In the Mexican labor environment, severance and termination payments are two key concepts that every worker and employer must understand.
Whether due to a work accident, illness, dismissal, or resignation, knowing your rights will allow you to act clearly and protect your financial stability. Below, I explain the different scenarios, benefits, and procedures that apply in Mexico.
📊 Summary: Severance vs. Termination Payments
| Concept | When It Applies | What It Includes |
|---|---|---|
| Severance | Work-related risks, unjustified dismissal | Economic compensation for damage or loss |
| Termination payment | End of employment relationship | Accrued and proportional benefits |
🏥 1. Compensation for Work-Related Risks
When a worker suffers an accident or illness related to work, the social security system in Mexico protects their rights through IMSS (for private sector workers) or ISSSTE (for public sector workers).
Main Worker Rights:
| Right | Description |
|---|---|
| Free medical care | At IMSS or ISSSTE facilities |
| Temporary disability | 100% of base salary subsidy for up to 52 weeks |
| Partial permanent disability | Compensation proportional to degree of disability |
| Total permanent disability | Lifetime pension when unable to return to work |
| Death compensation | For economic dependents of deceased worker |
How Is the Compensation Process?
| Step | Description |
|---|---|
| 1 | Worker must be affiliated with IMSS or ISSSTE |
| 2 | The accident or illness must be properly documented |
| 3 | It must be proven to have occurred during or due to work |
| 4 | A procedure is initiated with the corresponding institution |
📎 Consult official guidelines from IMSS and ISSSTE.
⚖️ 2. Termination Payment
When an employment relationship ends, depending on the reason, the worker may be entitled to a termination payment. This payment compensates for job loss and includes various accrued benefits.
Common Scenarios:
🔴 Unjustified Dismissal
If the employer ends the employment relationship without legal cause, the worker is entitled to:
| Concept | Description |
|---|---|
| Three months of integrated salary | Constitutional compensation |
| 20 days of salary for each year worked | Seniority premium |
| Proportional benefits | Christmas bonus, vacation, vacation premium, etc. |
👉 You can go to PROFEDET for free advice.
🟢 Voluntary Resignation
In this case, the worker is not entitled to compensation. However, they must receive:
| Concept | Description |
|---|---|
| Proportional Christmas bonus | Corresponding part of the year worked |
| Unused vacation and vacation premium | Accrued days not taken |
| Pending salaries | Days worked not paid |
🟡 Fixed-Term Contract
If the contract expires naturally and is not renewed, there is generally no termination payment, unless the contract specifies otherwise.
📝 3. Justified Dismissal
Occurs when the employer terminates the contract for valid legal reasons, such as:
| Cause | Description |
|---|---|
| Serious misconduct | Theft, violence, fraud, harassment |
| Breach of obligations | Failure to attend work without justification |
| Business restructuring | Staff reduction due to economic reasons |
Proper Procedure for Justified Dismissal:
| Step | Description |
|---|---|
| 1 | Written notice to the worker with reasons for dismissal |
| 2 | Delivery of documentary evidence of the infractions committed |
| 3 | Payment of accrued benefits (no extra compensation) |
💡 Important: Even without termination payment, the employer must pay everything owed up to the dismissal date.
📊 How Is Termination Payment Calculated?
Basic example for unjustified dismissal:
| Concept | Value | Calculation |
|---|---|---|
| Monthly salary | $15,000 MXN | – |
| Years worked | 2 years | – |
| 3 months of salary | $45,000 MXN | $15,000 × 3 |
| 20 days per year worked | $20,000 MXN | ($15,000 ÷ 30) × 40 days |
| Proportional benefits | $10,000 MXN | Approximate |
| Total estimated | $75,000 MXN |
🔗 Use the Mexican Government’s official calculator to estimate exact amounts.
📊 Comparison Table: Scenarios and Rights
| Scenario | Compensation | Proportional Benefits |
|---|---|---|
| Unjustified dismissal | ✅ Yes | ✅ Yes |
| Voluntary resignation | ❌ No | ✅ Yes |
| Justified dismissal | ❌ No | ✅ Yes |
| Work-related risk | ✅ Yes (IMSS/ISSSTE) | ❌ Not applicable |
| Fixed-term contract expired | ❌ No | ✅ Yes (if applicable) |
🧾 What to Do After a Dismissal or Work Accident?
| Step | Action |
|---|---|
| 1 | Document everything: Contracts, receipts, messages, medical evaluations |
| 2 | Request in writing your termination payment or compensation |
| 3 | Consult PROFEDET or a specialized labor attorney |
| 4 | Don’t sign anything without fully understanding it |
Useful Contacts:
| Institution | Function | Contact |
|---|---|---|
| PROFEDET | Free advice for workers | gob.mx/profedet |
| IMSS | Work-related risks | imss.gob.mx |
| ISSSTE | Public sector workers | gob.mx/issste |
| Conciliation Board | Labor dispute resolution | Local |
🔗 Useful Links
| Resource | Link |
|---|---|
| PROFEDET – Free advice | gob.mx/profedet |
| Termination payment calculator | Mexican Government portal |
| Federal Labor Law (DOF) | dof.gob.mx |
| IMSS – Work-related risks | imss.gob.mx |
✅ Conclusion
Understanding the difference between severance and termination payments allows you to claim your rights without fear or misinformation.
Remember:
| Right | Action |
|---|---|
| Work-related risk | Compensation through IMSS/ISSSTE |
| Unjustified dismissal | Full termination payment + compensation |
| Voluntary resignation | Only proportional benefits |
| Justified dismissal | Only proportional benefits |
Whether you face an accident, illness, or job termination, being well-informed is your best defense. If you have doubts, approach labor authorities or seek reliable legal advice.
Your work has value. Protect it with knowledge.
