Paid leave in Mexico is more complex than many employers expect, especially when hiring in the country for the first time. Vacation, sick leave, public holidays, parental leave, and other statutory absences all have different eligibility rules, payment requirements, and funding sources. Some employee benefits are paid directly by the employer, while others are covered through Mexico's social security system.
Understanding who pays for each type of leave is only part of the equation. Employers must also register employees with IMSS and make the required social security contributions. Otherwise, they can become responsible for benefits that would normally be paid through the system.
Overview of Paid Leave Laws in Mexico
Two laws govern paid leave in Mexico. The Federal Labor Law (Ley Federal del Trabajo) establishes employees' leave entitlements, while the Social Security Law determines when benefits are funded through the Mexican Social Security Institute (IMSS).
Together, these labor laws provide employees with annual vacation, public holidays, sick leave, maternity and paternity leave, and several other protected absences. Every entitlement established by law is a minimum requirement.
Employers also have the option to provide more generous benefits that go beyond the statutory amounts, and many opt to do so to attract and retain top talent.
Understanding who pays for each type of leave is just as important as understanding the entitlement itself.
Annual Vacation Leave
Employees in Mexico are entitled to a minimum of 12 working days of paid annual leave after one year of continuous service.
The entitlement increases by two working days for each additional year of service until it reaches 20 days, then by another two days for every five years of service thereafter.
Employees have the right to take at least 12 consecutive days of vacation. Any remaining days can be taken throughout the year. Vacation is measured in working days, so if a mandatory public holiday falls during an employee's vacation, it doesn’t count against their time off.
Vacation Premium (Prima Vacacional)
In addition to their regular wages, employees are entitled to a vacation bonus, known as a vacation premium. The premium must equal at least 25% of the wages employees earn during their vacation. In other words, employees must be paid at least 125% of their normal wage for vacation days.
While 25% is the legal minimum, employers may choose to pay a higher percentage.
Carryover and Payment for Unused Vacation
Employees are entitled to take their vacation within six months of their service anniversary. The law does not specify whether unused vacation expires or can be carried forward into a future year.
Employees can't exchange their statutory vacation for a cash payment while they remain employed. The law is intended to ensure employees actually take their vacation rather than receive extra pay instead. However, any accrued but unused vacation must be paid out when employment ends, whether the employee resigns or is terminated.
Employers should maintain accurate records of vacation taken, vacation premium payments, and any unused leave paid out at termination.
Sick Leave
Sick leave, or “incapacidad laboral,” is funded through the Mexican Social Security Institute (IMSS). Employers that fail to register employees or make the required social security contributions can become responsible for benefits that would otherwise be paid through IMSS.
An IMSS doctor needs to certify the employee's incapacity and determine how long the leave will last, which can range anywhere from a single day up to 52 weeks.
For a non-work-related illness or injury, the first three days are unpaid. Beginning on day four, IMSS pays 60% of the employee's salary, provided the employee has made contributions to the system for at least 7 weeks.
Work-related illnesses and injuries are treated differently. IMSS pays 100% of the employee's salary from the first day of leave, with no waiting period or minimum contribution requirement. Coverage extends for up to 52 weeks and can be extended with medical certification.
Maternity Leave and Paternity Leave
Mothers receive 12 weeks of paid maternity leave: six weeks before the expected delivery date and six weeks after birth. With a doctor's authorization and the employer's approval, up to four weeks of prenatal leave can be transferred to the postnatal period if the employee requests it.
If the employee has made at least 30 weeks of social security contributions during the 12 months before maternity leave begins, then leave is paid by IMSS. Otherwise, the employer is generally responsible for paying her salary during the 12-week leave period.
Mexican law provides strong protection against dismissal during pregnancy and maternity leave. Employers must allow employees to return to the same position under the same employment conditions after maternity leave. If an employee is dismissed during this time, the employer must be able to prove that the decision had nothing to do with the pregnancy.
New fathers receive five paid working days of paternity leave, paid by the employer. The same leave is available to the non-birthing parent in a same-sex couple.
Adoption Leave
Adoptive parents are also entitled to paid leave. Adoptive mothers receive six weeks of IMSS-funded leave beginning on the date they take custody, while adoptive fathers receive the same five paid working days as biological fathers.
Public Holidays
Mexico recognizes seven annual statutory public holidays:
- January 1: New Year's Day
- First Monday in February: Constitution Day
- Third Monday in March: Benito Juárez's Birthday
- May 1: Labor Day
- September 16: Independence Day
- Third Monday in November: Revolution Day
- December 25: Christmas Day
Mexico also recognizes two additional statutory holidays. Election day is a paid holiday when required under federal or local election law. October 1 is a mandatory paid holiday every six years for the presidential inauguration.
Employees who work on a statutory public holiday are entitled to triple pay. This includes their regular wages plus double pay for the hours worked on the holiday.
Several other holidays are widely celebrated across Mexico but are not mandatory paid holidays. These include Holy Thursday, Good Friday, May 5 (Battle of Puebla), November 2 (Day of the Dead), and December 12 (Our Lady of Guadalupe). Employees are only entitled to paid time off on these holidays if an employment contract, collective bargaining agreement, or company policy covers them.
Family and Bereavement Leave
Parents can take leave to care for a child under age 16 who has been diagnosed with cancer. IMSS pays 60% of the employee's salary, and the leave can be taken in periods of one to 28 days, up to a total of 364 days over three years.
Mexico doesn’t require employers to provide bereavement leave. Companies that offer it do so through an employment contract or company policy.
Other Types of Statutory Leave
Mexico also provides several other types of statutory leave. Some provide paid time off, while others protect an employee's job without requiring the employer to continue paying wages.
Voting and Civic Duties
Mexico doesn't have jury duty, but it does recognize leave for certain civic duties, such as serving as a polling official or working on the national census. Employees keep their jobs during these absences, although employers are not required to continue paying wages.
Election Day itself is a mandatory paid public holiday, so most employees are not scheduled to work. If an employee is required to work on election day, the statutory public holiday pay rules apply.
Military Service Leave
Employees called up for mandatory military service can take unpaid leave. When the service ends, they return to their previous position, or an equivalent one at the same pay.
One important detail: time spent serving in the military counts toward the employee's length of service. That time affects the employee's future vacation entitlement once they return to work.
Medical Appointments
Routine medical appointments are not covered by statutory leave. However, time away from work is protected when an employee visits an IMSS doctor and is certified as temporarily unable to work.
Without that medical certification, there is no statutory right to time off for a routine checkup or specialist appointment, so those absences are governed by the employer's policy or taken as personal time. Once an IMSS doctor certifies the employee's incapacity, the absence is treated as statutory sick leave and paid through IMSS.
Expectant mothers are an exception. Employers must allow them reasonable time off for prenatal medical appointments, provided they present a "justificante médico," or medical justification slip, from their doctor.
Employer Responsibilities Under Mexico's Leave Laws
Employers are responsible for calculating leave entitlements, paying employer-funded statutory benefits, maintaining accurate leave records, and complying with Mexico's leave laws.
Employees must also be registered with IMSS within five working days of their start date and at the correct contribution salary. Failing to register an employee or submitting incorrect information can leave the employer responsible for benefits that would otherwise be paid through IMSS, including maternity and sick leave.
Because employment laws change over time, employers should regularly review their leave policies, payroll practices, and employment contracts to ensure they continue to meet Mexico's statutory requirements.
Managing Paid Leave in Mexico
Managing paid leave in Mexico becomes more complex as a company grows. Vacation entitlements are based on each employee's service anniversary rather than the calendar year, and different types of leave follow different funding and payment rules. The employer funds vacation and paternity leave, while many sick leave and maternity benefits are paid through IMSS.
Keeping track of leave entitlements, IMSS contributions, payroll calculations, and statutory payments across a growing workforce is difficult without a centralized system.
Hire and Manage Employees in Mexico With RemoFirst
An Employer of Record (EOR) makes it possible to hire employees in Mexico without establishing a local legal entity. The EOR becomes the legal employer, handling employment contracts, payroll, IMSS registration and contributions, statutory leave administration, recordkeeping, and ongoing compliance with Mexico's employment laws.
As employment laws evolve, the EOR keeps payroll, leave administration, and employment practices up to date, freeing HR and payroll teams to focus on supporting employees instead of tracking regulatory changes.
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FAQs
How many vacation days do employees receive in Mexico?
Employees become entitled to a minimum of 12 working days of paid vacation after one year of continuous service. The entitlement increases by two working days for each additional year of service until it reaches 20 days, then by another two days for every five years of service thereafter.
Who pays for sick leave in Mexico?
Most statutory sick leave is funded through the Mexican Social Security Institute (IMSS). For a non-work-related illness or injury, IMSS pays 60% of the employee's salary beginning on the fourth day of leave, provided the employee meets the contribution requirements. For work-related illnesses and injuries, IMSS pays 100% of the employee's salary from the first day of leave.
Who pays for maternity leave in Mexico?
IMSS pays maternity leave if the employee has made at least 30 weeks of social security contributions during the 12 months before leave begins. If the employee does not meet that requirement, the employer is generally responsible for paying the employee's salary during the 12-week maternity leave.
Can employees cash out unused vacation time in Mexico?
No. Employees cannot exchange their statutory vacation for a cash payment while they remain employed. The law requires employees to take their vacation. However, any accrued but unused vacation must be paid out when employment ends, regardless of whether the employee resigns or is terminated.
Does Mexico require employers to provide bereavement leave?
No. Mexico does not require employers to provide bereavement leave. Companies that offer paid or unpaid bereavement leave do so through an employment contract, collective bargaining agreement, or company policy.
What happens if an employer doesn't register an employee with IMSS?
Failing to register an employee with IMSS or submitting incorrect contribution information can leave the employer responsible for benefits that would otherwise be funded through IMSS, including maternity and sick leave. To avoid that risk, employers must register employees with IMSS within five working days of their start date and make the required social security contributions based on the employee's correct contribution salary.
