From 40 Hours to Forced Labour: Mexico’s Next USMCA Compliance Challenge

Authors: Jose Maria Galindo Fuguemann and Claudio Martinez Santistevan

Mexico’s reduction of working hours is taking place at a time of increasing international trade and labour pressure. As a result, working-time compliance has become one of the most relevant labour issues for employers, particularly for companies doing business with the United States or benefitting from the USMCA.

We expect increased scrutiny and labour inspections by Mexican authorities to verify compliance with employment obligations, with some of these reviews potentially focusing on practices associated with labour exploitation and forced labour. At the same time, US trade pressure will continue to play an important role in this scrutiny, particularly as discussions advance in connection with the USMCA review.

In 2024, Mexico expressly amended Article 21 of the General Law to Prevent, Punish and Eradicate Crimes Related to Human Trafficking and for the Protection and Assistance of Victims of these Crimes to include working hours exceeding the limits established by law among the circumstances associated with labour exploitation. This legislation distinguishes between labour exploitation, regulated under Article 21, and forced labour or services, regulated under Article 22, creating a specific legal framework to identify and sanction conduct that goes beyond ordinary labour non-compliance.

In addition, Mexico has amended the statutory maximum working week, reducing it from 48 to 40 hours through a gradual implementation process that will conclude in 2030, reducing by two working hours each year until 40 hours per week is reached. This amendment also establishes new limits on overtime and introduces an obligatory electronic working-time record intended to document the hours worked by each employee.

From an international trade perspective, Chapter 23 of the USMCA addresses forced or compulsory labour and requires the Parties to prohibit the importation of goods produced, in whole or in part, through forced or compulsory labour, including forced child labour.

Excessive working hours do not, on their own, constitute forced labour. However, the convergence of Mexico’s new working-time limits, its legal framework on labour exploitation, and trade obligations concerning forced labour considerably increases the compliance risk for employers.

Companies should therefore strengthen their review of general working conditions, particularly by ensuring accurate working-time records, compliance with statutory limits, proper documentation and payment of overtime, and evidence that overtime is performed voluntarily. This is the main challenge for companies whose production model requires working hours beyond the new statutory limit.

These concerns may also extend beyond a company’s own workforce. Employers should consider whether similar risks may exist among suppliers and other parties within their supply chains, particularly where operations are connected to cross-border trade under the USMCA.

Effective implementation will also require a cultural shift among employees, mainly in workplaces where overtime has been an ordinary practice.