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2531 Windward Way Chula Vista, CA 91914 Tel: (619) 427-2310 Fax: (619) 427-2312 Email: barbachano@bipsearch.com 

Web site:  http://www.bipsearch.com  OFFICE LOCATIONS: SAN DIEGO TIJUANA MEXICO CITY 

Mexico Standard and Supplemental Benefits & Perks: A General Guide

 A. - Mandatory minimum benefits offered to Mexico full time based employees (regulated by

Mexican Labor Law):

  INFONAVIT (Financial institution for government subsidized housing purchase for Mexicanemployees). An amount is deducted from each paycheck and goes to an account administeredby a Bank of the employee’s choice as a form of savings to acquire a house through thisinstitution’s housing program.

  IMSS (Instituto Mexicano del Seguro Social, a social security government entity). An amount isdeducted from each paycheck and goes to an account administered by a Bank of theemployee’s choice as a form of saving for retirement, disability insurance and to receive minorand major health care benefits subsidized by the Government.

  AGUINALDO (Christmas Bonus) is a lump sum that is equal to 15 days salary that everyemployer must provide to the employee on a yearly basis and paid during the first 20 days of

the month of December.  PAID VACATION DAYS. After the first year of employment, the employee receives a minimum

6 days paid vacation, the second year 8 days, third year 10 days, fourth year 12 days  VACATION PREMIUM. In addition to the paid vacation days, the employer must pay a premium

of 25% on top of the paid vacation days.  PAID HOLIDAYS, a total of 8 observed Mexican paid holidays.  PROFIT SHARING. If the company or entity reports a profit during the fiscal year, the employer

must share a percentage of these profits with all employees, except Directors. This according toa complex formula regulated by the Government.

  SENIORITY BONUS. A bonus must be paid to the employee after 15 years of seniority and forevery year employed. The employee has the right to receive 12 days of bonus.

  SEVERANCE PAYMENT. This is a lump sum that every employer must provide to the severed

employee “without cause.” Law mandates a 3 month’s salary and an additional 20 days perevery year employed (Pro-rated) to every employee that has been let go.

B. – Supplemental or Additional benefits (optional) offered in Mexico as a common practice forManagement and Professional level positions:

  MAJOR MEDICAL INSURANCE is paid for by the employer and provided to the employeethrough a group policy. Sometimes the employee is asked for a small contribution. Manycompanies offer this to insure their direct family members (spouse and children), as well. Attimes, the family coverage has a partial cost to the employee.

  LIFE INSURANCE. This is a very common practice and only covers employee. Typically thebenefit is one year’s salary for management and professionals and up to three times salary for

senior management.  EDUCATION REIMBURSEMENT. Employers increasingly provide support for postgraduate

studies that are directly related to current responsibilities and nature of company activities.Common practice ranges from a capped fixed amount up to a 100% reimbursement withabove average school grades.

  SAVINGS FUND. This is an amount deducted from the employee’s paycheck that is matched bythe employer at 100% and returned to the employee at the end of the year (sometimes every 6months) with additional annual interest which varies by company. This amount is capped by theFederal Labor Law for tax exempt status and it can’t be above $2,400.00 pesos/month.

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2531 Windward Way Chula Vista, CA 91914 Tel: (619) 427-2310 Fax: (619) 427-2312 Email: barbachano@bipsearch.com 

Web site:  http://www.bipsearch.com  OFFICE LOCATIONS: SAN DIEGO TIJUANA MEXICO CITY 

  FOOD COUPONS. This is a benefit that is typically provided as cash compensation(sometimes in food stamps) mainly used for groceries and department stores and it is alsocapped by the Mexican Labor Law for tax exempt status of up to $1,800.00 pesos/month.

  ADDITIONAL AGUINALDO (CHRISTMAS BONUS). Most companies offer above the 15mandatory days and can go up to 30, 45, and even 60 days salary. The average is typically 25to 30 days’ salary.

  COMPANY CAR (Vehiculo Utilitario). This is a common benefit offered to Sales executives andincreasingly to Senior Management and is considered as a basic working tool. Companiessometimes provide a leased car to employees with the benefit of purchasing this same auto atdiscounted blue book value after 3 or 4 years and receiving a newly leased car. In addition,most of the companies cover all car expenses that include car insurance, maintenance,registration fees, and license plates. In lieu of car benefit, a car allowance is also customary.

  GAS ALLOWANCE. In lieu of a cash gas allowance or gas expense reimbursement, somecompanies provide a plastic credit card (type of a device) so the employee can use it exclusivelyin registered gas stations. The employer makes the deposit when the monthly amount has beenused. For sales professionals, it can range from $2,500 pesos to $10,000 pesos depending onthe mileage used to visit clients. For non-sales employees, senior management may receivethis benefit, typically ranges between $2,500 to $4,000 pesos per month.

  STOCKS can be provided by publicly traded companies (domestic and international) as grants,stock options, preferred stock, restricted stock or an employee stock discount purchase plan.Typically reserved for senior management.

  HOUSING ALLOWANCE is provided on a monthly basis typically only to some employees thatare moved from one city to another for employment reasons. This varies from company tocompany and level of employee’s position. For existing employees, this could be for longerperiods, for new employees that are relocated this could be on a temporary basis, typically 1 to3 months.

  CELL AND LAPTOP. This is the most common practice when it is considered a basic workingtool for Sales executives, management, and professionals. Most of the companies cover the

monthly cell phone expenses and increasingly wireless or DSL internet service for certainmanagement positions.

For Executive Senior Management: Other supplemental benefits occasionally offered includeCountry Club membership including monthly quotas, Children school tuition for private schools, upto two company cars (very seldom), and travel expenses to and from country of origin on a monthlyor quarterly basis.

BENEFIT GUIDE FOR MEXICO 

The Mexico benefit information provided is only a general guideline. Determining competitive benefits for yourcompany in Mexico is a task that requires benchmarking industry sector and may be affected by many factors

including company size, location, target workforce, educational requirements, salary ranges, etc. If you requireadditional specific information or you wish to talk to a consultant, please call Barbachano International at (619)427-2310.