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No dismissal at will: cause, written notice and severance in Mexico

Last verified: 2026-10-27 · Status: Stable

Abroad, many employers can end a job without a reason; in Mexico an employer can dismiss without liability only for a cause listed in the Federal Labor Law, with a written notice stating the conduct and dates. An unjustified dismissal costs three months of salary, up to twelve months of back pay if the case is lost, and in some cases twenty days per year of service, while a seniority premium of twelve days per year is owed on any dismissal. All employment is indefinite unless the contract says otherwise, probation is capped at 30 days (180 for managers), and settlements are only safe when ratified before the conciliation center or the labor court.

USD conversions use MXN 18.6638 per US dollar, the US Federal Reserve H.10 noon buying rate in New York for 23 October 2026 (FRED series DEXMXUS), the latest observation available when this page was verified. Mexican law uses the Banxico FIX rate published in the DOF for foreign currency amounts, which differs slightly. Conversions are for orientation only.

Key facts

Indemnity for unjustified dismissal, before back pay and seniority premium	3 months of salaryLFT art. 48, as of 2026-10-27 · in force
Maximum back pay after losing a dismissal case, before interest	12 monthsLFT art. 48, as of 2026-10-27 · in force
Monthly interest on fifteen months of salary after the back pay cap	2 % per monthLFT art. 48, as of 2026-10-27 · in force
Indemnity per year of service where reinstatement is refused (indefinite contracts)	20 days of salary per yearLFT arts. 49 and 50, section II, as of 2026-10-27 · in force
Seniority premium per year of service on any dismissal (daily salary capped at twice the minimum wage)	12 days of salary per yearLFT arts. 162 and 486, as of 2026-10-27 · in force
Dismissal at will	No; a listed cause and written notice are required textLFT art. 47, as of 2026-10-27 · in force
Deadline to file the dismissal notice through the labor court if not delivered in person	5 business daysLFT art. 47, as of 2026-10-27 · in force
Deadline for a dismissed worker to claim	2 monthsLFT art. 518, as of 2026-10-27 · in force
Maximum probation period (180 days for managers and specialized professionals)	30 daysLFT art. 39-A, as of 2026-10-27 · in force
General minimum wage, 2026	315.04 MXN per dayCONASAMI resolution, DOF 9 December 2025, as of 2026-10-27 · in force
Minimum wage in the northern border free zone, 2026	440.87 MXN per dayCONASAMI resolution, DOF 9 December 2025, as of 2026-10-27 · in force

The rule

1. Employment is indefinite by default. A relationship may be for a specific job, a fixed term, a season or an indefinite period, and without express terms it is indefinite. A fixed term may only be agreed in the cases the law lists. In indefinite relationships, or those over 180 days, a probation period of up to 30 days may be agreed, extendable to 180 days only for managerial, administrative and specialized technical or professional roles; if the worker fails probation, the relationship ends without liability for the employer.
Cost to do it: No fee. The cost is that a worker kept after probation acquires full dismissal protection.
Example: A manufacturer hires a production supervisor on 1 March with a 30 day probation; if it decides to let the supervisor go on 25 March, it can do so without severance, but on 5 April the same decision requires a legal cause or severance. / No US dollar effect.Ley Federal del Trabajo (LFT), DOF 1 April 1970 (Chamber of Deputies consolidated text, last reform DOF 14 May 2026), Arts. 35, 37 and 39-A, 2012-11-30 official text · verified 2026-10-27 · changed: The DOF 30 November 2012 reform introduced probation and initial training contracts (art. 39-A to 39-F).

2. No at will dismissal. An employer may end the relationship without liability only for one of the causes listed in art. 47 (for example dishonesty, violence, more than three unjustified absences in 30 days, disobedience or sexual harassment). It must hand the worker a written notice that clearly states the conduct and the dates, either in person at the time of dismissal or through the competent labor court within five business days, giving the worker's last registered address. Missing that notice on its own presumes the dismissal was unjustified, and the worker's two month limitation period does not start until the worker personally receives the notice.
Cost to do it: Courts may not charge costs under Constitution art. 17, so filing the notice has no court fee; counsel is a separate professional cost.
Example: An employee is dismissed for repeated absences but receives only a verbal explanation. In a claim, the employer starts from a presumption that the dismissal was unjustified and must prove the cause. / No US dollar effect; the cost is the exposure in the next rule.Ley Federal del Trabajo (LFT), DOF 1 April 1970 (Chamber of Deputies consolidated text, last reform DOF 14 May 2026), Art. 47 (final paragraphs) and art. 518, 1970-04-01 official text · verified 2026-10-27 · changed: The DOF 1 May 2019 labor justice reform replaced the conciliation and arbitration boards with labor courts and allowed the notice to be filed with the court.

3. If the employer cannot prove the cause, the worker chooses reinstatement or an indemnity of three months of salary, plus back pay from the dismissal date of up to twelve months. If the case is still open after those twelve months, or the judgment is not complied with, interest of 2 percent a month on fifteen months of salary is added, capitalized at payment. The salary base includes the daily rate plus the proportional part of bonuses, premiums, benefits in kind and any other payment for the work.
Cost to do it: Prejudicial conciliation is mandatory before suing (LFT arts. 684-A and 684-B); courts may not charge costs under Constitution art. 17; legal fees are separate.
Example: A worker on MXN 30,000 a month wins after 20 months of litigation: indemnity MXN 90,000, back pay capped at MXN 360,000 and interest of 2 percent a month on MXN 450,000 (MXN 9,000 a month) for the 8 months after the cap, MXN 72,000, total MXN 522,000 before the seniority premium. / About USD 27,969, of which back pay and interest are about USD 23,146.Ley Federal del Trabajo (LFT), DOF 1 April 1970 (Chamber of Deputies consolidated text, last reform DOF 14 May 2026), Arts. 48, 84 and 89, 1970-04-01 official text · verified 2026-10-27 · changed: The DOF 30 November 2012 reform capped back pay at twelve months and added the 2 percent monthly interest; the DOF 1 May 2019 reform placed mandatory conciliation first.

4. In some cases the employer may refuse reinstatement by paying the art. 50 indemnity: workers with less than one year of service, workers in direct and permanent contact with the employer where the court finds normal work impossible, confidential staff, household workers, temporary workers and digital platform workers. For an indefinite relationship this indemnity is twenty days of salary per year of service plus three months of salary and back pay. For a fixed term under one year it is half the salary for the time served; over one year, six months for the first year and twenty days for each following year.
Cost to do it: The employer may deposit the indemnity with the labor court through the paraprocedural route of art. 982.
Example: A confidential employee (manager) on MXN 1,000 a day with five years: three months MXN 90,000 plus 20 days x MXN 1,000 x 5 years = MXN 100,000, total MXN 190,000 before back pay and seniority premium. / About USD 10,180.Ley Federal del Trabajo (LFT), DOF 1 April 1970 (Chamber of Deputies consolidated text, last reform DOF 14 May 2026), Arts. 49 and 50, 1970-04-01 official text · verified 2026-10-27 · changed: The DOF 24 December 2024 platform work reform restated arts. 49 and 50 and added a separate indemnity line for platform workers.

5. Every permanent worker who is dismissed, with or without cause, and every worker who resigns after at least fifteen years, receives a seniority premium of twelve days of salary per year of service. The daily salary used is capped at twice the minimum wage of the area where the work is done (2026: MXN 630.08 in the general zone and MXN 881.74 in the northern border free zone) and may not be less than the minimum wage.
Cost to do it: 2026 general minimum wage MXN 315.04 a day and border zone MXN 440.87 a day, so the cap is MXN 630.08 (USD 33.76) or MXN 881.74 (USD 47.24) a day.
Example: Five years of service in Guadalajara: 12 x MXN 630.08 x 5 = MXN 37,804.80. The same worker in Tijuana: 12 x MXN 881.74 x 5 = MXN 52,904.40. / About USD 2,026 and USD 2,835 respectively.Ley Federal del Trabajo (LFT), DOF 1 April 1970 (Chamber of Deputies consolidated text, last reform DOF 14 May 2026); CONASAMI 2026 minimum wage resolution, DOF 9 December 2025, LFT arts. 162, 485 and 486, 1970-04-01 official text · verified 2026-10-27

6. Any agreement or settlement must be in writing, describe the facts and the rights it covers, and be ratified before the conciliation center or the labor court, which approves it only if it contains no waiver of workers' rights. Waivers of earned wages, indemnities and other benefits are void whatever they are called, and a settlement signed without the authorities can be challenged before the court for any clause that waives rights.
Cost to do it: No court costs may be charged (Constitution art. 17); counsel is a separate cost.
Example: A departing employee signs a private release for MXN 50,000 when the legal minimum was MXN 127,804.80. The worker can still claim the difference before the court, because the waiver is void. / The unpaid difference is about USD 4,169.Ley Federal del Trabajo (LFT), DOF 1 April 1970 (Chamber of Deputies consolidated text, last reform DOF 14 May 2026), Art. 33, 2019-05-01 official text · verified 2026-10-27 · changed: The DOF 1 May 2019 reform moved ratification from the boards to the conciliation centers and courts.

Scenario	MXN	USD
Settled at conciliation: three months plus seniority premium	127,804.80	6,848
Reinstatement refused (confidential employee): plus 20 days per year	227,804.80	12,206
Lost in court after 12 months: three months, seniority premium and 12 months back pay	487,804.80	26,136
Lost in court after 20 months: as above plus 8 months of 2 percent interest on 15 months of salary	559,804.80	29,994

Cost of dismissing a worker on MXN 30,000 a month (MXN 1,000 a day) with five years of service, general zone. USD at MXN 18.6638 per US dollar. Sources: LFT arts. 48, 50, 162 and 486.

Worked example

A US owned plant in Querétaro dismisses a quality engineer earning MXN 30,000 a month after five years, citing poor performance, with no written notice.
Because no written notice was delivered, the dismissal is presumed unjustified (LFT art. 47). Settling at the mandatory conciliation stage costs three months of salary (MXN 90,000) plus the seniority premium of MXN 37,804.80, total MXN 127,804.80, about USD 6,848.
If the employer litigates and loses after 20 months, the bill rises to about MXN 559,804.80 (USD 29,994), because back pay and interest keep running.

Step by step

1. Write every employment contract and record its type; without express terms the relationship is indefinite (LFT art. 35).
2. Use the 30 day probation (180 days for managers and specialists) to assess new hires, and decide before it ends (art. 39-A).
3. Keep a disciplinary file: dated warnings, attendance records and minutes of the conduct that could support an art. 47 cause.
4. When dismissing for cause, deliver the written notice in person at the moment of dismissal, or file it with the labor court within five business days (art. 47).
5. When there is no provable cause, offer a settlement and ratify it before the conciliation center so it cannot be reopened (art. 33).
6. Pay the seniority premium on every dismissal of a permanent worker, using the capped salary (arts. 162 and 486).

Common traps

A missing or late written notice turns a real cause into a presumed unjustified dismissal.
Back pay of up to twelve months and then 2 percent monthly interest on fifteen months of salary make delay the most expensive option.
The indemnity salary base includes bonuses, premiums and benefits in kind, not only base pay (arts. 84 and 89).
A private release that pays less than the legal amounts is void as to the waiver, even if signed (art. 33).
The seniority premium cap is higher in the northern border free zone, where the minimum wage is MXN 440.87 a day in 2026.

Sources

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