Kachadourian warns that fOvertime hours account for 2% of payroll. For a 40-hour workweek, digital accuracy is key to avoiding fines. Electronic record-keeping reduces errors by 15% and ensures traceability during SAT audits.

---

The implementation of the historic labor reform, which will reduce the workweek from 48 to 40 hours in Mexico, has put scrutiny on the accuracy of overtime pay.

As organizations prepare for the start of the gradual transition in 2027, specialists warn that overtime calculation errors not only persist but could worsen with the new rules.

In an interview for My Pocket, Tomás Kachadourian, Director of Business Intelligence at InfoBlock, explains that the cost of these errors is significant, accounting for between 1% and 2% of a company's total payroll.

The invisible cost of inaccuracy

One of the most common and costly mistakes occurs in the distinction between double and triple time. /Pexels

The fundamental challenge for Mexican companies is not the absence of technology, but the quality, consistency, and traceability of the data generated.

Although approximately 95% of the country's large corporations already use some form of electronic system to track attendance, a significant proportion of them face serious inconsistencies.

These discrepancies are often caused by sudden shift changes, variable work schedules, day-to-day operational issues, and, most importantly, incorrect calculations of overtime.

Kachadourian explains that, within the ecosystem of large companies, a variability of up to 15% has been detected in errors specifically related to overtime.

This margin of error is sufficient to cause direct financial losses and, more worryingly in the new legal environment, to result in penalties from the authorities.

The implementation of specialized management tools, such as TimeBlock, has proven capable of reducing this 15% error rate, thereby restoring that value to the company's profitability and ensuring auditable compliance.

Minutes That Are Worth Three Times As Much

One of the most common and costly mistakes involves the distinction between double-time and triple-time hours. Under the operating model of many industries—especially those that operate 24/7—a difference of just a few minutes can change the pay category for overtime.

“If two hours were cut from your shift, all the hours you had that were previously paid at double time suddenly become triple time,” Kachadourian explained.

This complexity increases with the reform, as the threshold for overtime pay will be lowered as the gradual implementation progresses toward 2030.

Currently, overtime is paid at double the regular rate starting at the 49th hour. However, by 2030, double pay will begin at the 41st hour, which means that the same amount of time worked that is currently considered regular work hours will, in the future, represent an additional cost to the employer as overtime.

If the tracking systems aren't hyper-accurate, companies will end up overpaying due to calculation errors or, worse yet, underpaying and facing workplace risks.

The “Labor SAT” Under Scrutiny”

Another risk factor identified by the specialist is the evolution of regulatory oversight. The Ministry of Labor and Social Welfare (STPS) is moving toward a digital, remote, and automated audit model.

The agency's goal is to automatically cross-check employee entry and exit records with the reports filed with the SAT and the IMSS.

Any errors or discrepancies detected during these cross-checks will trigger automatic alerts for the companies, requiring them to investigate the reason for the adjustments.

The authorities are particularly interested in overtime because it generates taxes and increases social security contributions.

Therefore, organizations that do not have reliable, auditable, and consistent electronic records will be vulnerable to these new review powers.

Mandatory Requirements and Penalties

The labor reform leaves no room for discretion regarding work hour registration. The decree published in the Official Gazette of the Federation (DOF) added fraction XXXIV to Article 132 of the Federal Labor Law, establishing it as an employer obligation to electronically record the work hours of each person, including start and end times.

Failure to comply with this obligation carries severe penalties. Fines can range from 250 to 5,000 Units of Measurement and Update (UMA), which at 2026 values represents penalties of up to 586,550 pesos for each omission detected.

Furthermore, the law establishes that the content of these electronic records will be full proof in labor trials as long as their consistency is proven.

According to InfoBlock, reducing the workday to 40 hours is an urgent opportunity for Human Resources and payroll departments to review their data governance. Shifting from viewing time management as a minor administrative process to treating it as a source of strategic information will be the difference between a successful transition and a financial drain due to overtime payment errors.

---

This article was published on the website My Pocket