Mexico tightens overtime rules and prepares shift to 40‑hour workweek

Mexico's labor reform, published on 1 May, caps overtime at four hours per week and imposes fines of up to 600,000 pesos for each violation. Companies must document overtime carefully, as the Ministry of Labor and the Mexican Social Security Institute will audit payrolls and may treat regular overtime as part of the base salary. Deloitte warned that failure to control overtime could trigger inspections and solidary liability for subcontractors.

The reform also sets a path toward a 40‑hour workweek, with companies urged to begin preparations in 2026. The transition will be phased between 2027 and 2030, requiring firms to review shift schedules, productivity metrics, costs, and legal contracts. Experts from AMCHAM highlighted the need for precise measurement of output per hour, digitalisation of repetitive tasks, and cross‑departmental involvement of HR, legal, finance and operations to ensure compliance and maintain production levels.