of labor courts entailed a fundamental change in the way labor disputes are administered and resolved, moving from a jurisdiction concentrated in the conciliation and arbitration boards to a new structure that grants jurisdiction to specialized courts, both federal and local, which now form part of the Federal Judicial Branch.
One of the main implications of this reform was the creation of a mandatory pre-trial conciliation system (the Federal Center for Conciliation and Labor Registration, or its local equivalents), which seeks to promote dispute resolution through agreement between the parties, avoiding judicialization of conflicts and contributing to the decongestion of the judicial system. If conciliation is unsuccessful, the dispute will be resolved through an oral proceeding before the corresponding labor courts.
The labor reforms implemented in recent years have had a profound impact on the structure of the Mexican labor market, adapting it to new economic and social realities and promoting a more flexible, equitable, and efficient system. These changes not only address the employees’ concerns, but also seek to create a climate of greater certainty and transparency for employers, facilitating investment and economic development. Although it is still necessary to observe how these reforms will be fully implemented in practice, the foundations have been laid to generate more productive and balanced labor relations in the country.
February 2026.
This article was originally written in 2013 by Victor Diaz and Mauricio Garza and updated in February 2026 by Emilia Cardona. Please send any questions or comments to info@jata.mx. One of the original authors was a Partner of JATA – J.A. Treviño Abogados, and the co-author is a Legal Counsel at JATA, and can be contacted at vdiaz@jata.mx, and the co-author who updated and complemented this article is a Senior Associate at JATA and may be contacted at ecardona@jata.mx. JATA is a Mexican law firm with offices in Monterrey, N.L., Mexico, and Houston, Texas.
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