The state’s capital is Santa Fe, which is the oldest capital city in the United States.
Payroll and Benefits Guide - United States - New Mexico
Fun Facts
New Mexico is known as the “Land of Enchantment”.
The state has a rich mining history as well as a rich cowboy heritage.
New Mexico has 19 pueblos, which are Native American communities.
The state’s official bird is the roadrunner.
The state’s official flower is the yucca flower.
Contributions
Employee Payroll Tax
| Contribution Type | Rate |
| FICA Social Security | 6.20% |
| FICA Medicare | 1.45% |
| Additional tax | 0.90% |
Employer Payroll Tax
| Contribution Type | Rate |
| Unemployment Insurance | 0.33% – 6.40% |
| FICA Social Security | 6.20% |
| FICA Medicare | 1.45% |
| FUTA | 0.60% – 6.00% |
Payroll
Payroll Cycle
In general, employees in New Mexico are paid either semi-monthly or monthly, with payments on set dates as stipulated in the contract.
13th Salary
There are no legislations for 13th-month payments in New Mexico.
Work Hours and Week
The maximum standard workweek consists of 40 hours, 8 hours per day.
Overtime
New Mexico adheres to the Fair Labour Standards Act (FLSA) and overtime is paid where employees work more than 40 hours in a working week, the employer must pay 150% 0f the regular rate of salary for the extra hours worked as overtime.
Similarly, if employees are scheduled to work on weekends/rest days etc no additional payment is required, however, should an employer request an employee to work in exceptional circumstances on these days, then overtime will be payable at 150% 0f the regular rate of salary for the extra hours worked.
The Wage and Hour Division (WHD) of the Department of Labour (DOL) is responsible for the administration and enforcement of the FLSA.
Leave
Paid Time Off
New Mexico does not have any state statute governing the amount and payment of vacation time, however, it is common for employers to choose to offer a vacation leave, paid or unpaid, to their employees. This must comply with employment law and must be stipulated in any employment contract or collective bargaining agreement.
Public Holidays
There are 11 official holidays, however private employers are not required to provide either time off or overtime pay on these days.
Sick Days
It is common for an employer to follow the Family and Medical Leave Act (FMLA), which provides certain employees with up to 12 weeks of unpaid, job-protected leave per year for specific family and medical reasons (maternity leave, serious illnesses, or if the employee needs to care for a spouse or child). In New Mexico, the laws for state employees allow for 12 weeks of unpaid leave that runs simultaneously with the FMLA leave.
For non-state employees, there are no statutory laws on sick leave in New Mexico. However, an employer may be obligated to follow the Family and Medical Leave Act (FMLA) under the following conditions.
If they have worked for their employer for at least one year, completed a minimum of 1,250 hours over the past year, and worked at a location where the company employs 50 or more employees within 75 miles.
FMLA eligible employees are entitled to:
- Twelve working weeks of leave in any one year for a child’s birth and to care for the new born child within one year of birth.
- The employee may be entitled to leave for the adoption or foster care of a child and care for the newly placed child within one year of placement.
- To care for the employee’s spouse, child, or parent who has a severe health condition.
- A serious health condition that makes the employee unable to perform the essential functions of their job.
- any qualifying exigency arising out of the fact that the employee’s spouse, son, daughter, or parent is a covered military member on “covered active duty.”
OR
- Twenty-six working weeks of leave during a single one-year period to care for a covered service member with a serious injury or illness if the eligible employee is the service member’s spouse, son, daughter, parent, or next of kin (military caregiver leave).
In addition to the FMLA, the New Mexico Human Rights Act requires employers with four or more employees to protect employees against discrimination related to pregnancy, childbirth, or other related medical conditions.
Maternity Leave
Maternity leave falls under the FMLA as well as state laws.
Paternity Leave
Paternity leave falls under the FMLA as well as state laws.
Parental Leave
Parental leave falls under the FMLA as well as state laws.
Termination
Termination Process
Except in mass dismissals or as provided for in an employment contract or a collective bargaining agreement, U.S. law does not impose a formal “notice period” to terminate an individual employment relationship, and employment is stipulated “at will.” This means that either the employer or the employee may terminate the employment relationship without giving either notice or reason, provided it is not illegal, or done on the grounds of discrimination against a group protected by law, etc., and as per the Federal Worker Adjustment and Retraining Notification Act (WARN).
The employment contracts of executives and other highly skilled individuals often incorporate a “just cause termination” clause which mandates that the employer may only terminate the employee for “cause” and lists the permissible grounds. In such cases, the parties negotiate the foundations for a “just cause” termination case-by-case.
Notice Period
In New Mexico, most employees are employed “at-will,” and either party can terminate the employment relationship without notice. In New Mexico, pay out of unused vacation time is not required by law. Still, generally, employers will pay an employee for unused vacation days, provided the employee gave some advanced notice of resignation; there is no official notice period. In general practice, two weeks’ notice is a minimum requirement.
In mass dismissal cases, the employer must follow the Worker Adjustment and Retraining Notification Act (WARN Act), and any employees impacted give 60 days’ notice.
In mass dismissal cases the Worker Adjustment and Retraining Notification Act (WARN Act) must be followed, and employers must give 60 days’ notice to impacted employees.
Severance Pay
Except as provided in an employment contract or collective bargaining agreement, employers do not need to make severance payments to terminated employees. Employers who offer severance payments need to have the provision stated within the employee’s contract, of which both parties must agree to.
Many employers choose to provide a severance payment linked to the employee’s length of service, the most common practice being one week’s pay for every year of service.
Probation Period
Probation Period
No legal provision governs a formal “trial /probation period.” However, it is common practice for employers to set a performance evaluation after an initial stated period of employment of 90 days
Immigration
Foreign nationals without permanent resident status or a work visa are not permitted to work in the United States. An employer seeking to hire a foreign national may file a petition with the United States Department of Homeland Security/ United States Citizenship and Immigration Services (“USCIS”) for an employment visa on behalf of the prospective employee.
If the petition is approved, the prospective employee must obtain a “visa stamp” from a United States embassy or consulate (Canadian citizens are exempt from this requirement). To get a temporary U.S. work visa, an employer must file a petition with U.S. Citizenship and Immigration Services (USCIS).
VAT
New Mexico has a minimum combined sales tax rate of 7.82% (State tax at 5.13% and Local tax average 2.69%%).