Last month, a new amendment in Mexico classified work shifts exceeding nine hours of overtime per week as labor exploitation. Part of Mexico’s Human Trafficking law, the new rule carries significant penalties for non-compliance.
HR Policy Global’s take: Employers must understand the importance of complying with the new amendment to avoid penalties and potential imprisonment for labor exploitation. The timing is also interesting as a bill proposing the reduction of the weekly work shift from 48 to 40 hours is still pending.
The big picture: The amendment took effect on June 8th, a day after being published in the Official Gazette of the Federation, allowing no response time for employers. The new rule requires the following important considerations:
- Mexico’s Federal Labor Law (FLL) sets the standard workweek limit at 48 hours for day shifts, 45 hours for mixed shifts (7.5 hours per day), and 42 hours for night shifts (7 hours per day). Work shifts can also be negotiated within individual employment agreements.
- The FLL allows overtime of up to nine hours per week. Overtime must be paid at twice the regular pay rate. Overtime beyond the maximum allowed is not permitted, although regulations require compensation at triple the regular rate for overtime that exceeds nine hours per week.
- For work shifts exceeding nine hours of overtime per week, the new amendment also establishes a penalty of three to ten years of imprisonment and a fine of 5,000 to 50,000 fine days. The penalties increase to four to twelve years of imprisonment and a fine of 7,000 to 70,000 fine days when the affected workers belong to indigenous or Afro-Mexican peoples or communities.
- Anyone, including authorities like the Instituto Mexicano del Seguro Social (IMSS) and Mexico’s Ministry of Labor and Social Welfare, can report alleged illegal overtime work. Accused individuals could face prison during the process and anyone in a company’s chain of command may be liable.
To make it more complicated, a bill proposing the reduction of the weekly work shift from 48 to 40 hours is still pending. If approved, this change will further impact compliance requirements and increase company risk of inadvertent labor exploitation.
Action Plan for Employers: To mitigate the risk of criminal liability for labor exploitation, employers should:
- Review overtime practices and consider restructuring shifts to minimize overtime when necessary.
- When overtime is necessary, keep tracking records, and document written authorizations and applicable payments.
- Train managers to avoid generating overtime beyond legal limits.
