Labour Reform: Reduction of Working Week to 40 Hours Reaches Mexican Senate

Mexico’s Senate has received a historic Labour Reform initiative to gradually reduce the working week to 40 hours, aiming to align with OECD and ILO international standards. This initiative guarantees no salary reduction and establishes a progressive timeline until 2030, while simultaneously introducing key fiscal and financial support measures for the adaptation of MSMEs.
Mexico is among the countries with the highest number of hours worked within the OECD (Organisation for Economic Co-operation and Development), with an average of 48 hours per week compared to the average of 37.2. This initiative, presented to the Mexican Senate on 3 December this year, seeks to align with international standards and recommendations from the ILO (International Labour Organisation), which promote a 40-hour working week without a reduction in pay.

Initiative

The most relevant aspects of the initiative are as follows:

i. Gradual reduction of the constitutional working week
The working week will be progressively reduced by two hours over the next four years:

• 2027: 46 hours
• 2028: 44 hours
• 2029: 42 hours
• 2030: 40 hours

ii. Guarantees for workers
• There will be no reduction in wages or benefits.
• The 40-hour limit is enshrined in the Constitution.
• Prohibition of overtime for minors.

iii. Regular and overtime hours
• Maximum of 12 hours per day, including regular and overtime hours.
• Voluntary overtime shall be between 9 and 12 hours per week.
• New cap of up to 4 triple hours in the Federal Labour Law.

iv. Mandatory electronic registration
• Employers must implement digital systems to monitor working hours.
• The STPS (Ministry of Labour and Social Welfare) will issue the corresponding operating rules.

v. Mandatory electronic registration
• Expected effective date: 1 May 2026.

vi. Proposals to support MSMEs
• Tax benefits: preferential income tax, full payroll deductibility, partial crediting of IMSS contributions.
• Temporary tax credits and accelerated VAT refunds.
• Creation of a Federal Fund for Productivity and Labour Adjustment.
• Training, digitisation and labour retraining programmes.
• Special monitoring commission to assess sectoral impacts and inflation.

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