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How to hire remote employees in
Mexico’s become a popular spot for hiring remote talent—and a popular place for remote workers to live. If you want to hire someone out of Mexico, you’ve got two options: Hire them as an employee, or hire them as a contractor. Here’s what you should know before you make a decision.
If you want to successfully hire in
Mexico
, you have two options:
Laws about hiring contractors are significantly more simple in
Mexico
. Onboarding talent takes days, not weeks or months. Both you, the company, and your talent have more flexibility. And in many cases, since you’re remote, the talent you’re hiring is better classified as a contractor, anyway. Of course, it’s not possible in every case, but it’s what we built Thera for.
This is the long route. You can either establish a physical presence with an entity and register as an employer, or you can use an Employer-of-Record (EOR) solution. Odds are, you’ll find using an EOR to be the easier route. Still, using an EOR in
Mexico
is expensive—it can often be $500 per month per employee—and sometimes prone to lengthy onboarding times.
Hiring contractors is normally the easier, faster, more flexible choice—but don’t just take it from us. Below are the specific benefits and drawbacks to hiring contractors in
Mexico
.
Hiring employees takes months, at the minimum. When you hire with Thera's locally-generated contracts, it’s a matter of days or weeks. This means you can hire the best talent, fast, without losing them to a hellish procession of paperwork.
It costs just $0 to sign up for Thera, then $25 per month to hire your contractors with Thera. If you hired employees manually (or did contracting on your own), you’d likely be on the hook for thousands of dollars each month. Setting up an entity alone can cost tens of thousands of dollars.
Hiring contractors in
Mexico
means you’re generally not on the hook for things like health insurance and paid time off. This makes hiring flexible for you, and it gives your talent more options.
Hiring employees is a bigger commitment, and can open you up to increased liabilities and regulations. When you hire contractors overseas, your biggest risk is misclassification—but laws surrounding contractor classification are often significantly more straightforward.
The contractor life isn’t for everyone—some people want the security that being an employee often appears to provide. Though it’s rare, this does happen, and it’s one disadvantage of manage an all-contractor team.
Most countries’ contractor-employer relationship laws stipulate that the employer can’t set fixed working hours, among other things. These laws give contractors more freedom over how and when they do their work than an employee would have. In reality, however, most contractors are willing & able to work on the company’s schedule—it’s a matter of setting expectations beforehand.
If you’re hiring contractors in
Mexico
, you can pay them with Thera in a single click. You won’t need to worry about complicated wire transfers, fees, or currency conversions. We’ll take care of it all. Just make a click and your contractor will get paid in their currency of choice. This is a valuable bonus for talent in countries where the local currency is particularly weak—most people appreciate the ability to receive their payment in stronger currencies.
If you’ve read up until this point, you’ll know that it’s easier, cheaper, and more flexible to hire contractors in Mexico than employees. Still, there are valid reasons why you might want to hire employees instead. The content below is for you—we’ll cover employer taxes and obligations in Mexico.
Mandatory Vacations:
8 public holidays.
Pay is by social security based on the social security cap called “salario de cotizacion (SBC)”.
holidays for maternity leave (42 days before and42 days after birth of baby). Pay is by social security based on the social security cap called “salario decotizacion (SBC).
Male employee may take up to two weeks of paid time off following the birth of your baby.
Parental leave is not mandatory.
None.
No Info.
You may take up to 20 calendar days (4 weeks) of full paid time (base salary) following the death of an immediate family member.
No mandatory process is required, however formalization of the termination before the conciliation and arbitration court is suggested.
There are no statutory notice periods for employment contracts in Mexico.
The employer is required to notify the employee in writing of the date and cause of dismissal, or must notify the relevant Conciliation and Arbitration Board no later than five days after the date of termination.
Voluntary resignation: the employer must pay the employee all benefits that are due. If the employee has 15 years or more of seniority, the employee is entitled to 12 days’ salary for each year employed.
Termination with Cause: The employer must pay the employee all benefits that are due. In addition, 12 days of salary for each year employed.
Termination without Cause:3 month’s salary, 20 days for each year in the company, and a seniority bonus of 12 days per year of service. The employee will also receive back salary from the date of dismissal to the day that the employer complies with the Labor Board’s decision.
Optional, but the common practice is 3 months.
Full time employment is considered 8 hours daily, 40 hours weekly.
Employees who earn minimum wage can work up to 9 hours exempt per week. The following 9 hours will be paid at a rate of 200% salary, with any hour beyond that paid at a rate of 300%.
Employees that earn more than the minimum wage are exempt for only 50% of the overtime worked per week up to 5 minimum wages per week. The first 9 hours will be paid at a rate of 200% and the following hours will be paid at a rate of 300%.
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