What You Need to Know About Employee Benefits in Mexico

U.S. and other manufacturers operating in Mexico have the advantage of having a skilled industrial workforce in place ready to start production. However, recruiting and retaining the most qualified employees requires offering a competitive compensation package. In addition to salary, benefits are of equal importance when determining the cost of labor in Mexico and establishing what will attract top candidates.

Companies must implement both mandatory benefits as well as voluntary offerings to entice valuable workers. A few of the mandatory employee benefits required in Mexico are similar to those in the U.S., such as social security, retirement fund, and paid national holidays. However, Mexico also requires employers to pay a Christmas bonus and vacation premium to their employees.

The Christmas bonus is equal to 15 days’ worth of pay annually or a proportioned percentage for employees who have less than a year with the company. The vacation premium is calculated by multiplying a minimum of 25% of an employee’s daily salary by the number of vacation days.

Then, there are voluntary benefits to consider. These vary and are not required by law but are typically expected. The most common include:

• Productivity bonus – A year-end bonus is a common voluntary benefit given to employees who meet the established company goals. It helps provide an additional incentive for employees and fosters healthy competition in the workplace.

• Medical insurance – Healthcare coverage and prescription drug vouchers are other voluntary benefits offered by companies that want to be viewed as competitive by potential job candidates.

• Paid meals and food vouchers – Depending on the size of the company, some pay for daily meals, while others offer a break room equipped with kitchen appliances for employee use during mealtime. Additionally, grocery store food vouchers are another common voluntary benefit to help workers offset their monthly food costs.

Furthermore, benefits may include the use of a company car to higher-level employees and/or educational opportunities for job growth. It depends on how compensation packages and policies are structured on a per-company basis. When deciding which to offer, it’s best to partner with a shelter services company like IVEMSA that can guide the process.

At IVEMSA, we calculate fully burdened salaries, which include mandatory and voluntary benefits, as well as state and federal taxes. This helps companies budget for necessary costs of labor in Mexico. The combined experience, connections, and insight of our team of experts help recruit and retain the best candidates in the timeframe needed. It saves manufacturing companies time, money, and resources while allowing them to stay focused on production.

Workers are likely to be loyal to a company when the compensation is competitive. In addition to outlining Mexico labor rates to expect, we manage all HR administrative responsibilities associated with the hiring and retaining of employees. We ensure companies provide the benefits required by law in Mexico, as well as recommend the voluntary benefits that will help attract the best.

For more information about the cost of labor in Mexico, as well as the HR services as part of a full shelter solution, contact IVEMSA today.