Employment Agreement Options in Mexico

Types, seniority, noncompetes, and more.

Updated on December 20th, 2022

Can we add company-specific information to the employment agreement? Will Velocity Global review these updates?

No. Due to strict outsourcing regulations in Mexico, we cannot add client-specific information to the employment agreements. The labor relationship will be between the supported employees and Velocity Global. 

What are the types of employment agreements we can offer? (e.g., fixed-term, indefinite, project-based)

Velocity Global primarily offers indefinite agreements.

The Federal Labor Law (FLL) presumes, as an overall principle, that an employment agreement will be for an indefinite term, except where the nature of the specific service warrants a different type of employment agreement. An employment agreement for a term of a different type can be put into place only under particular circumstances, such as if a worker is appointed to impermanently fill in for another employee or other specific cases defined by the labor law.

An employment agreement for a specific job and for a particular period will only be deemed valid by the Mexican labor authorities if the activities covered by such contracts do not fall within the permanent activities of the employer. Therefore, it is necessary to analyze the services to be performed by the supported employee to determine the type of contract.

Please note: We do not recommend using fixed-term contracts. We can only facilitate them if it is for a project-based contract. 

Can we recognize seniority in Mexico?

No, we cannot honor seniority in Mexico. 

Can we include benefits in the employment agreement?

Yes, benefits can be included in the employment agreement, and it is common to do so. We include all benefits in the employment agreement.

Can we add variable compensation to the employment agreement? 

We do not recommend including variable compensation language in the employment agreement. However, it could be included in a Variable Compensation Agreement once you state in writing that you will assume the risk of the inclusion and enforcement of the payments on certain dates.