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Notice period in Mexico

Employee termination in Mexico

Non-compete post-termination restraints in Mexico

Waivers in Mexico

Transfer of undertakings in Mexico

Minimise risk and missed opportunities with our end-to-end employment solutions

When does employment end in Mexico?

Employment in Mexico can end for various reasons, ranging from mutual agreements and voluntary resignations to employer-initiated terminations or unforeseen circumstances like the closure of a business. Mexico’s labor laws provide clear guidelines to ensure that employment relationships conclude fairly and in compliance with legal requirements.

These regulations aim to protect both employees and employers, ensuring proper procedures are followed and that workers receive any benefits or compensation they are entitled to upon termination. Understanding the circumstances under which employment can end and the legal obligations involved is essential for fostering a fair and respectful workplace.

In this guide, we will cover everything you need to know about end of employment in Mexico, including the notice period, post-termination restraints, waivers, and more.

Notice period in Mexico

In general, Mexico’s Federal Labour Law does not specify a minimum notice period for terminating employment. However, in certain cases, employers are required to follow specific notice procedures:

Dismissal due to misconduct in Mexico

If an employee is being terminated for misconduct, the employer must:

Provide the employee with a written notice within 30 days of discovering the misconduct.
Clearly state the reasons for dismissal in the written notice, detailing the actions that justify termination.
If the written notice is not issued directly to the employee, it must be delivered to the local labour board, which will notify the employee.

This written notice ensures that the employee understands the grounds for termination and provides legal documentation in case of a dispute.

Termination without cause in Mexico

While not legally required, it is common practice for employers to provide a two-week notice when terminating an employee without cause. This is considered a professional courtesy and helps maintain goodwill between the employer and the departing employee.

Resignation in Mexico

Similarly, employees are not legally obligated to provide notice when resigning, but a two-week notice is customary as a professional courtesy to allow the employer to prepare for their departure.

Severance pay in Mexico

When an employee is terminated without just cause, Mexican labour law requires the employer to provide severance pay. The severance package must compensate the employee for the abrupt end to their employment and includes the following components:

Base severance payment: Employees are entitled to receive three months’ worth of their regular salary as the base severance payment.
Additional payment for years of service: Employees with more than 15 years of service are entitled to 20 days’ pay for every year of service beyond the initial severance payment.
Seniority premium: For employees with at least 15 years of service, a seniority premium of 12 days’ pay per year of service is added to the severance package. This premium recognises the employee’s long-term contribution to the company.

Employers must calculate these payments carefully and ensure timely disbursement to avoid legal disputes. It is important to note that severance pay is not required in cases of voluntary resignation or termination for just cause.

Probation period in Mexico

Probation periods in Mexico are optional and must be clearly stated in the employment contract if implemented. These periods allow employers to evaluate a new employee’s skills, performance, and suitability for the role before confirming their permanent employment.

For permanent employees, the probation period is typically 90 days but can vary depending on the nature of the job and the terms agreed upon in the contract.

On the other hand, for executive or managerial positions, probation periods may extend up to 180 days under certain conditions.

During the probation period, employers have the opportunity to assess whether the employee meets the job requirements, monitor performance, and determine if the employee fits into the company culture and team dynamics.

If the employee does not meet expectations during the probation period, the employer can terminate their contract without the need for severance pay, provided that the termination is justified and documented.

Employee termination in Mexico

In Mexico, the concept of at-will employment—where employers can terminate employees without cause or notice—does not exist. Under Mexican labour law, termination of employment must be justified, and employers cannot simply end an employment relationship without following established legal procedures. This is to protect employees from unfair dismissal while providing clear guidelines for employers.

Termination without just cause is prohibited

Employers in Mexico are generally required to provide a valid and legally recognised reason to terminate an employee. Unlike at-will employment systems, where terminations can occur at the discretion of the employer, Mexican labour law ensures that dismissals are justified, transparent, and fair. Termination without just cause exposes employers to significant legal liabilities, including the obligation to provide severance pay.

Interestingly, termination at will is only applicable to employees. An employee can resign voluntarily at any time without needing to provide a reason, although it is customary to give notice as a professional courtesy.

What are the just causes for termination in Mexico?

The Mexican Federal Labour Law provides a specific and exhaustive list of reasons that qualify as just cause for terminating an employee. Employers must strictly adhere to these guidelines to avoid legal and financial repercussions. Here are some primary reasons for terminations:

False statements about work qualifications: If an employee provides false information about their skills, qualifications, or experience during the hiring process, it constitutes just cause for termination. For example, falsely claiming to hold a degree or specific certification that was a requirement for the job could justify dismissal.
Breach of honesty or disobedience principles: Employees who engage in dishonest behaviour or repeatedly fail to follow legitimate instructions from their employer can be terminated. This includes acts of insubordination or refusal to perform assigned tasks without valid reasons.
Vandalism: Deliberate damage to company property or assets is a serious offense that justifies termination. This could include acts such as destroying equipment, defacing company property, or intentionally disrupting business operations.
Sexual harassment: Sexual harassment in the workplace is prohibited and grounds for immediate dismissal. Employers are also encouraged to implement clear policies and training programs to prevent such behaviour and protect all employees.
Alcoholism in the workplace: Reporting to work under the influence of alcohol or consuming alcohol during work hours without authorisation is considered just cause for termination. This rule is in place to maintain workplace safety and productivity.
Revealing company secrets: Disclosing confidential information or trade secrets to unauthorised parties is a serious breach of trust. This includes sharing sensitive business data, client information, or proprietary technologies, which can harm the company’s competitive advantage.
Refusing to comply with safety procedures: Employees who fail to follow established workplace safety protocols put themselves and others at risk. Noncompliance with safety measures, especially in high-risk industries like construction or manufacturing, is grounds for dismissal.
Unexcused absences: An employee who has four unexcused absences within a 30-day period may be terminated for just cause. Employers must document these absences to ensure they are justified in taking disciplinary action.

Termination process in Mexico

To lawfully terminate an employee for any of the reasons listed above, employers must follow a structured process, such as:

Document the misconduct
Employers must gather evidence of the employee’s actions or behaviour that justify termination. This could include written warnings, reports from supervisors, or other relevant documentation.
Issue a written notice
A written notice must be delivered to the employee or the local labour board within 30 days of the employer becoming aware of the misconduct. The notice must clearly state the grounds for termination and provide detailed evidence or examples of the misconduct.
Notify the labour board (if applicable)
In cases where the employee refuses to accept the termination notice, the employer must file the notice with the local labour board, which will then notify the employee

Non-compete post-termination restraints in Mexico

Post-termination restraints such as non-compete, customer non-solicit, and employee non-solicit agreements are generally not legally enforceable. This legal stance is rooted in the country’s labor laws, which prioritize the protection of employees’ freedom to work and earn a living. However, despite their non-enforceability, these clauses are often included in employment contracts for practical and strategic reasons.

Non-compete clause in Mexico

The Mexican Constitution and Federal Labour Law emphasise an individual’s right to work and earn a living. Restricting an employee’s ability to pursue employment opportunities, even in the same industry, is viewed as a violation of this fundamental right. As a result, employers cannot legally prevent former employees from joining competitors or starting their own ventures.

Despite their non-enforceability, non-compete clauses are often included in employment agreements for their deterrent effect. These provisions can:

Serve as a moral reminder to the employee of their commitment to the company.
Dissuade employees from immediately competing with their former employer out of a sense of obligation or professionalism.

Customer non-solicit agreements in Mexico

Similar to non-compete clauses, customer non-solicit agreements are not enforceable under Mexican labour law. Employees cannot be legally restricted from reaching out to former clients once their employment ends.

Even though they are unenforceable, customer non-solicit clauses are still frequently included in employment contracts to:

Highlight the importance of protecting the company’s client base.
Create a sense of ethical responsibility for the departing employee to avoid poaching clients.

Employee non-solicit clauses in Mexico

Under Mexican labour law, employers are prohibited to restrict a former employee’s ability to interact with or recruit current employees after their departure. Such restrictions are seen as an infringement on individual rights to freedom of association and employment.

Although they lack legal enforceability, employee non-solicit clauses are often included in employment contracts as a preventive measure. They can:

Serve as a reminder of professional ethics and loyalty to the company.
Dissuade departing employees from attempting to recruit their former colleagues.

Waivers in Mexico

Waivers in employment contracts are legally allowed, but with strict limitations. While employees and employers can agree on certain terms or conditions within the scope of their working relationship, employees cannot waive their right to receive mandatory benefits or legally protected rights. This restriction ensures that all workers are treated fairly and have access to the protections guaranteed under Mexican labour law.

While mandatory benefits cannot be waived, certain non-essential terms or conditions in an employment contract can be adjusted through mutual agreement. Examples of waivers or agreements that may be enforceable include:

Adjusting work schedules or locations for flexibility.
Waiving the right to certain discretionary bonuses or non-statutory perks in exchange for other benefits.

These waivers must be clearly stated in the employment contract, and both parties must agree voluntarily, without coercion or undue pressure.

Transfer of undertakings in Mexico

Employment transfers in Mexico are formalised through a substitution of employer process, which typically requires the issuance of an employer substitution letter. This document serves as a legal acknowledgment of the change in employer and establishes the continuity of the employment relationship. For the substitution to be legally effective, the following key conditions must be met:

Transfer of business assets: The substitution of employer is only valid if the assets related to the business—such as equipment, facilities, or intellectual property—are also transferred to the new employer. This ensures that the transfer is not simply a change on paper but reflects a genuine continuation of the business operations.
Employee rights and conditions are maintained: Employees must retain all their existing benefits, such as salaries, vacation entitlements, bonuses, and seniority. The terms and conditions of their work, including job roles, responsibilities, and hours, must also remain unchanged after the transfer.
Continuity of employment relationship: The transfer does not reset an employee’s seniority or other accrued rights. For example, an employee with 10 years of service under the previous employer will continue to have those 10 years recognised under the new employer.

Joint responsibility during the transition

To further safeguard employee rights, Mexican labour law establishes a period of joint responsibility between the outgoing and incoming employers. For a period of six months after the substitution of employer becomes effective.

The previous employer remains jointly liable with the new employer for any labour obligations or disputes that arise, including unpaid wages, severance payments, or unresolved benefits.

This provision ensures that employees are not left unprotected during the transition and that any outstanding obligations are fulfilled.

If an employee files a labour claim within the six-month period after the transfer, both the old and new employers could be held accountable for resolving the issue.

Minimise risk and missed opportunities with our end-to-end employment solutions

There are many different ways an employment contract can come to an end. But whatever the situation, you need to understand the rules that cover the end of employment in Mexico — or you could end up facing legal issues.

Our solutions ensure your business is protected from risk when a relationship with a worker comes to an end — whatever the reason. We can also help you to avoid missed opportunities by re-deploying talent where possible.

Read about EoR services

FAQ's

What are the grounds for termination of employment in Mexico?

Termination of employment in Mexico is only lawful when the employer has a legally recognised cause. Mexico does not allow at-will dismissal by employers.

Under Article 47 of the Federal Labor Law (LFT), the grounds for termination of employment in Mexico are specific and limited, and the burden of proof sits entirely with the employer.

Employers can dismiss an employee without severance liability only when the employee has committed one of the following:

Providing false credentials or qualifications to obtain the job (provided the employer becomes aware of the false information within the statutory period established by the LFT).

Dishonesty, violence, threats, or mistreatment towards the employer, colleagues, or clients.

Sexual harassment directed at any person in the workplace.

Intentional damage to company property, or serious damage caused through gross negligence.

Disclosing trade secrets or confidential business information.

More than three unexcused absences within any 30-day period.

Insubordination or refusal to follow reasonable work instructions.

Reporting to work under the influence of alcohol or non-prescription drugs.

Being sentenced to a prison term that prevents the employee from working.

Failure to follow workplace safety procedures.

If the employer cannot substantiate one of the statutory grounds for termination or fails to comply with the procedural requirements established by the LFT, the dismissal may be deemed unjustified (despido injustificado). That triggers a full severance pay obligation, which can be substantial.

One thing many international employers in Mexico miss
Even when cause exists, employers must serve a written notice of dismissal (aviso de rescisión) at the time of termination or through the competent labour authority if personal delivery is not possible, in accordance with the procedure established under the LFT. The notice must state the specific cause and the date it occurred. The employer must exercise the right of rescission within the statutory timeframe established by Article 47 of the LFT. Failure to deliver this notice correctly makes the termination automatically unjustified, regardless of the underlying reason.

To summarise, Mexico only permits employer-initiated termination on specific grounds listed in Article 47 of the FLL. If the cause cannot be proven in writing, the dismissal is treated as unjustified and full severance pay becomes due. Documentation is not optional; it is the difference between a compliant exit and a costly dispute.

Is there a notice period for termination of employment in Mexico?

There is no statutory notice period in Mexico that employers must give before terminating an employee. Under the Federal Labour Law, employers are not required to give advance warning before a dismissal takes effect. However, this does not mean termination can happen without any formality.

What the law does require is a written notice of dismissal delivered at the moment of termination or filed with the Labour Board within five working days if the employee cannot be reached. That notice must clearly state the specific grounds for dismissal and the date the relevant incident occurred.

What about notice for employees in Mexico?

Employees who wish to resign are also not legally required to give a notice period, though employment contracts or collective agreements may specify one. If an employee leaves without giving contractually agreed notice, the employer may have a civil claim for damages, but this is separate from the statutory framework.

Probationary periods in Mexico and their impact

Mexico does allow a probationary period during which employment can be ended with fewer obligations:

Standard roles: minimum 30 days.

Management or specialist roles: up to 180 days.

During this window, if the employee does not meet the role requirements, the employer can end the contract without paying the full severance package. The employee is still entitled to their finiquito (accrued pay and proportional benefits) for the period worked.

The practical takeaway for employers in Mexico
The absence of a mandatory notice period does not reduce compliance risk. Getting the written dismissal notice right, with the correct cause, date, and delivery method, is what determines whether the termination of employment in Mexico is legally sound.

In summary, Mexico has no statutory employer notice period before dismissal. What the law requires instead is a correctly drafted written termination notice served at the time of dismissal. Probationary periods of up to 90 days (or 180 days for senior roles) offer some flexibility for early exits, but accrued benefits are always owed.

How does a fixed-term contract end in Mexico?

A fixed-term contract in Mexico ends automatically when the agreed period expires, without either party needing to serve notice or take any formal action.

Under the Federal Labour Law, fixed-term contracts (contratos por tiempo determinado) are permitted only when the nature of the work genuinely requires a defined duration, such as covering a leave of absence, completing a specific project, or meeting a seasonal demand.

This matters because Mexican labour authorities scrutinise fixed-term arrangements carefully. If the work is ongoing rather than temporary, the contract may be reclassified as indefinite, which significantly changes the end-of-contract obligations.

What happens when the contract in Mexico ends naturally?

When a fixed-term contract reaches its agreed end date, the employee is entitled to their finiquito, which includes:

All salary owed up to the final day.

Proportional Christmas bonus (aguinaldo).

Accrued unused vacation days plus the 25% vacation premium.

No additional severance pay (liquidación) is owed when the contract ends as planned and both parties were aware of the fixed duration from the outset.

What if the employer in Mexico ends the contract early?

Early termination of a fixed-term contract without a legally recognised cause may trigger compensation obligations under the LFT. The specific calculation should be assessed based on the contract type, duration, and applicable legal provisions in force at the time of termination.

A common risk to watch

If a fixed-term contract is renewed multiple times or if the employee continues working beyond the end date without a new agreement, Mexican courts will likely treat the relationship as an indefinite contract. At that point, the end of contract in Mexico carries the same obligations as ending a permanent role.

In short,Fixed-term contracts in Mexico end automatically at the agreed date, with only the finiquito owed. Early termination without cause triggers additional severance. Repeated renewals or allowing work to continue past the end date can convert the contract into an indefinite one, changing the full scope of employer obligations.

What payments are due to employees at the end of employment in Mexico?

Every employee in Mexico is entitled to a set of payments when their employment ends, regardless of whether they resigned, were dismissed with cause, or were dismissed without cause. The specific amounts depend on the circumstances of the separation.

Payments owed in all separations (finiquito)

The finiquito is the baseline settlement every departing employee receives. It covers:

Payment	What it includes?
Accrued salary	All wages earned up to the last day worked
Proportional aguinaldo	Christmas bonus pro-rated for the portion of the year worked
Unused vacation days	Calculated based on years of service (12 days in year one, increasing with tenure)
Vacation premium (prima vacacional)	25% bonus on the value of accrued vacation days
Profit sharing (PTU)	Proportional share of company profits for the year, where applicable

Additional payments for unjustified dismissal (liquidación) in Mexico

When an employer ends the employment relationship without a legally valid cause, the employee is also entitled to:

Constitutional indemnity: 3 months of integrated daily salary (Salario Diario Integrado).

Seniority premium: (prima de antigüedad), where applicable under the LFT. Additional compensation that may arise under specific circumstances contemplated by the LFT or as determined through labour proceedings.

Back pay (salarios caídos) and applicable interest: subject to the rules established under the current version of the LFT. Important to note: the 3-month constitutional indemnity is non-waivable under Mexican law. Any agreement asking an employee to accept less is legally void.

For employers managing severance pay in Mexico, these figures can add up quickly, particularly for long-serving employees. Calculating them correctly using the Salario Diario Integrado (see Q6) rather than the base daily salary is essential to avoid underpayment disputes.

Keep in mind thatall employees in Mexico receive a finiquito covering accrued salary, proportional bonuses, and unused leave. Unjustified dismissal adds a mandatory severance package including 3 months’ integrated salary, a seniority premium, and potentially 20 days per year of service. The 3-month payment cannot be negotiated away.

When is severance pay required in Mexico?

Severance pay in Mexico is required in any situation where the employer ends the employment relationship without a legally justified cause. As Mexico does not recognise employment-at-will, employers must ensure that any termination complies with the grounds and procedures established by the LFT.

Situations that require severance pay

Severance pay (liquidación) is owed in the following circumstances:

Unjustified dismissal: the employer terminates without one of the causes listed in Article 47 of the LFT.

Failed proof of cause: the employer claims just cause but cannot provide sufficient documented evidence before the labour authority.

Procedural failure: the employer fails to deliver the written termination notice correctly or on time, making an otherwise valid dismissal legally unjustified.

Constructive dismissal: the employer creates conditions that force the employee to resign, such as withholding wages, harassment, or unilaterally changing the terms of employment. Under Article 51 of the FLL, the employee can treat this as a dismissal and claim the same severance entitlements.

When is severance not required in Mexico?

Severance pay is not owed when:

The employee resigns voluntarily (only the finiquito applies).

The employer proves just cause under Article 47 and follows the correct notice procedure.

A fixed-term contract ends at its agreed date.

Both parties reach a mutually agreed settlement ratified before the labour authority, provided all statutory rights are properly settled.

A key point for employers in Mexico
Even where grounds for termination exist, failure to comply with statutory procedural requirements may result in the termination being challenged as unjustified. . The employer generally bears the burden of proving the grounds for termination and compliance with the applicable legal procedure.

Severance pay in Mexico is triggered by unjustified dismissal, failed proof of cause, procedural errors in the termination process, or constructive dismissal. It is not owed on voluntary resignation or when a fixed-term contract ends as planned. The employer carries the burden of proof in all cases.

What is the Salario Diario Integrado and how is it used in severance calculations?

The Salario Diario Integrado (SDI), or Integrated Daily Salary, is the figure used to calculate severance pay in Mexico. It is not the same as an employee’s basic daily wage. Under Article 84 of the Federal Labor Law, the SDI must include all regular payments the employee receives, not just their base salary.

This distinction matters because using the wrong figure leads to underpayment, which can result in disputes or additional liability if the employee challenges the calculation before a labour authority.

What the SDI includes?

The SDI incorporates the daily base wage plus the proportional value of:

Christmas bonus (aguinaldo): minimum 15 days per year, divided across 365 days.

Vacation premium (prima vacacional): 25% of the proportional vacation entitlement.

Food vouchers (vales de despensa): if provided regularly.

Recurring commissions or bonuses: any payment made habitually as part of the compensation package.

Housing or transport allowances: if paid consistently.

Whether a particular benefit forms part of the SDI depends on its legal treatment under labour and social security regulations and should be assessed on a case-by-case basis. It does not include one-off payments, expense reimbursements, or extraordinary bonuses that are not part of the regular compensation structure.

How is the SDI calculated?

The SDI is derived by applying an integration factor to the daily base salary. As a simplified example:

The applicable integration factor varies depending on the employee’s statutory and contractual benefits and should be calculated individually. This SDI figure is then used across all key severance calculations:

Severance component	Calculation
Constitutional indemnity	SDI x 90 days
20 days per year (if applicable)	SDI x 20 x years of service
Seniority premium	SDI (capped at twice minimum wage) x 12 x years of service

Employers should ensure that severance calculations are based on the legally applicable salary concept. Incorrect calculations may expose the employer to claims for unpaid compensation. In summary, the Salario Diario Integrado is the full daily compensation figure used for all severance pay calculations in Mexico. It includes base salary plus the proportional value of regular benefits. Using the base salary alone understates the correct figure and creates legal exposure.

Can employers enforce a non-compete clause in Mexico?

Non-compete clauses in Mexico are not automatically enforceable. The Federal Labour Law does not include any provision for non-compete agreements, and Mexican courts have historically viewed them as restrictions on an individual’s constitutional right to work and to freely exercise their profession.

That said, the position is not a blanket prohibition. The Mexican Supreme Court has ruled that non-compete agreements can be enforceable in limited circumstances, but only when specific conditions are met.

When a non-compete in Mexico may hold up?

For a non-compete clause to have any chance of being upheld by a Mexican court, it generally needs to satisfy all of the following:

Proportionate compensation: the employee must receive meaningful financial consideration specifically for agreeing to the restriction, beyond their regular salary.

Limited duration: the restriction must be time-bound and reasonable in length.

Geographic scope: it must be limited to a defined and justified territory, not applied globally or nationwide without reason.

Specific activity: it should target a narrowly defined competitive activity, not broadly restrict the employee from working in their field.

Mexican courts have historically been reluctant to enforce post-termination non-compete restrictions because they may conflict with the constitutional right to work (Article 5 of the Mexican Constitution). Any assessment of enforceability is highly fact-specific and should be reviewed on a case-by-case basis.

What about confidentiality and non-solicitation in Mexico?

Confidentiality obligations and non-solicitation of clients or employees are generally treated more favourably under Mexican law than non-competes. These are worth considering as alternatives or complements when protecting legitimate business interests after an employee’s departure.

The bottom line for employers in Mexico: including a non-compete clause in a Mexican employment contract does not mean it will be enforced. Employers seeking to protect confidential information, trade secrets, customer relationships, or workforce stability should prioritise well-drafted confidentiality, intellectual property, and non-solicitation provisions, which generally present a lower enforceability risk under Mexican law.

Any restrictive covenant should be reviewed by local counsel before implementation.

Key summary:Post-employment non-compete clauses are not expressly regulated under Mexican labour law and may face enforceability challenges. Employers generally achieve stronger protection through confidentiality, trade secret, intellectual property, and non-solicitation provisions.

What is the difference between a finiquito and a liquidación in Mexico?

A finiquito and a liquidación are two distinct payments in Mexico and understanding the distinction is critical when managing employment terminations. They are not interchangeable terms for the same thing.

Finiquito: the baseline payment for every exit in Mexico

The finiquito is the settlement owed to every employee when their employment ends, regardless of the reason. Whether the employee resigned, was dismissed with cause, or was dismissed without cause, the finiquito is always due.

It covers everything the employee has earned but not yet received:

Salary for days worked in the final pay period.

Proportional Christmas bonus (aguinaldo).

Accrued unused vacation days.

Vacation premium (25% of the vacation value).

Proportional profit sharing (PTU), where applicable.

Think of the finiquito as closing the account: it settles what was earned during the employment relationship.

Liquidación: the additional severance for unjustified dismissal in Mexico

The liquidación is an additional payment on top of the finiquito. It is only owed when the employer terminates the employment relationship without a legally valid cause (despido injustificado).

The liquidación includes:

3 months of integrated daily salary (constitutional indemnity, non-waivable).

Seniority premium (prima de antigüedad): 12 days of salary per year of service, subject to the statutory cap established under the Federal Labour Law. Additional compensation that may arise under specific circumstances established by the Federal Labour Law or ordered by a labour court.

Side-by-side comparison

	Finiquito	Liquidación
When it applies	All separations	Unjustified dismissal only
What it covers	Accrued earnings and benefits	Constitutional severance package
Can it be waived?	No	Statutory entitlements cannot be waived in advance under Mexican labour law
Calculated using	Days worked and tenure	Applicable statutory salary basis, including SDI where required by law

The key point: in an unjustified dismissal in Mexico, the employee receives both. The finiquito closes out what was earned; the liquidación compensates for the unlawful end to the employment relationship.

Key summary: The finiquito is the baseline settlement owed in every employment separation in Mexico. The liquidación is additional severance owed only when the employer terminates without legal cause. An employee dismissed without justification receives both, calculated using the Salario Diario Integrado.

What is the 60-day rule for challenging dismissal in Mexico?

The 60-day rule in Mexico refers to the window an employee has to file a formal challenge after they believe they have been wrongfully dismissed. Under Article 518 of the Federal Labour Law, claims arising from dismissal generally prescribe after two months (approximately 60 calendar days) from the date of termination.

This is a critical deadline for employers to understand. It defines how long the risk of a reinstatement order or additional severance claim remains active after a dismissal.

How the process works?

The challenge process does not go directly to a labour court. Mexico’s 2019 labour reform introduced a mandatory conciliation stage that must happen first:

Employee files a claim with the Federal Centre for Labour Conciliation and Registration (CFCRL) within 60 days.

A conciliation hearing is scheduled.

If conciliation fails, the employee can proceed to the Labour Court to seek reinstatement or severance

At the Labour Court stage, the employer bears the burden of proof. The employer must demonstrate that the dismissal was justified under Article 47 and that the correct written notice was served. If the employer cannot do this, the court will declare the dismissal unjustified.

What the employee in Mexico can claim?

If the dismissal is found to be unjustified, the employee has two options:

Reinstatement to their previous role under the same conditions, plus back wages (salarios caídos) from the dismissal date, capped at 12 months.

Full severance pay (liquidación), including the 3-month constitutional indemnity, 20 days per year of service, seniority premium, and back wages.

One important note on the statute of limitations
While the 60-day window applies to initiating the conciliation process, employees technically have up to one year from the dismissal date to file a formal court claim. The 60-day rule is the more operationally relevant deadline because it governs when the conciliation process must begin.

To summarise, dismissed employees in Mexico have 60 days to initiate a wrongful dismissal challenge through the mandatory conciliation process. If conciliation fails, they can proceed to a labour court where the employer must prove just cause. A successful challenge can result in reinstatement or full severance pay plus back wages.

What are the benefits of partnering with CXC for employment termination in Mexico?

Managing the end of employment in Mexico involves more moving parts than most international employers anticipate. Getting the grounds right, calculating severance pay correctly, serving the dismissal notice within the legal window, and handling the finiquito and liquidación accurately all need to happen in the right sequence. A single procedural error can turn a compliant exit into an expensive dispute.

CXC has been managing compliant employment relationships across more than 100 countries for over 30 years, including Mexico. Here is what that means for employers navigating termination in Mexico.

What CXC handles for you?

Compliant termination documentation
We prepare and serve the aviso de rescisión correctly, ensuring the grounds, date, and delivery method meet the requirements of the Federal Labor Law. This removes the most common source of unjustified dismissal findings.

Accurate severance calculations
We calculate all payments using the correct Salario Diario Integrado, not just the base salary. That covers the finiquito, constitutional indemnity, seniority premium, and any applicable 20-days-per-year component, so there are no underpayment disputes after the fact.

Fixed-term contract management
We structure and monitor fixed-term contracts to ensure they reflect genuine temporary needs and are not inadvertently converted into indefinite arrangements through renewal or continuation past the agreed end date.

Risk assessment before you act
Before any termination of employment in Mexico, our team reviews the circumstances, the documentation, and the likely exposure. You go into the process knowing what the costs are and where the risks sit, not finding out after a claim is filed.

Ongoing workforce compliance
Beyond individual terminations, we help you maintain compliant employment structures across your Mexican workforce, covering contracts, benefits, payroll, and classification, so that exits are cleaner when they do happen.

Working with CXC means you have a team that understands how Mexico’s labour framework operates day to day, not just in theory. Whether you are managing a single exit or restructuring a team, we handle the detail so you can focus on the outcome.

Talk to our team about employment termination in Mexico.

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