Employment Agreement Requirements in Mexico

Backdating, currencies, and classifications.

Updated on December 20th, 2022

Can employment agreements be backdated in Mexico? 

No, employment agreements cannot be backdated in Mexico. Supported employees must start working once the onboarding process (including enrollment to social security system entities) is completed. Please note that the supported employee will not be covered by social security until their official start date. 

Employment agreements in Mexico are not at will. This means that upon termination, statutory severance will be triggered.

Can a supported employee work before their start date?

No, this is not possible.

Can we pay the salary in a different currency than the local currency?

No, the salary must be paid in Mexican pesos (MXN). Salaries cannot be paid in United States dollars (USD) or any other currency.

Should we classify our talent as a contractor or an employee?

In simple terms, classification status comes down to whether the individual is in business for themselves or under your company's control. Whether the individual is an independent contractor or an employee can sometimes be complicated and will come down to the circumstances of each working arrangement.

Specifically, courts look at the following factors to determine whether an individual is an employee or a contractor:

  • Whether or not the individual exclusively provided services to the company
  • The degree of control the company had over the individual’s work (including where, when, and how to perform the work under the employment agreement)
  • Whether the individual was required to supply their own tools and equipment
  • Whether the individual hires their own helpers to complete necessary duties
  • The degree of business risk taken by the individual (e.g., their chances for profit and risk of loss)
  • The degree of integration between the individual’s activities and the company’s business

An employer has to be extra careful when it comes to classification status as misclassification may lead to legal liabilities/penalties.