Mexican Law Guarantees Four Payments to Workers Who Quit

Mexican workers who resign voluntarily retain a non-waivable right to four settlement payments under the Federal Labor Law: unpaid wages, proportional Christmas bonus, unused vacation days, and a 25% vacation premium, regardless of any waiver clause signed at departure. Payroll, tax, and compliance obligations tied to these payments remain enforceable for one year after an employee's exit, with the Federal Attorney's Office for the Defense of Labor (PROFEDET) able to pursue claims on workers' behalf. 

Any employee in Mexico who resigns voluntarily is entitled to a final settlement payment, known as a finiquito, covering four benefits that the Federal Labor Law (LFT) classifies as non-waivable: outstanding wages, a proportional Christmas bonus, unused vacation days, and a vacation premium of at least 25%. Employers cannot withhold any of these payments, regardless of the reason for departure or any document the employee signs.

Article 33 of the LFT is unambiguous on this point: a resignation letter stating that the worker "waives all rights" carries no legal weight. The most recent amendment to the LFT, published in the Diario Oficial de la Federación (DOF) on May 14, 2026, left this protection unchanged. No private agreement between employer and employee can lower the legal floor these four benefits establish, and companies cannot condition payment of the finiquito on a worker signing away future claims.

What resignation does eliminate is the constitutional severance owed only in cases of unjustified dismissal: three months of salary plus 20 days for every year of service. Those payments apply exclusively when an employer terminates a worker without cause. A voluntary resignation does not trigger them.

Four Payments, Calculated by Law

The first component covers unpaid days worked in the final payroll period. If a payroll cycle closes on the 30th and an employee departs on the 18th, the employer owes wages for those 18 days, a sum fully subject to income tax (ISR).

The second is the proportional Christmas bonus, set by Article 87 of the LFT at a legal minimum of 15 days of salary per full year worked. The calculation divides days worked in the year by 365, then multiplies by 15 and the daily wage. The Tax Administration Service (SAT) exempts up to 30 days of the Unit of Measurement and Update (UMA) — MX$117.31 (US$6.70) per day in 2026 — from ISR each year; any amount above that threshold is taxable.

The third is unused proportional vacation days, governed by Articles 76 and 79 of the LFT. Under a reform in effect since 2023, the first year of employment generates a minimum of 12 vacation days, the second year 14, and the third and fourth years 16. If those days went unused, the employer must pay them in cash upon departure.

The fourth is the vacation premium, set by Article 80 at a minimum of 25% of the value of those vacation days, and it is not negotiable. A worker owed six days of proportional vacation, for example, would receive the equivalent of 7.5 days of salary through this premium.

Article 162 of the LFT establishes a seniority premium of 12 days of salary per year of service. In cases of voluntary resignation, this payment only becomes mandatory once a worker has accumulated 15 years or more with the same employer. Below that threshold, employers are not legally obligated to pay it. The calculation is capped at twice the general minimum wage, which in 2026 equals MX$630.08 (US$36.00) per day following the increase approved by the National Minimum Wage Commission (CONASAMI) effective Jan. 1, 2026.

The severance rules sit within a broader wave of labor changes reshaping employer obligations in Mexico this year, from the phased reduction of the workweek to 40 hours to expanded pay-transparency and compliance requirements, all of which are pushing companies toward closer documentation of worker entitlements .

A One-Year Window to Claim

The LFT does not set a fixed number of days within which an employer must deliver the finiquito, but Article 516 gives workers one year from their departure date to file a claim. The Federal Attorney's Office for the Defense of Labor (PROFEDET) offers free legal guidance to workers pursuing unpaid settlements, and can assist in filing a claim before Mexico's labor courts if an employer fails to comply.

For employers, the distinction between finiquito and liquidación remains a frequent source of disputes: liquidación, which includes constitutional severance, applies only to unjustified dismissals, while the finiquito applies broadly to resignations, expired temporary contracts, and justified dismissals alike. With enforcement scrutiny increasing alongside Mexico's other labor reforms, companies with high turnover are likely to face closer review of how consistently they calculate and disburse these four legally mandated payments.