Mexican worker benefits consist of both government mandated and non-mandated fringes.
These days in the maquiladora industry on the U.S. – Mexican border, the average starting wage for a production worker is in the area of $2.85 per hour. Of this amount, up to forty-percent can be paid out in the form of Mexican worker benefits. Some fringes paid to laborers in the maquiladora industry are government mandated, while the payment of others is dependent upon competitive conditions that are particular to specific labor markets.
The eight Mexican worker benefits most valued by the country’s laborers are:
1. Health Insurance
Health insurance provided through Mexico’s Social Security Institute (IMMS) is a government mandated benefit. Only those Mexican workers laboring in the economies formal sector have access to it. Because of this limitation, approximately sixty million Mexicans do not have access to the services provided by the Instituto Mexicano de Seguro Social.
In Mexico social insurance contributions for health are partly paid by the employer and partly paid by the employee. In each payroll accounting period maquiladora employers must deduct the appropriate amount for each employee, and sent that amount to IMMS in order to cover workers’ insurance for medical care.
2. Vacation Pay
Mexican worker benefits include vacation pay that is mandated by the federal government. After one year on the job, maquiladora employees are entitled to six days of paid vacation. After the first year, the employee receives an additonal two days of paid days off until reaching a maximum of twelve. Beyond this an employee accrues an additonal two days of vacation after each additional five years of service completed.
Some companies choose to pay a Vacation Bonus. This can take the form of an additional twenty-five percent of the workers’ salary paid for each day of day off.
Mexican worker benefits include training as established by Article 132 of the Federal Labor Law. Article 132 states that, “companies have the obligation to provide workers with the training that is necessary to carry out their assigned tasks.”
Although many companies make an effort to reduce training expense by hiring experienced workers, training of Mexican workers is a strong motivational incentive and increases retention of quality employees.
4. Aguinaldo (Christmas Bonus)
This mandatory benefit must be equivalent to at least fifteen days of a worker’s salary, and must be paid to individuals on an annual basis prior to December 20th. Mexican worker benefits in this category are paid to laborers with less than one year on the job as the December payment deadline are compensated in a proportional amount.
Although the aguinaldo is a Christmas Bonus, some companies, as a part of their individual policies, choose to make this payment in advance of the deadline.
5. Coupons or Vouchers
Although providing coupons or vouchers of a predetermined value is not mandated by Mexican law, companies in certain competitive labor markets may choose to offer them to their maquiladora workers. These could include nominally valued for coupons to purchase food, medicine or transportation services. It is also customary in some markets, particularly along the U.S. – Mexico border to provide cafeteria service as part of workers’ compensation. This may include one, or two, hot meals a day.
6. Catastrophic Medical Insurance
Companies often provide insurance to take care of major medical issues. Mexican worker benefits in this area are often delivered by private medical groups, rather than through the government’s Social Security physicians and hospitals.
7. Savings Fund
This is a federally mandated worker benefit in Mexico whose purpose it is to encourage savings for retirement in Mexico among the country’s workforce. Workers can save a percentage of their pay during each pay period. This is matched with an employer contribution.
8. Productivity Bonus
Many maquiladora manufacturers in Mexico choose to motivate their direct labor employees through the use of productivity bonuses for meeting certain quotas and levels of production.
The aforementioned items are a mix of both government mandated and non-mandated benefits. In the latter category, companies contemplating entering Mexico should consult with local experts in labor issues to ascertain what is competitive in their specific area or areas of interest.