Employment Practice Group I July 3, 2024

Law Reform on Labor Exploitation

On June 7th, 2024, a reform to the General Law to Prevent, Punish and Eradicate Crimes related to Human Trafficking was published in the Official Gazette of the Federation. Under this amendment, exceeding the permitted work hours and overtime as mandated by the Federal Labor Law may now be considered a crime, punishable with prison and fines.

Exceeding the weekly legal work limits established by the Mexican Federal Labor Law may now be considered labor exploitation.

In Mexico, employers may extend the work shift under special circumstances, however, overtime is limited to a maximum of three additional hours per day and cannot occur more than three times in a week. This overtime must be compensated at twice the regular hourly wage.

Requiring overtime beyond the limit of nine hours per week could potentially be classified as labor exploitation.

This is despite the Federal Labor Law’s requirement that any overtime exceeding nine hours per week must be compensated at 200% above the employee’s regular salary, effectively requiring that employers pay triple the standard rate for such excess hours.

Penalties for Non-Compliance

Employers who violate these regulations may face penalties, including:

• Fines: Ranging from 5,000 to 50,000 fine days (días multa). A fine day is equivalent to the net daily income of the sentenced person at the time of the crime, considering all income sources.

• Imprisonment: Ranging from 3 to 10 years.

Penalties may increase by up to 50% if the affected workers belong to vulnerable groups, such as:

• Pregnant Women;
• People with physical or psychological disabilities;
• Minors;
• Senior citizens; and/or
• Members of indigenous and Afro-Mexican communities.

It is important for companies to keep in mind that there is a current legislative initiative proposing the reduction of the weekly work shift from 48 to 40 hours. If this initiative is approved, it will add to compliance requirements and heighten the risk of companies inadvertently engaging in labor exploitation.

Recommended actions

It is recommended for employers to:

• Audit its employment agreements and documents, specifically those relating to work shifts and overtime; 

• Evaluate its current work shifts to identify any potential risks; 

• Review their current working hours and prepare contingency plans in preparation for a reduction of the work shift from 48 to 40 hours per week.