Mexico's 40-Hour Reform: What Actually Changes for Payroll in 2026 and Beyond

Mexico just cut the maximum work week from 48 hours to 40, and it did so at the constitutional level, which means this is not a policy a future administration walks back with a memo. If you run payroll for clients in Mexico, this is the most consequential change you will touch this decade, and the parts that will actually bite are not the ones getting the headlines.

The flagship number gets the attention, but the operational clauses in the transitory articles are where staying compliant actually gets hard. Let me cover both: why it matters, then what changes.

The big picture: two laws, not one

People talk about "the 40-hour reform" as a single event. It is two, and getting them straight matters, because they carry different dates and different obligations.

The first is the constitutional amendment, published in the Diario Oficial de la Federación on March 3, 2026 and in force that same day. It amended Article 123, Apartado A, fracciones IV and XI. Fracción IV sets the 40-hour week and preserves the rule that workers get at least one paid rest day for every six worked. Fracción XI resets the overtime framework. The constitution does the headline work; it does not do the detail.

The second is the secondary legislation, the reform to the Ley Federal del Trabajo (the LFT), published on May 1, 2026 and in force that day. The constitution had given Congress 90 days to reform the LFT, and Congress used them. This is the law that spells out the operational detail, because it amended the specific articles that govern hours, overtime, timekeeping, and penalties: Articles 58, 59, 61, 66, 67, 68, 69, 71, 132, and 994. It is the one to read closely.

The number everyone knows, phased the way most people miss

The week drops from 48 hours to 40. What gets lost is that it does not drop on any single day. It steps down two hours a year:

• 2026: 48 hours (no change yet)
• 2027: 46 hours
• 2028: 44 hours
• 2029: 42 hours
• 2030: 40 hours

Each cut takes effect on January 1 of that year. So the line between ordinary hours and overtime moves every January for four years running. Miss one of those changes, or apply it a year early, and hours get misclassified in both directions: ordinary time paid as overtime, or overtime underpaid as ordinary. Both cost money, and both are easy to miss if the threshold lives in a spreadsheet formula or a provider that is slow to push the update.

One thing that did not change: the daily shift maximums. Eight hours for a day shift, seven for a night shift, seven and a half for a mixed shift. The reform shortened the week, not the day.

The clause that costs the most: wages cannot go down

Here is the provision I would put in bold for any finance leader. Both the constitution (Transitorio Cuarto) and the LFT reform (Transitorio Séptimo) say the same thing: reducing the work week may in no case reduce wages, salaries, or benefits.

Read that slowly. Hours fall; pay does not. Which means the effective hourly rate rises every year, and the overtime base rises with it.

Walk it through with round numbers. Say a worker earns 10,000 pesos a month for a 48-hour week. In 2027 the maximum week is 46 hours, but that worker still earns 10,000 pesos. In 2030 the week is 40 hours, and the worker still earns 10,000 pesos for it. Same monthly pay, fewer hours, so the effective hourly rate has climbed by roughly 20 percent over the transition. This is not a rounding detail: overtime, the Sunday premium, and anything else derived from an hourly rate all inflate off that rising base. Any calculation that scales pay down as hours fall is now illegal in Mexico. Compensation freezes, and the implied hourly rate floats up on its own.

Overtime is now a two-tier system

The old overtime rule was simpler and, in practice, widely abused. The reform splits it into two tiers, priced differently.

Tier one (Article 66): up to 12 hours of overtime per week, distributed as no more than 4 hours a day across no more than 4 days. Paid at a 100 percent premium, meaning double the ordinary hourly rate.

Tier two (Article 68): overtime beyond tier one, capped at 4 additional hours per week. Paid at a 200 percent premium, meaning triple the ordinary rate.

Underneath both is a hard ceiling: total hours in a single day, ordinary plus overtime combined, may not exceed 12. Article 67's old second paragraph was repealed to make that clean.

Two subtleties will catch anyone who skims. First, the 12-hour tier-one cap is the 2030 figure. The LFT phases the overtime cap in alongside the week: 9 hours per week through 2026 and 2027, 10 in 2028, 11 in 2029, and 12 from 2030. So the ordinary threshold and the overtime cap both move on the same January cadence, just on different curves. Second, minors under 18 are barred from any overtime at all. Getting the tiering right is the difference between a clean pay run and a back-payment, and it is exactly the kind of two-variable calculation that quietly breaks when it lives in a manual worksheet.

The sleeper obligation: electronic time tracking

This is the clause I expect to generate the most penalties, because it is genuinely new. Article 132, fracción XXXIV now requires employers to keep electronic records of each worker's shift, including start and end times, and to hand those records to the authorities on request. The STPS (the labor ministry) will issue the detailed rules, and both the obligation and those rules take effect January 1, 2027.

Why it matters beyond the admin: the electronic record counts as prueba plena, full proof, where it is shown to have been agreed between worker and employer. In a country where overtime disputes have long turned on who can prove the hours, a clean electronic record is the strongest evidence there is. A missing one is a liability.

And it has teeth. A new penalty, Article 994 fracción IV Bis, sets fines of 250 to 5,000 UMA for failing to keep these records. At the 2026 UMA value of 117.31 pesos a day, that is roughly 29,328 pesos at the low end and about 586,550 pesos at the high end. Real money for what is, at bottom, a record-keeping gap.

The takeaway

Mexico did not just lower a number. It made the maximum work week a moving target, protected wages on the way down, split overtime into two priced tiers, and attached a fined, evidentiary timekeeping duty on top. If you run payroll for clients in Mexico, all of it lands on you, and it lands on a schedule that keeps moving through 2030.

That is the real challenge here: not any single calculation, but staying correct as four consecutive January thresholds shift while wages stay pinned in place. It is a lot to track by hand in spreadsheets, and it is only as current as a legacy provider is quick to update. When the hours, the overtime tiers, or the records are wrong, it surfaces as an employee dispute, and in Mexico the electronic record is now full legal proof. Get it right and your clients stay compliant without having to think about it, which is the whole reason they hand you their payroll.

Flux keeps this current for you. We track each of these reforms and their phased implementation dates, all the way out to 2030, and keep the thresholds, overtime tiers, and compliance rules up to date for every jurisdiction we cover, so a reform like this is an update on our side rather than a scramble on yours.