Inside Mexico’s Most Contested Labor Reform

Mexico’s proposed constitutional reform to reduce the workweek from 48 to 40 hours by 2030 has triggered debate over whether it represents a structural labor shift or a limited adjustment constrained by overtime flexibility and implementation costs. While the government emphasizes capped overtime, no salary reductions, and gradual rollout, business groups and analysts warn of cost pressures on SMEs, potential impacts on hiring, and informality, and competitiveness risks for labor-intensive sectors. The outcome will shape Mexico’s regulatory environment, productivity model, and investment climate through the end of the decade.

Mexico is advancing a constitutional reform to reduce the legal workweek from 48 to 40 hours by 2030, positioning the country alongside regional peers such as Ecuador and Chile. The proposal, currently under congressional review, represents one of the most significant labor policy shifts in decades.

Led by the Ministry of Labor (STPS), the initiative establishes a phased transition designed to balance expanded worker protections with business adaptability across manufacturing, services, agriculture, and logistics. The reform would amend Article 123 of the Constitution to set a 40-hour weekly ceiling while maintaining the eight-hour daily limit.

Marath Bolaños, Minister of Labor, frames the reform as a structural adjustment intended to “return time to workers” without imposing rigid scheduling mandates that could disrupt production. 

Gradual Transition Through 2030

According to the legislative calendar, the reform would enter into force in 2026, initiating a staged transition:

• 46 hours in 2027
   

• 44 hours in 2028
   

• 42 hours in 2029
   

• 40 hours in 2030
   

Lawmakers estimate that about 13.5 million workers would directly benefit once the reform is fully implemented. The STPS further states that more than 64% of workers now labor more than 41 hours per week, making them potential beneficiaries of the reform.

Ignacio Mier, President, Senate’s Joint Coordination Committee, says that the initiative is the result of broad consultations with unions, employers, academics, and technical experts. Business groups under the Business Coordinating Council (CCE) have expressed support for the gradual implementation model, emphasizing that the multi-year adjustment window reduces the risk of abrupt cost shocks.

No Salary Reduction, Overtime Cap Introduced

In Bulletin 15/2026, the STPS directly addressed concerns that the reform could result in workers “working more and earning less.” The ministry says that the constitutional text explicitly prohibits salary reductions as a consequence of the shorter workweek. Compensation levels must remain unchanged despite the reduction in hours.

The reform also restructures overtime rules. Under the current framework, employers may require up to 48 regular hours per week, followed by nine double-paid overtime hours and unlimited triple-paid hours, a structure that has allowed weekly workloads in some sectors to reach 80 or 90 hours.

The proposed reform replaces this model with defined caps:

• Up to 12 overtime hours paid at double rate
   

• Up to four overtime hours paid at triple rate
   

• Absolute maximum of 56 total weekly hours
   

• Overtime counted starting from hour 41, not hour 49
   

Additionally, minors would be explicitly prohibited from performing overtime work. The ministry argues that this shift moves Mexico from an effectively open-ended overtime regime to one with enforceable limits, strengthening labor protection.

Under ordinary conditions, maintaining the eight-hour daily limit would result in a five-day workweek in many sectors. However, the constitutional language avoids mandating a universal two-day rest structure, preserving flexibility for industries with variable production cycles, reports STPS. 

International Comparisons and Productivity Debate

The reform aligns Mexico with regional peers such as Ecuador and Chile, both of which have adopted 40-hour standards. International comparisons, however, have intensified the debate.

Data from the Organization for Economic Co-operation and Development (OECD) shows that Mexico consistently ranks among member countries with the highest annual average working time. Meanwhile, several EU economies — including France, Denmark, Austria, Germany, and Finland — operate with standard workweeks at or below 36 hours. The OECD average stands at roughly 37 hours.

STPS argues that reducing weekly hours can improve work-life balance, reduce burnout, and encourage productivity gains per hour worked. Critics, among them CCE, counter that without parallel improvements in formalization, enforcement, and business productivity, the reform may not automatically translate into higher economic performance.

The Critical View 

Despite official assurances, the reform has drawn criticism from some analysts who question whether it represents a transformative shift, arguing that the proposal’s flexibility on scheduling and overtime could limit its real impact on working conditions.

One concern is that the reform does not explicitly mandate a five-day workweek with two rest days. Instead, it guarantees at least one day of rest for every six days worked, consistent with existing standards in countries such as France, Canada, Italy, Brazil, Chile, and the United States. Opponents — including some opposition legislators, labor-law specialists, and policy analysts — argue that preserving scheduling flexibility may dilute the intended reduction in effective workload, particularly if six-day work cycles remain permissible in practice.

Others raising concerns include regional business chambers, industrial associations, and SME federations affiliated with the CCE. They point to the absence of differentiated treatment or fiscal incentives for SMEs, noting that the reform applies uniformly across company sizes. In a context of modest economic growth and persistent informality, these groups warn that firms may respond by accelerating automation, slowing hiring or increasing reliance on voluntary overtime to offset higher labor costs.

Structural Implications for Business

For companies, the reform signals the need for medium-term operational restructuring. Firms may need to redesign shifts, expand headcount, invest in automation or renegotiate collective agreements. Labor-intensive sectors — including manufacturing, retail, hospitality, and agro-exports — could face higher short-term adjustment costs.

Meanwhile, the government positions the reform as part of a broader labor agenda under President Claudia Sheinbaum, emphasizing legal certainty, social dialogue, and a gradual transition to protect employment.

If approved by both chambers of Congress, the 40-hour week would mark one of the most significant constitutional labor adjustments in decades. Whether it becomes a productivity-enhancing structural reform or a limited symbolic shift will depend on implementation, compliance, and Mexico’s broader economic trajectory through 2030.