Mexico’s Federal Labor Law (Annual Leave)

Employees are entitled to:

• Six paid vacation days after one year of employment
• Eight paid vacation days after two years of employment
• 10 paid vacation days after three years of employment
• 12 paid vacation days after four years of employment

Basically, after one year of employment, an employee adds two years to their vacation entitlement until the fourth year of employment, after which an employee is entitled to 14 days of vacation. Two more days of paid vacation are added every fifth year thereafter. Twenty-two days of vacation are afforded to employees who have been employed for 25 to 29 years. Employees must take their vacation period within six months of the anniversary of their employment, on the day mandated by their employer. Vacation pay calculation During this vacation period, employees are entitled to a cash vacation bonus, known as a vacation premium. This vacation premium is equivalent to 25% of the worker's salary in addition to the worker's regular pay. This vacation premium may be paid either during the employee's vacation or after a year of service. If an employer terminates an employment contract without just cause, the employee may file a claim for wrongful dismissal. If the employee wins their case, they may be entitled to a payout of their paid time off in their severance pay package. This package must include three months’ wages, plus a seniority premium if it applies. A seniority premium is a bonus that is equal to 12 days of wages per year of service. The employees who receive a seniority premium are those who have worked at least 15 years of continuous service with the same employer.