Glossary · 2 min read
What is the Federal Labor Law (LFT)
Short answer
The Federal Labor Law regulates the relationships between companies and workers in Mexico: working hours, wages, rest, benefits and termination.
Who it applies to
Employment relationships under section A of Article 123 of the Constitution, which is mostly the private sector.
What changed in 2026
A maximum workweek of 40 hours phased in gradually, new overtime rules and the electronic working-time record. Read the full guide.
Why everything starts with the working-time record
Almost every labor calculation starts from the same data point: how many hours and which days each person worked. If that data is uncertain, so is everything else.
- Overtime: it is paid according to the hours of each week.
- Sunday premium and rest days worked: they depend on which days were worked.
- Aguinaldo and profit sharing: they use the days worked in the year.
- Labor lawsuits: the company must prove the working time.
Since 2026, the Federal Labor Law requires that record to be electronic, per person, with start and end time.
Common mistakes
- Using the UMA or minimum wage value from a previous year.
- Confusing daily salary, integrated salary and contribution base salary.
- Calculating benefits without knowing the days actually worked.
- Taking the legal minimums as if they were the maximum.
- Not keeping the backup of the calculation.
What to do now
- Confirm the current value for the year.
- Have each person's daily salary at hand.
- Check the days and hours worked in your record.
- Do the math and keep it.
- Validate it with your accountant.
Related terms
What is RESICO. RESICO is the Simplified Trust Regime (Régimen Simplificado de Confianza), a tax regime with reduced income tax rates for individuals and companies with income below certain limits.
Sunday premium: what it is and how it is calculated. The Sunday premium is an additional payment of at least 25% on the salary of an ordinary day for anyone who works on Sunday.
What the STPS is and what it does. The STPS is the Ministry of Labor and Social Welfare.
Frequently asked questions
Who enforces compliance?
The Ministry of Labor and Social Welfare, through its inspections.
Where does the data come from?
From the Federal Labor Law and from the official values published by INEGI and the National Minimum Wage Commission.
Do these values change every year?
Yes. The UMA is updated every February 1 and the minimum wage every January 1. Always confirm the current value.
Are the amounts gross or net?
Gross. They do not account for taxes or social security contributions.
Can I use this for my payroll?
It works as a reference. Your accountant should do or validate the payroll calculation.
Legal basis and sources
- Decree amending the Federal Labor Law on the reduction of the working week. Official Gazette of the Federation, May 1, 2026.
- Federal Labor Law, current text. Chamber of Deputies.
How we write this content. The Sicheca team writes it from the official text of the law. When something is not yet defined by the authority, we say so. It is general information and does not replace the advice of a lawyer or an accountant.