Mexico: The Mexican Court Limits Profit Sharing Payments

On 3 April 2024, the Second Chamber of Justice, by unanimous vote, validated the constitutionality of the cap of three times the salary for the payment of the profit sharing of the companies, established in Section VIII of Article 127 of the Federal Labour Law, considering that the Congress of the Union has the authority to legislate on labour matters and issue the provisions related to profit sharing.

Likewise, it was considered that this cap is not absolute since it admits the possibility of taking into account the average of the amount paid to the category, position, level, or post of the employee during the last three years, always favoring the best option for the worker.

We are awaiting the publication of the ruling of the Supreme Court on this important issue.