Introduction to employment laws in New Mexico
Overview
New Mexico’s economy is marked by energy, agriculture, and tourism, and the state has a robust mix of federal and state policies which businesses must abide by. Understanding New Mexico’s employment laws and regulations is essential for any business looking to hire in the state.
This guide will outline the fundamental aspects of state employment laws, including wage regulations, anti-discrimination statutes, and employee benefits, equipping you with the knowledge to manage your workforce effectively and lawfully.
Employing in New Mexico: Key employment laws and practices
Standard work hours
The Department of Workforce Solutions regulates work and overtime laws to ensure fair labor practices throughout the state.
In New Mexico, full-time employment typically ranges between 30 to 40 hours per week, which is consistent with federal standards.
For part-time or contractual employees, work hours may largely depend on the nature of jobs and specific agreements between the employer and employee.
Minimum wage and overtime
The federal Fair Labor Standards Act (FLSA) governs overtime laws. The current minimum wage for private sector employees in New Mexico is $12 per hour.
Non-exempt employees working over 40 hours a week are entitled to overtime pay of 1.5 times their regular pay rate.
If the employee’s role is considered executive or managerial or if they work in licensed or certified professions like law or accounting. In New Mexico, the salary threshold for exemption is $684 per week, aligning with the federal minimum.
Insurance and benefits
Employees are generally subject to FICA Social Security, FICA Medicare, and an additional tax on earnings over $200,000. While there are no specified state-level requirements on providing health, dental, and vision insurance or retirement benefits, businesses must adhere to the requirements set forth by federal laws such as the Affordable Care Act (ACA) and Employee Retirement Income Security Act (ERISA).
Employers should also familiarize themselves with New Mexico’s mini-COBRA, which provides health insurance continuation protections in addition to those covered in federal COBRA.
|
Benefit |
Employer responsibility |
Employee responsibility |
|
Federal Unemployment Tax (FUTA) |
6% of the first $7,000 of each employee’s wages |
None |
|
New Mexico Unemployment Insurance Tax (SUTA) |
0.33% to 6.40% of the first $30,100 of each employee’s wages |
None |
|
New Mexico Workers’ Compensation Assessment Fee |
$2.30 per employee per quarter |
$2.00 per employee per quarter |
|
New Mexico Public Employee Health Benefits |
Contribute towards premiums for state/public school employees |
Pay a portion of premiums based on income level |
Meal and rest periods
New Mexico employment laws do not mandate specific breaks or meal periods for employees. However, according to federal regulations under the FLSA, if an employer chooses to provide breaks of short duration, usually lasting about 5 to 20 minutes, these breaks must be paid. Meal periods, typically lasting at least 30 minutes, are generally not compensated unless the employee is required to perform duties while eating.
Common business practice recommends providing employees with at least a 30-minute break for every eight-hour shift. Offering regular breaks and meal periods can contribute positively to employee well-being and productivity.
Anti-discrimination laws
In line with federal laws such as Title VII of the Civil Rights Act and the Americans with Disabilities Act (ADA), New Mexico HR compliance requires businesses to adhere to strict anti-discrimination laws. These regulations prevent discrimination based on race, color, national origin, sex, pregnancy, religion, age, disability, or veteran status.
The New Mexico Human Rights Act prohibits discrimination based on sexual orientation and gender identity in matters of hiring, promotion, termination, and other employment conditions. Employers with four or more employees come under this law’s ambit.
Multiplier makes it easy to manage benefits for New Mexico employees.
Leave policies
Leave policies in New Mexico are mainly governed by federal laws. The state does not have any specific statutes requiring employers to provide paid vacation or sick leave. However, many employers choose to offer these benefits as part of their compensation packages.
Leave type | Required by state law? | Typical policy |
Vacation leave | No | Discretionary |
Sick leave | No | Follows FMLA Guidelines |
Parental and maternity leave | No | Follows FMLA Guidelines |
Bereavement leave | No | Discretionary |
Jury duty | Yes | Unpaid Leave |
Military leave | Yes | Follows USERRA Guidelines |
Termination laws
In New Mexico, employment relationships are usually considered “at-will,” meaning either party can terminate the relationship without notice unless otherwise agreed upon in an employment contract or collective bargaining agreement. However, it’s common practice to give at least two weeks’ notice prior to termination.
In cases of mass dismissal, the federal Worker Adjustment and Retraining Notification Act (WARN Act) requires employers to provide 60 days’ notice to affected employees. While the law doesn’t require employers to provide severance pay, it’s common to offer a severance package, often calculated based on the length of service.
Easily onboard employees in New Mexico?
Safety and health
New Mexico employers are required to provide a safe and healthy work environment in accordance with the rules set by the Occupational Safety and Health Administration (OSHA). This includes compliance with industry-specific safety standards and reporting workplace injuries.
Employers are also required to properly train employees on safety protocols, frequently inspect the workplace for hazards, and immediately address any identified safety concerns.
Taxes in New Mexico
Employers in New Mexico need to consider both federal and state taxes when running payroll. These include Federal Income Contributions Act (FICA) taxes, which cover Social Security and Medicare, as well as state unemployment tax. The cost of these contributions is shared between the employer and the employee.
Federal unemployment taxes (FUTA) are also the employer’s responsibility. In New Mexico, an employer’s total employment cost can range from 8.58% to 20.05%, while an employee’s total cost can be between 7.65% and 8.55%.
Income tax rates in New Mexico vary based on income level and filing status. The state tax rate ranges between 1.7% and 5.9%, and the federal rate ranges from 10% to 37%.
Tax type | Employer responsibility | Employee responsibility |
Federal income tax withholding | Yes | Yes |
Social Security | Yes | Yes |
Medicare | Yes | Yes |
Federal Unemployment Tax (FUTA) | Yes | No |
New Mexico state income tax withholding | Yes | Yes |
New Mexico Unemployment Insurance Tax (SUTA) | Yes | No |
New Mexico Workers’ Compensation Assessment Fee | Yes | Yes |
New Mexico Public Employee Health Benefits | Yes | Yes |
Managing New Mexico employees with an Employer of Record (EOR)
Navigating the intricacies of New Mexico employment laws can be a daunting task. From understanding the nuances of overtime regulations to adhering to the state’s minimum wage guidelines, ensuring HR compliance requires a considerable investment of time and resources.
This is where Multiplier steps in. Our (EOR) Provider solution allows you to legally hire full-time employees without establishing a local entity.
With our Global Payroll Platform, you can seamlessly handle local taxes, contributions, and withholdings while disbursing salaries to your employees on time.
Book a demo with Multiplier today to see how our solutions can transform your HR operations.
FAQs
In New Mexico, any employees working between 30 to 40 hours per week are generally considered full-time employees. However, certain job roles or professions might have different guidelines based on specific employment contracts or collective bargaining agreements.
According to the Fair Labor Standards Act (FLSA), non-exempt employees are entitled to overtime pay at 1.5x their regular rate if they work more than 40 hours in a week.
However, employees earning more than the state or federal exemption threshold of $684 per week and performing certain executive, managerial, or licensed professional duties are often exempt from this overtime requirement.
The minimum wage for private-sector employees in New Mexico is currently $12 per hour. However, this rate is subject to change based on inflation and other socioeconomic factors.
Employers in New Mexico have varying payroll contribution rates based on Unemployment Insurance, FICA Social Security, FICA Medicare, and FUTA. Employees have their share of contributions toward FICA Social Security, FICA Medicare, and an additional 0.90% tax on earnings over $200,000. State and federal income taxes also apply based on income levels.
While there is no state statute governing the amount and payment of vacation time in New Mexico, employers commonly offer paid or unpaid vacation leave to their employees.
Employers also typically observe federal public holidays as paid days off. Under the Family and Medical Leave Act (FMLA), eligible employees can take up to 12 weeks of unpaid, job-protected leave per year for certain family and medical reasons.
