PREDICTIONS FOR 2026
MEXICO
2025 IN REVIEW
Workweek Reduction Will Be Implemented We anticipate that the long-discussed reform to reduce the weekly work schedule from 48 to 40 hours will move forward and receive political approval, with gradual implementation beginning in 2026. This will trigger widespread renegotiation of collective bargaining agreements, restructuring of shifts and rest periods, and increased labor inspections focused on overtime, scheduling, and flexibility models. Renegotiation of the USMCA/T-MEC The United States-Mexico-Canada Agreement (USMCA), known as “T-MEC” in Mexico, has played a key role in Mexico’s labor reform by including strong labor provisions and compliance obligations since 2020. As the joint review of the USMCA approaches, we expect labor issues to be central to the renegotiation. This may include expanding the scope of the Rapid Response Labor Mechanism to additional sectors, tightening procedural timelines, and increased political pressure for more reciprocal application among member countries. Mexico is likely to push for reforms that balance participation among member countries. Continued Pressure to Raise Compensation Significant annual increases to the minimum wage will likely continue, impacting internal pay structures and collective bargaining negotiations. Many businesses will look to redesign compensation frameworks – including fixed salary, variable pay, and non-salary benefits – to remain competitive while managing payroll costs and meeting increasingly complex compliance obligations. The Next Regulatory Wave is Coming We expect the government to advance and strengthen regulation in three areas: telework, digital platform workers, and enhanced data-driven enforcement. Employers in Mexico should review current policies and prepare to align with upcoming regulatory changes.
Judicial Elections Reshaped Country The largest judicial change in Mexican history took hold in June with the popular election of all federal judges, including Supreme Court justices. In 2025, we saw the election of nine new Supreme Court justices, who started in September, and half of all other judicial positions. The remaining positions will be contested in 2027. Mexico Joined Trend to Protect Digital Platform Workers Mexico made substantial changes to the Federal Labor Law aimed at protecting digital platform workers and ensuring fair and adequate labor conditions. Enforcement began in June, with steep penalties for noncompliance. Businesses that utilize digital platform work should ensure compliance with the new standards related to pay and benefits, access to social security, protective measures, and participation in company profits. New Data Protection Framework Enacted A major reform package was rolled out in Mexico in the spring, which introduced new regulations on personal data protection and transparency. Public and private entities alike should be aware of their new obligations, which we discussed here, and prepare for the operational changes they may require.
Germán de la Garza De Vecchi México Regional Managing Partner
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