Mexico
[Updated 4/11/24] Mandatory employee benefits in Mexico include vacation pay, profit sharing, seniority premiums, and registration with Mexico’s social security system, which entitles employees to free medical care and other social provisions. Supplementary employee benefits include life insurance, AD&D, major medical, retirement plans, food vouchers, and commuting services and support. Salary levels in Mexico are much lower than in other parts of the world. This fact makes it even more critical for companies to create benefit packages that help recruit and retain valuable employees.
Country Insight
Mandatory Employee Benefits
Health
All employees must register with the Mexican Institute for Social Security (IMSS). By being registered, they are entitled to free medical attention, including outpatient, maternity, disability, and injury benefits.
Retirement
CONSAR is the National Commission for the Pension System, and its fundamental task is to regulate and supervise the pension system (SAR). Each worker owns an individual account in which contributions are mandatory for the employer, the government, and the employee. Retirement age is 65 years, and early retirement age is 60 years.
Life
The employee is granted life insurance coverage through The Mexican Institute for Social Security System (IMSS). Labor law indicates that when the cause of death is a labor risk, the employer/IMSS must pay the beneficiaries 2 months of salary for funeral expenses.
Disability
Through IMSS, the employee is granted disability coverage for labor risk, which includes temporary disability, total and permanent disability, permanent partial disability, and disability due to disease/accident that is different from labor risks.
PTO
These benefits include vacation days, bank holidays, maternity leave, breastfeeding terms, adoption and adoption, and paternity leave.
Supplementary Employee Benefits in Mexico
Some companies in Mexico have decided to grant their employees a more comprehensive provision of benefits. There is no minimum benefit level, nor are there any specific types of perquisites (benefits). For example, each company offers its workers different guarantees, usually determined by the industry.
Life Insurance
Group life insurance plans are granted for companies with 10+ employees. The underwriting process, coverage, special clauses, participation age, and premiums may vary according to the group size.
Total and Permanent Disability (Long-Term Disability)
If the employee has a total and permanent disability, they are entitled to:
- A lump sum payment equal to or lower than the basic benefit. Formerly, this benefit was paid to the insured as a monthly pension. Due to the Mexican peso exchange rate and interest rates, the benefit was changed to a lump sum.
- A waiver of premiums where the employee remains insured with the same basic coverage without paying any insurance premium.
AD&D
AD&D benefits can be granted through a life insurance or personal accident policy.
Funeral Expenses
Including additional coverage for covering the employee’s last expenses has become more common within the life insurance policy. This benefit ranges between US$2,000 and US$7,000.
Major Medical Insurance
Figures from the Mexican Association of Insurance Companies (AMIS) show that at the beginning of 2022, over 12.5 million people were medically insured by an employer. Ninety-five percent of the global companies in Mexico grant a major medical benefit to their personnel, while only 65% of Mexican companies grant this provision. Note that this benefit is typically given to non-unionized employees.
Dental and vision benefits are usually provided through major medical insurance companies, though some companies acquire them independently.
Minor medical insurance to a ‘services grant’ offers some primary care and imaging coverage through a closed network managed by the insurance company.
Retirement
Employees are encouraged to save a certain amount of their monthly salary each year. Typically, the company will match the percentage the employee saves up to 13% of the employee’s salary if they follow certain rules.
Perks
Common employee perks in Mexico company cars for certain executives, dining hall services, gasoline vouchers, loan services, sport club memberships, and punctuality and productivity bonuses.
This information about employee benefits in Mexico is provided by Fidex, Asinta’s employee benefits consulting partner in Mexico.