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An employer of record (EOR) hires international professionals on behalf of other companies, offering a quick way to compliantly enter a foreign market without needing a local entity. So working with an employer of record in Mexico can be an attractive option to anyone seeking to hire top talent in Latin America’s second-largest economy.
When you hire staff through an employer of record in Mexico, you can have local team members reporting in little more than the time it takes to find them with the EOR having an established recruitment network to help quickly identify strong candidates.
It is worth noting that some providers may not refer to themselves as an employer of record in Mexico, but as international professional employer organization (PEO), despite the fact that many providers will differentiate between the two services.
The Mexican market is known for being a big draw for Canadian and US companies, with the 1,954-mile (3,145 km) land border between the United States and Mexico providing easy access between the two countries.
As a result, a large manufacturing belt has built up on the Mexican side of the border, with significant tax breaks offered to companies that set up there.
For investors, Mexico presents a wide range of possibilities, thanks to its status as a major agricultural producer, the presence of a well-established industrial sector, and the country’s growing pool of skilled talent – with Guadalajara, Mexico City, and Monterrey the biggest hubs for startups and technology in the country.
Mexico’s massive internal market – being the second-largest economy in Latin America and third-largest in North America, means that investors need not only consider the country’s investment from the perspective of exporting goods out.
If you are interested in hiring professionals via an employer of record in Mexico, contact us today.
What does an employer of record in Mexico do?
An employer of record in Mexico helps companies to find, hire, and administer local team members. Those team members, meanwhile, will report directly to the client-company as if they were direct hires.
The employer of record in Mexico will oversee the management of the payroll of those professionals, including overseeing the likes of benefits, statutory leave, and unemployment claims.
In return for these services, an employer of record in Mexico will charge a fee – usually a monthly per-employee fee – which will often total much less than the costs involved in establishing and running an entity in the country.
Hiring via an employer of record in Mexico allows the hiring company to quickly have local professionals in place – usually a matter of just weeks – without needing to worry about being compliant with unfamiliar regulations.
If the hiring company already has people in mind for the roles that need to filled, the process can be extremely fast. If, on the other hand, the hiring company needs the employer of record in Mexico to help identify and hire suitable candidates, it will take longer, depending on the role being filled.
An employer of record in Mexico will be able to give a general estimate on how long a particular job role is likely to take to fill, as well as other countries to consider hiring them, if you are not committed to hiring in Mexico.
Regardless of whether you are willing to consider other markets at first, should you be planning to expand into other markets later, working with an employer of record in Mexico that also operates in other markets is a wise choice, as they will be able to support your later expansion.
Regulations an employer of record in Mexico will oversee
Among the employment regulations an employer of record in Mexico will take care of are the following:
Hours: The maximum working week in Mexico is 48 hours long for day jobs – meaning those undertaken between 6 am and 8 pm – comprised of eight-hour days and six-day weeks. For nighttime jobs, those maximums are reduced to seven hours per day, for a 42-hours per week. Jobs with both daytime and nighttime hours have a daily limit of 7.5 hours and a weekly limit of 45 hours.
Breaks: An employer of record in Mexico will guarantee that anyone working a full day gets at least the 30-minute break they are entitled to, which is considered part of their working day.
Leave: As of 2023, under Mexican law, all employees are entitled to 12 days of paid leave per year once they have completed one year of continuous service with an employer. That allowance is then extended by an additional two days per additional year of service.
Rest: All employees are due one day of rest for every six days worked, with that rest day falling on Sunday wherever possible. An employer of record in Mexico will oversee the implementaiton of this.
Overtime: An employer of record in Mexico will make sure that overtime is logged and paid correctly, meaning that the first nine hours of overtime per week are paid at double the normal hourly rate, while subsequent hours are paid at triple.
Wages: There are two minimum wages in Mexico, with the northern border region where many factories are based having a higher minimum, which an employer of record in Mexico will guarantee is paid, in the event of a project that involves minimum wage employees.
Alternatives to hiring via an employer of record in Mexico
The number one alternative to hiring professionals via an employer of record in Mexico is to set up a local company and hire people directly. Another option is to hire them as international independent contractors.
In both cases, an employer of record in Mexico could be of use to you. Because in the event that you plan to hire people directly, and EOR may still be able to help with finding good candidates, and will often offer recruitment as a standalone service.
That will mean you can still tap into the EOR’s established recruitment network and strong understanding of the local job market.
For hiring international independent contractors, meanwhile, in many cases an employer of record in Mexico will also facilitate such an arrangement, so could still support you.
So if you are unsure if EOR or contracting would suit you best, ask an employer of record in Mexico if they can support both types of arrangement and provide feedback on which is most suited to your needs.
How to hire via an employer of record in Mexico
To hire professionals via an employer of record in Mexico, you will need to follow these six steps:
1) Establish employee profile
The first step in hiring via an employer of record in Mexico is to establish the profile of the person or people you need. As part of this, your chosen EOR will want to gather as much information as possible about the essential and desireable requirements associated with the roles they are filling.
2) Complete preliminary screening
Once applications begin coming in, your employer of record in Mexico will undertake a preliminary screening in order to eliminate any candidates that clearly do not meet the requirements you have presented them them with.
3) Undertake initial interviews
Your employer of record in Mexico will then undertake initial interviews, probing candidates in order to verify that the experience and qualifications they have were accurately reflected in the resume they submitted and meet the requirements of the role.
4) Stage in-depth interviews
Once candidates have gone through an initial interview with your employer of record in Mexico, if selected, they can now be called for a more in-depth interview with someone from the hiring company. This will provide the opportunity to dig into their technical knowledge and experience to a deeper degree than an EOR would be able.
5) Send job offer
Once a candidate has undertaken an in-depth interview and proven themselves to be a good fit for the role available, a job offer can be sent to them. An employer of record in Mexico will generally have versions of important documents related recruitment — such as offer letters — on hand and ready to be modified and sent.
6) Onboard team members
Once a job offer has been accepted, your employer of record in Mexico will be able to start the onboarding process, which will involve them signing their contract, learning about their rights and responsibilities, and understanding more about the company and what it does. Again, your EOR will have many of the documents, including easily adapted contracts, on hand.
Serviap Global is an employer of record in Mexico
At Serviap Global, we are an employer of record in Mexico, offering international PEO / EOR services to companies seeking to quickly hire professionals in the country.
We also offer global talent acquisition services to support companies with recruitment direct hires, as well as assisting companies with hiring contractors.
We started out in Mexico in 2010, before expanding throughout Latin America and then arround the world, so that today we able to assist companies in over 100 countries globally.
You can also read more about us.