Indefinite Employment Contract Mexico (Contrato por Tiempo Indeterminado)

An Indefinite Employment Contract Mexico (Contrato de Trabajo por Tiempo Indeterminado) is a formal written agreement between a patron (employer) and a trabajador (worker) in Mexico establishing a permanent employment relationship with no predetermined termination date, governed principally by the Ley Federal del Trabajo (LFT) published in the Diario Oficial de la Federación on 1 April 1970 and substantially reformed in May 2019. Article 35 of the LFT establishes that employment relationships are presumed to be for an indefinite term unless the nature of the work justifies a fixed-term, specific-work, or seasonal arrangement under Articles 36 through 39 — making the Contrato por Tiempo Indeterminado the default and legally preferred form of employment in Mexico.

The constitutional foundation for employment law in Mexico rests in Article 123 of the Constitución Política de los Estados Unidos Mexicanos of 5 February 1917. Article 123, Apartado A governs private-sector employment and mandates a range of minimum benefits that no contract may waive or reduce: a maximum eight-hour workday (jornada diurna) under Article 61 LFT, a minimum six-day annual vacation period increasing with seniority under Article 76 LFT (raised to twelve days minimum by the 2022 reforma), a 25% vacation premium (prima vacacional) under Article 80 LFT, an annual Christmas bonus (aguinaldo) of at least fifteen days' salary under Article 87 LFT, and profit-sharing (Participación de los Trabajadores en las Utilidades — PTU) of 10% of annual taxable profits under Articles 117 through 131 LFT.

All employers in Mexico must register their workers with the Instituto Mexicano del Seguro Social (IMSS) before the commencement of work under Article 15 of the Ley del Seguro Social (LSS) published in the DOF on 21 December 1995. IMSS provides healthcare (enfermedad y maternidad), occupational risk insurance (riesgos de trabajo), disability and life insurance (invalidez y vida), retirement and old-age pension (retiro, cesantía en edad avanzada y vejez — RCV), and childcare services (guarderías). Employer IMSS contributions are calculated on the Salario Diario Integrado (SDI) — which includes base salary plus proportional values of all recurring benefits — and remitted bimonthly through the Sistema Único de Autodeterminación (SUA).

Employers must simultaneously register workers with the Instituto del Fondo Nacional de la Vivienda para los Trabajadores (INFONAVIT) under the Ley del INFONAVIT Article 29, contributing 5% of the SDI to each worker's individual housing subaccount (subcuenta de vivienda) in the Sistema de Ahorro para el Retiro (SAR/AFORE). Workers may access INFONAVIT credits (créditos INFONAVIT) to purchase, build, or renovate housing when they accumulate sufficient points based on salary, age, and contribution history. The Comisión Nacional del Sistema de Ahorro para el Retiro (CONSAR) oversees the AFORE system managing retirement savings.

For payroll tax purposes, the employer must withhold Impuesto sobre la Renta (ISR) from employee wages under Article 94 of the Ley del Impuesto sobre la Renta (LISR) published in the DOF on 11 December 2013, and remit withholdings monthly to the Servicio de Administración Tributaria (SAT) via the portal del contribuyente using the worker's Registro Federal de Contribuyentes (RFC). Workers without RFC must obtain one from the SAT — the RFC is the primary fiscal identifier for all tax obligations in Mexico. The CURP (Clave Única de Registro de Población) serves as the national identity code for all residents and is required for IMSS and INFONAVIT registration. Workers also have an NSS (Número de Seguridad Social) assigned by IMSS upon first registration.

The 2019 labour reform (Decreto de reforma laboral publicado en el DOF el 1 de mayo de 2019) transformed Mexico's labour dispute resolution system by replacing the Juntas de Conciliación y Arbitraje with federal Tribunales Laborales (labour courts) under the Poder Judicial and creating the Centro Federal de Conciliación y Registro Laboral (CFCRL) to handle pre-litigation mandatory conciliation. All labour disputes must now pass through mandatory conciliation at the CFCRL or equivalent state centres before proceeding to litigation under the reformed Articles 684-A through 684-E LFT — a structural change that significantly accelerated dispute resolution timelines.

The Contrato por Tiempo Indeterminado also operates within the framework of Normas Oficiales Mexicanas (NOMs) issued by the Secretaría del Trabajo y Previsión Social (STPS), including NOM-035-STPS-2018 (psychosocial risk prevention), NOM-030-STPS-2009 (occupational safety programs), and NOM-002-STPS-2010 (emergency action plans) — all of which impose compliance obligations on employers regardless of the terms of individual employment contracts.

An Indefinite Employment Contract Mexico is required whenever a Mexican employer engages a worker in an ongoing employment relationship that forms part of the company's regular, permanent activity. Article 35 of the Ley Federal del Trabajo establishes the legal presumption of indefinite employment — any employer who cannot demonstrate a specific legal justification for a fixed-term, specific-work, or seasonal arrangement under Articles 36 through 39 LFT must treat the relationship as indefinite by operation of law.

A Contrato por Tiempo Indeterminado is needed when a Mexican legal entity — a Sociedad Anónima de Capital Variable (SA de CV), Sociedad de Responsabilidad Limitada (S de RL), or a persona física con actividad empresarial registered with the SAT — hires workers for positions that are not tied to a specific project with a defined completion date or to seasonal demand fluctuations. Under the LFT, any employer who attempts to disguise an indefinite employment relationship through a series of fixed-term contracts risks having those contracts reclassified as indefinite by the Tribunales Laborales, triggering retroactive entitlement to all accumulated benefits.

The contract is required when a worker transitions from an initial training period (contrato de capacitación inicial under Article 39-B LFT, maximum three months) or a trial period (contrato de período de prueba under Article 39-A LFT, maximum thirty to 180 days depending on skill level) to permanent employment — at the conclusion of these trial arrangements, the employer must issue a Contrato por Tiempo Indeterminado if the worker is retained.

A Contrato de Trabajo Indeterminado is also needed when a foreign national receives work authorization (permiso de trabajo) through the Instituto Nacional de Migración (INM) under the Ley de Migración — the employment contract serves as the primary supporting document for the immigration application and for subsequent renewals of the Tarjeta de Residencia Temporal con permiso para trabajar.

The document is required for all IMSS and INFONAVIT registration purposes: under Article 15 of the Ley del Seguro Social, the employer must file an Alta Patronal (employer registration form) and Alta del Trabajador (worker registration) before the first day of work, and the written employment contract specifying the agreed Salario Diario Integrado is the foundational document for calculating IMSS bimonthly quotas (cuotas obrero-patronales) and INFONAVIT contributions.

Under the Ley Federal del Trabajo art. 35, the Ley del Seguro Social art. 15, and the Ley del INFONAVIT art. 29, Mexican employment contracts must be documented in writing and signed by both parties. The STPS (Secretaría del Trabajo y Previsión Social) may inspect employers and demand production of employment contracts — employers who cannot produce written contracts face presumption that the worker's version of agreed conditions prevails under Article 784 LFT.

A valid Indefinite Employment Contract Mexico under the Ley Federal del Trabajo must contain the following essential elements specified in Articles 24 and 25 LFT to be enforceable and to meet IMSS and SAT registration requirements.

Identification of Parties: Full legal name, RFC (Registro Federal de Contribuyentes assigned by the SAT), CURP (Clave Única de Registro de Población), official identity document number (INE/IFE credential, passport, or foreign resident card), and domicile of both the employer (patrón) and employee (trabajador). Where the employer is a legal entity (persona moral), the company's RFC, Registro Público de Comercio inscription number, and name and identification of the legal representative (representante legal) signing with power of attorney (poder notarial) must be included. All corporate powers of attorney must be granted before a Notario Público under the Código Civil Federal.

Job Position and Function: The specific job title (puesto) and a precise description of the functions and duties (descripción de actividades) to be performed. Article 25 Section IV LFT requires that the service to be provided be stated with precision — vague job descriptions have been used by courts to expand the employer's obligations and should be avoided.

Work Location: The address of the primary workplace (lugar o lugares de prestación del servicio) under Article 25 Section V LFT. Where the nature of the work requires the employee to work at multiple locations, all relevant locations or the criteria for determining them must be stated. Remote work arrangements (teletrabajo) must comply with Articles 330-A through 330-K LFT (added by the 2021 teletrabajo reform) and require a separate complementary agreement specifying equipment provision, expense reimbursement, connectivity support, and the right to disconnect (derecho a la desconexión).

Duration and Start Date: Explicit statement that the contract is for an indefinite term (por tiempo indeterminado) under Article 35 LFT and the commencement date. If a trial period (período de prueba) or initial training period (capacitación inicial) precedes the indefinite employment, the terms, duration, and evaluation criteria must be specified in accordance with Articles 39-A and 39-B LFT.

Salary and Integrated Daily Wage: The agreed base salary (salario base) and the Salario Diario Integrado (SDI) calculated under Article 84 LFT — which integrates base daily wage plus the proportional daily value of the aguinaldo (15 days minimum under Article 87 LFT), prima vacacional (25% of vacation days under Article 80 LFT), and any other recurring benefits. The SDI is the basis for calculating IMSS quotas. The salary must meet or exceed the Salario Mínimo General (SMG) established annually by the Comisión Nacional de los Salarios Mínimos (CONASAMI) — for 2025, the general minimum wage is $278.80 MXN per day (general zone) and $419.88 MXN per day in the northern border free zone (Zona Libre de la Frontera Norte — ZLFN).

Work Hours and Schedule: The daily working hours and schedule under Article 25 Section VII LFT. The LFT establishes three types of workday: diurna (daytime, between 06:00 and 20:00, maximum 8 hours under Article 61), nocturna (nighttime, between 20:00 and 06:00, maximum 7 hours), and mixta (mixed, spanning both periods, maximum 7.5 hours). Weekly rest (descanso semanal) of at least one full day is mandatory under Article 69 LFT.

Mandatory Benefits: Explicit reference to all legally mandated benefits — aguinaldo (Article 87 LFT), vacaciones and prima vacacional (Articles 76–80 LFT), PTU (Articles 117–131 LFT), IMSS coverage (Ley del Seguro Social), and INFONAVIT contributions (Ley del INFONAVIT Article 29). Superior benefits (prestaciones superiores a la ley) granted by the employer should also be documented here to prevent future disputes about their nature and value.

Data Protection Clause: A notice (aviso de privacidad simplificado) under Article 15 of the Ley Federal de Protección de Datos Personales en Posesión de los Particulares (LFPDPPP, published in the DOF on 5 July 2010), informing the employee of the processing of their personal data for HR, payroll, IMSS, INFONAVIT, and SAT compliance purposes, the data categories collected, retention periods, and the employee's ARCO rights (access, rectification, cancellation, and objection) exercisable through the Instituto Nacional de Transparencia, Acceso a la Información y Protección de Datos Personales (INAI).

Governing Law and Jurisdiction: Explicit statement that the contract is governed by the Ley Federal del Trabajo and, for any disputes, that mandatory pre-litigation conciliation at the Centro Federal de Conciliación y Registro Laboral (CFCRL) or the corresponding state conciliation centre applies before proceeding to the competent Tribunal Laboral under the reforms introduced by the Decreto of 1 May 2019.

Forms-legal.com provides this Indefinite Employment Contract Mexico template as a practical starting point for documenting the employment relationship. Every employment contract should be reviewed by a licensed Licenciado en Derecho or abogado laboralista to confirm compliance with applicable NOMs, state laws, sector collective bargaining agreements (contratos colectivos de trabajo), and the specific circumstances of the relationship. The STPS, IMSS, and SAT each have independent audit and inspection powers that require employer documentation to be complete and current.