Mexico has taken a historic step in modernizing its labor market. Following the reform of Article 123 of the Constitution and the subsequent amendment of the Federal Labor Law, the country is embarking on a path towards a maximum of 40 working hours per week, gradually abandoning the 48-hour model that has been in place for decades.
Although the reduction will be gradual until 2030, the reform signifies much more than a decrease in working time. It introduces new obligations for companies regarding labor organization, electronic timekeeping, and management of overtime, which will require many organizations to rethink their processes well in advance.
A gradual schedule to facilitate adaptation
With the goal of minimizing the impact on economic activity, lawmakers have chosen a phased implementation.
The weekly working hours will be reduced by two hours each year starting January 1, 2027, following this schedule:
- 2026: 48 hours per week.
- 2027: 46 hours.
- 2028: 44 hours.
- 2029: 42 hours.
- 2030: 40 hours.
Throughout this process, the reduction in hours cannot result in a decrease in workers’ salaries, meaning companies will need to absorb this change through better organization, productivity increases, or, in certain cases, new hires.
More than just working fewer hours
While public debate has focused on the reduction in working hours, the real scope of the reform goes much further.
Companies will need to review shift planning, workload distribution, and the use of overtime to maintain their production levels without violating the new legal limits.
Industries such as manufacturing, logistics, hospitality, retail, and services, where physical presence and operational continuity are essential, are expected to be among the most affected by this transformation.
The reform does not impose a single model for distributing the 40 weekly hours, providing companies with some leeway to reorganize their schedules within the framework established by labor legislation.
New rules for overtime
Another significant aspect of the reform concerns overtime work.
The regulation anticipates a gradual increase in the maximum authorized overtime hours, rising from the current nine hours per week to a maximum of twelve by 2030.
The first overtime hours will continue to be paid at a 100% premium over the regular wage, while any hours exceeding the legal limit will be compensated at a 200% premium, significantly increasing the cost of regularly relying on this option.
Consequently, systematically depending on overtime will cease to be an efficient solution for many companies, which will need to adopt a more balanced planning approach to their human resources.
Mandatory electronic timekeeping starting in 2027
One of the main novelties will be the mandatory implementation of electronic timekeeping for work hours.
Beginning January 1, 2027, companies will be required to have systems in place that reliably record the actual working time of each employee, thereby facilitating inspection activities and compliance with regulations.
For many organizations, this will require investments in technological solutions, process digitization, and a review of their internal time management policies.
A challenge for Spanish companies operating in Mexico
The reform will be particularly significant for Spanish companies active in Mexico, one of the main destinations for Spanish investment in Latin America.
Subsidiaries will need to assess in advance the impact that the gradual reduction of working hours may have on their labor costs, productivity, and team organization.
Key issues they will need to analyze include:
- reorganizing shifts and work calendars;
- the potential need to expand staffing;
- investment in timekeeping systems;
- automation of certain processes;
- reviewing costs associated with overtime.
Anticipating these changes will help minimize the economic impact of a reform that will gradually transform the operations of numerous companies.
A structural transformation of the labor market
Beyond the reduction of working time, the reform represents a profound change in Mexican labor regulation and brings the country closer to international standards concerning work organization and worker protection.
For companies, the challenge will not only consist of complying with a new hourly limitation but also adapting their organizational models to maintain competitiveness in an environment where efficiency and productivity will become even more important.
With a four-year transitional period, organizations have time to prepare. However, those that begin planning their adaptation now will face the change with greater guarantees and less economic impact when the new obligations come fully into effect.
