Mexico: Proposal for a mandatory hiring quota of workers age 60 and above

Employer Action Code: Monitor

The Senate has unanimously approved draft amendments to the Federal Labor Law (Ley Federal del Trabajo – LFT) to require that “older workers” make up at least 5% of the workforce in companies with 20 or more employees. The legislation is now with the lower house (the Chamber of Deputies).

Key details

• The mandate would apply to all employers with 20 or more workers, presumably taking effect immediately upon promulgation of the law, as nothing in the bill suggests a phased or delayed effective date.
• Older workers would be defined as persons age 60 or older. Age 65 is the current normal retirement age for social security.
• The bill does not specify penalties for noncompliance. In countries that have minimum quotas to employ people with disabilities (Mexico does not), fines for noncompliance are often linked to the national minimum or average wage rate with the money collected used for support programs for such persons.

Employer implications

Employers should monitor the progress of the legislation and review the demographics of their workforce. The bill was originally proposed in 2021 (with a 2% quota), so it has long been under consideration. The employment rate for persons in Mexico age 55 to 64 was 56.6% as of the fourth quarter of 2022; while not far from the corresponding OECD average of 63.3%, many workers in Mexico are engaged in informal employment and are not captured by the official labor market data. According to the bill’s sponsors, the national statistics agency (Instituto Nacional de Estadística y Geografía – INEGI) estimates that seven out of 10 older workers are informally employed. People age 60 and above represent 19.5% of the total population age 20 and over (INEGI 2020 data). The mandate, if approved, would be the first of its kind among OECD nations. Given the speed with which many nations are aging, it may not be the last.