Reduction of Working Time

Key points

The reform not only reduces hours, but redefines the structure of overtime and establishes absolute wage protection.

• New Maximum Working Time: The 40-hour working week limit is constitutionalised.
• Mandatory Graduation: The reduction is not immediate from 48 to 40; it will be implemented in a 5-year scheme (2026-2030).
• Wage Shield: It is strictly forbidden to reduce workers' wages under the pretext of reduced working hours.
• New Overtime Regime:
  • Limit of 12 hours overtime per week, distributable in up to 4 hours per day, in a maximum of 4 days in that period.
  • 100% additional pay (double) up to 12 hours.
  • 200% additional pay on top of ordinary salary (equivalent to triple salary) if 12 hours limit is exceeded.
• Total Prohibition: Minors under 18 years of age are prohibited from any kind of overtime.
• Reform of the Federal Labour Law: To be reformed within 90 days of the publication of this Decree, i.e. by 3 June 2026.

Implementation Schedule 

This is the most important point for financial and human resources planning. The reduction will be 2 hours per year every 1 January:

Critical Implications for Business 

From a legal and compliance perspective, businesses should prepare for the following impacts:

• Increase in Unit Labour Cost: As wages remain the same, but hours worked decrease, the cost per effective hour of labour increases. If a company does not optimise its processes, it will see a direct impact on its profit margins.
• Shift and Workforce Restructuring:Companies with 24/7 or continuous production schemes will no longer be able to cover the week with the current rotations. This will involve:
  • Hiring additional staff to cover time "gaps".
  • Redesign of individual contracts and internal work rules.
• Rigidity in Overtime: The new limit is 4 hours per day, maximum 4 days per week. Exceeding 12 hours per week obliges the employer to triple pay immediately.
• Risk of Litigation: Any attempt to "adjust" the salary to compensate for the reduced hours will be considered a termination of the employment relationship attributable to the employer, which would result in the payment of legal indemnities.
• Hidden cost in overtime: This implies an increase in the social burden as the base salary contribution will be affected by the increase in overtime expenses. Also, the cost of payroll tax will be impacted.

Recommendations for Immediate Action

It is advisable not to wait until 2027 to act. The 90 days Congress has to reform the Federal Labour Law will bring even more specific secondary rules.

1. Workday Audit: Review how many of your current employees actually work 48 hours and who are already close to 40-42.
2. Productivity Analysis: Assess whether automation or process improvement can absorb the loss of man hours.
3. Contract Update: Prepare annexes to employment contracts to document the gradual transition of working hours.
4. Timekeeping: Implement foolproof digital timekeeping systems, as the cost of mismanaged overtime will be prohibitive.
5. Unions: Review the Collective Bargaining Agreement to identify if there are any clauses that clash with the graduality (e.g., already agreed 45-hour working days that could be affected earlier than planned).

At ECIJA Mexico we provide comprehensive advice on Labour Law and Social Security, understanding that this reform transcends the administrative to impact the operational and financial heart of your company. Given the complexity of this new constitutional paradigm, we are at your disposal to carry out specific impact analyses, issue strategic recommendations and accompany you in the technical implementation of the new working day schemes. Our objective is to ensure that your transition to 40 hours is carried out under a framework of strict legal compliance, mitigating litigation risks and optimising the productivity of your human capital.

Tania Avila

Partner at ECIJA Mexico