Legislative initiative in Mexico to modify working hours to 40 hours per week.

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Legislative initiative in Mexico to modify working hours to 40 hours per week.

02 May 2023

The Mexican Congress approved a ruling to amend Article 123 of the Constitution and establish that employees have the right to two days of rest per week. In other words, the weekly workday is reduced to 40 hours. Let us remember that currently the Federal Labor Law (FLL) establishes a maximum legal workday of 48 hours per week and 8 hours per day for 6 consecutive days.

What will be the challenges for companies with this change in the working day?

The implications for companies of the reduction of working hours would be significant. But, undoubtedly, the main challenge they would face in the event that any of the aforementioned bills advance in the Senate is to maintain and balance the operation of the company without increasing its costs too much.

Of course, the reduction in working hours would not affect all companies equally. This will depend to a large extent on each economic sector or industry. Thus, companies that have a high labor force and depend on it will have a greater impact.

Likewise, this will open the door to having to renegotiate the clauses referring to working hours within the collective bargaining agreements. This will result in companies having to renegotiate with unions.

In case the initiative is approved, the Companies will have to think about the following scenarios:

Reorganize employees' shifts.
Recalculate vacation bonus and overtime payments for each employee.
As well as hiring more personnel to maintain the organization's operability at the appropriate levels.

Failure by the Company to comply with the reform may result in the payment of undue overtime and, consequently, the imposition of penalties and fines.

From the Environmental, Social and Governance (ESG) perspective, if the reform is approved, it is considered that it will bring greater welfare for workers. By reducing the working day, there will be a balance between work and personal life. Likewise, as paradoxical as it may seem, it is considered that this well-being of employees will increase the Company's productivity.

In order to comply with the reform, if approved, companies must analyze the following points:

Analyze the work schedules and working hours of employees.
Review internal processes in order to streamline, modernize and even automate processes.
Analyze the number of workers on the payroll, the type of shifts they are covering and the gaps that will arise in the event of reducing working hours.

Hogan Lovells is ready to assist you with this matter.

Authored by: Hugo Hernández-Ojeda, Luis Adrián Rosas, Mariana Ávila, and Juan Pablo Vázquez