Everything you need to know about the 2021 bonus and the impact of the labor reforms

The bonus is a right that all people with a subordinate job in Mexico have and is established in the Federal Labor Law (LFT) since 1970. The payment of this benefit cannot be less than 15 days of salary and must be covered before of December 20, at least for the labor force that works in the private sector.

In the case of public servants, the Federal Law of Workers in the Service of the State (LFTSE) establishes a bonus of at least 40 days of salary. The federal government can cover half of the benefit before December 15 and the other part before January 15.

Mexico is one of the few countries in the world that has regulated this year-end bonus in its regulations and, although workers must complete at least one year of service to receive the full bonus payment, people who have only worked a few months in a company are entitled to receive a proportional part.

“The bonus payment corresponds to base, trust, plant, unionized workers, for work or for a specific time, season, for an indefinite time subject to trial or subject to initial training, temporary, commission agents, trade agents , insurance, sellers, among others that are governed by the Federal Labor Law”, indicates the Federal Attorney for the Defense of Labor (Profedet).

In this sense, Profedet reiterates that the legal framework establishes the employer's obligation to cover the Christmas bonus in a timely manner.

The bonus is a benefit that is generated from the days worked. The traditional scenarios for their payment are two: workers with a full year of service and people who have not completed 12 months of work in a work center. In the first case, the employee is entitled to receive an amount equivalent to a fortnight, at least. But for those who are in the second assumption, the best calculation method is this:

For example, considering that a person receives a monthly salary of 12,587 pesos (average professional salary), if he has one year of service in the company, his bonus will be 6,293 pesos. But if he only has four months of service, in that case his bonus will be approximately 2,061 pesos.

Scenarios with outsourcing reform

The subcontracting reform and the new rules for the provision of specialized services led companies to make changes to their internal structures to comply with legal provisions. These movements pose at least four possible scenarios for the payment of bonuses for workers who were transferred from an outsourcing scheme to an operating company.

» Scenario 1. Employer substitution

According to the Mexican Institute of Social Security (IMSS), 2.9 million workers left a subcontracting scheme and were recognized by their real employers through the employer substitution mechanism. In this scenario, people will not have any change in the bonus payment, but it will be the substitute employer who must cover the benefit.

Luis Rosas, counsel of the labor practice of Hogan Lovells Mexico, emphasizes that employer substitution does not alter working conditions and does not affect the seniority of workers.

“The employer substitution, as its name indicates, is only the substitution of the employer. But since the employment relationship does not change for the employees, their rights are not violated. So, if there was an employer substitution, what happens is that the substitute employer is the one who will have the obligation to pay the bonus to the worker, because in an employer substitution there is no settlement payment or benefit, because the employment relationship remains the same. ", Explain.

In this sense, the specialist points out that workers who changed employers through this figure have the right to receive the same amount of Christmas bonus that they received with the replaced employer. This means that if in the individual or collective contract the benefit was greater than the minimum 15 days provided by the LFT, the amount cannot be altered by the substitute employer.

“In employer substitution, one of the obligations of the substitute employer is to respect the conditions that the employee had agreed with the replaced employer. That is to say, no condition can vary because it is the same employment relationship and this obviously must be foreseen because many companies grant a bonus of more than 15 days, then, that bonus in substitution of the employer will have to be paid with the same number of days " , explains Luis Rosas.

» Scenario 2. Workers terminated and rehired

Although there is no specific figure, some organizations chose to liquidate the workers to hire them again with another company name or company that did comply with the new rules established by the reform. In these cases, when there was a liquidation involved, the bonus payment is proportional.

“For example, if a person was liquidated or saw their past employment relationship compensated and started again from scratch, then the bonus will be proportional to the date on which the contract was presented and until the month of December. The bonus is a benefit that is generated over time and if you were paid in September and rehired the day after termination, you started a new employment relationship, with a new company and new benefits”, explains Carlos Ferran, managing partner of the firm Ferran Martínez Lawyers.

This is so, adds the specialist, because the amount that a worker received as settlement includes the proportional part of the bonus generated in the company with which the employment relationship ended.

However, whether the companies have carried out an employer substitution or liquidated the workers to hire them again, in both cases there is no reason not to cover the benefit.

"Regardless of the changes, the Christmas bonus is a constitutional right and embodied in the regulatory law and, obviously, when we talk about an employment relationship, the right to the Christmas bonus is inalienable," says Carlos Ferran.

» Scenario 3. Settled without a new contract

This situation is similar to that experienced by workers who lose their jobs before December. Those who have been liquidated due to internal changes to comply with the subcontracting reform and were not hired again, received their proportional part of the bonus with their severance pay.

During a Worky webinar, Mario Gómez, a tax specialist, indicated that a scenario that was also left by the legal changes to the outsourcing scheme is that of people who lost their employment relationship completely, in which cases the benefit had to be covered with his severance pay and proportional to the days he worked in the organization.

» Scenario 4. Salary increase

Salary increases are not an action that is limited to the subcontracting reform, but it is part of the cases that must be considered for the payment of bonuses. Luis Rosas believes that workers who had a salary increase when transferred to the other company should receive the benefit based on this adjustment.

“The bonus must be paid according to the last salary that the worker earns. If the employee was lucky enough to have a salary increase in October, for example, because he was promoted, his salary was increased or for whatever reason he had a salary increase before the date of payment of the bonus, he would have right to have the benefit covered with this last salary”, points out the Hogan Lovells specialist.

Despite the fact that in these cases the legal framework lends itself to various interpretations, Carlos Ferran agrees that one way in which it can be calculated is by considering the last salary, but there are also arguments for the bonus to be determined based on the two Salaries that the person has had during the year.

Exempt from Christmas bonus and penalties

Companies are only obliged to cover the Christmas bonus of people with whom there is an employment relationship. That is, people in a fee scheme or provision of professional services —as long as they are real in practice— do not have the right to receive the bonus.

The Federal Labor Law contemplates sanctions for companies that do not comply with the payment of bonuses in a timely manner, this fine can be between 4,481 and 448,100 pesos. As of December 20, workers have one year to claim this benefit if they have not received it.

The Profedet is one of the instances to claim the Christmas bonus when the employer did not cover the benefit and the workers can contact (800) 911-7877, extensions 44740 and 44741 to obtain guidance. In addition, the institution enabled the line (55) 1484-8737 to receive questions through WhatsApp messages.

“According to current legislation, all workers have the right to receive before December 20 of each year an amount of money equivalent to at least 15 days of salary, which is called a bonus. Likewise, it indicates that those who have not completed the year of service, regardless of whether they are working or not on the date of liquidation of the bonus, must receive the proportional part, "emphasizes the Profedet.