What you need to know about the increase of vacation days to employees.

On November 4, 2022, the Mexican Senate approved an amendment to the Federal Labor Law that increased employee annual vacation days. Such amendment, in essence, represents an increase of six days in each bracket of years of seniority.

The chart shows the vacation days before and after the amendment:

The House of Representatives must approve the amendment. Once approved, it will be sent to the President for approval and publication in the Federal Official Gazette. The amendment is expected to be effective as of January 1, 2023.

Due to the proposed changes, once the amendment is published, we recommend you take the following actions:

1. To inform the employees about the increase in vacation days. To avoid the accumulation of vacation days, employees should be informed about the company’s vacation management policy.
2. Once the amendment is in force, grant, when due, vacation periods of at least 12 continuous days.
3. Considering that the accumulation of vacations might represent an important impact on the company, we recommend preparing a chart to identify the vacation days that are due and the payment that is outstanding.
4. If any employee has accumulated vacation days, we recommend implementing a strategy to pay and grant vacation days to avoid the accumulation of days for the next work anniversary.
5. Although the vacation premium percentage is not increased (currently, 25%), the payable amount will increase due to the fact that more days will be paid as vacation days, which may have an effect on the base salary for the payment of the social security quotas.
6. Confirm the impact of the reform in (a) quotas paid to the Mexican Institute of Social Security (IMSS, its Spanish acronym), (b) quotas paid to the National Workers’ Housing Fund Institute (INFONAVIT, its Spanish acronym), and (c) payroll tax.

Alejandro Pedrín   |   apedrin@tplegal.net
Héctor Torres-López   |   htorres@tplegal.net
Leobardo Tenorio-Malof   |   ltenorio@tplegal.net
Mauricio Tortolero   |   mtortolero@tplegal.net
Alejandro Ceballos   |   aceballos@tplegal.net
Elio Sánchez   |   ecsanchez@tplegal.net
Iván Curiel-Villaseñor   |   icuriel@tplegal.net
Raúl Escamilla-Sanromán   |   rescamilla@tplegal.net
Isaac Zatarain-Valenzuela  |  Izatarain@tplegal.net