New Mexico Labor Laws - The Complete Guide for 2024

Over the last few years the world has changed drastically, and with it, many states' labor laws across the country have been created or updated to better fit the local business and industry landscape. New Mexico has both established labor laws as well as completely new legislation for 2022 to watch out for. Employers in the state can use this article as an informational guide to help with compliance for New Mexico labor laws.

To help ensure compliance with New Mexico labor laws, even larger employers may want to leverage solutions or services from an established New Mexico payroll and HR company, like Payday HCM.

New Mexico Hiring Laws

New Mexico Arrests & Conviction Laws

Aside from federal and New Mexico non-discrimination laws, there are also some things that New Mexico employers need to be aware of when it comes to arrests, convictions, and the hiring process. 

First, accessing records relating to arrests that did not result in charges is not allowed. However, employers that submit a notarized release obtained from an applicant or employee may access any record relating to felony and / or misdemeanor offenses. Employers generally may not disclose any of obtained criminal records except as permitted by law. 

For more information, New Mexico employers can go to the New Mexico Human Rights Bureau.

New Mexico “Ban the Box” Law

In 2019 New Mexico adopted the Criminal Offender Employment Act (COEA), known as ban-the-box. The COEA expands ban-the-box to private employers with four or more employees from inquiring about an applicant's criminal history on an initial employment applicant and inquiring about an applicant's criminal record has been sealed or expunged. In practice, employers should wait until after an interview to inquire about an applicant's criminal history.

New Mexico Drug & Alcohol Testing Laws

While New Mexico has no comprehensive law regulating the use of drug or alcohol testing by private employers, employers typically may not take adverse employment action against an applicant or employee as a result of the New Mexico state medical marijuana law.

Important to note, however, employers may still take adverse action against an employee for use or participation in such activities on work premises, or while being under the influence on work premises. 

For more information, New Mexico employers can visit the New Mexico Department of Health.

New Mexico New Hire Reporting Laws

New Mexico requires private employers to report new hires to the New Mexico New Hire Directory. This can include certain employees who are returning to work.

Employers who fail to report newly hired or recalled workers may be fined up to $20 for each violation and up to $500 if the failure is the result of a conspiracy between the employer and employee not to supply the required report or to supply a false or incomplete report.

New Hire Reporting Requirements

Each time an employer makes a new hire or recalls an employee, they must report the following information within 20 days of the date of hire or re-employment. 

Employers must report an employee’s:

• Name
• Address
• Social Security Number
• Date of Hire

Employers must also report their own:

• Name
• Address
• Federal Identification Number

NOTE: employers reporting electronically must transmit twice-monthly, not more than 16 days apart.

How To Report New Hires

New Mexico employers may report new hires electronically through the New Mexico New Hires Directory. Alternatively, employers may submit a paper report, which may be faxed or mailed to the New Hires Directory. 

The following paper forms may be used for new hire reporting in New Mexico:

• New Mexico New Hire Reporting Form
• Form W-4 (the employer's name, federal identification number, and address must be written at the top of each form)
  
  

New Mexico Wage & Hour Laws

New Mexico employers typically have the hardest time complying with the wage and hour laws of the state, since there are so many. Ranging from the state’s complex minimum wage scale to more standard regulations like the Fair Labor Standards Act (FLSA).

New Mexico Minimum Wage

New Mexico minimum wage may differ depending on the location of the business within the state.

Current New Mexico Minimum Wage

*Effective date for the change is March 1st, 2024.
**In this instance, the higher, state minimum wage prevails over the county wage.

Historical New Mexico Minimum Wage

*Effective date for the change is March 1st, 2023.
**In this instance, the higher, state minimum wage prevails over the county wage.

New Mexico Tipped Minimum Wage

Current New Mexico Minimum Wage for Tipped Employees

*Effective date for the change is March 1st, 2024.

In regards to the city of Santa Fe and Santa Fe County, as long as a tipped employee is making the normal hourly minimum wage (refer to the first chart), through any combination of tips and wages, the employer is in compliance with the Living Wage Ordinance for Santa Fe and New Mexico.

It’s important to note for New Mexico employers, if the tipped employee's total hourly compensation rate does not equal or exceed the applicable standard minimum wage rate, the employer must pay the employee the difference between the wage received and the applicable minimum wage rate. 

A tipped employee is categorized as a worker who customarily and regularly receives more than $30 a month in tips.

Historical New Mexico Minimum Wage for Tipped Employees

New Mexico Payroll Deductions

New Mexico employers are required to pay wages to their employees in full unless lawful deductions or other payroll deductions are authorized by both the employer and the employee. More information can be obtained via the New Mexico Taxation & Revenue Department. 

Any employer who withholds a portion of an employee’s wages for payment of federal income tax must withhold New Mexico state income tax as well. 

This applies to some agricultural employees, however, there are some exceptions. An employer furnishing food, utilities, supplies, or housing to an employee who is engaged in agriculture work, may deduct the reasonable value of such furnished items from any wages due to the employee.

Any income tax wholly earned by a Native American member of a New Mexico-recognized tribal nation is also exempt from withholding tax.

New Mexico Wage Payment Timing Law

Typically, New Mexico employers are required to pay employees their wages on regular paydays. These paydays can not be more than 16 days apart. 

More specifically, wages earned between the 1st and 15th day of a calendar month must be paid by the 25th of that month. Any wages earned between the 16th and the last day of a calendar month must be paid by the 10th day of the following calendar month. 

Some employers may have a central location outside of New Mexico where payroll is processed. If this is the case then wages earned between the 1st and 15th day of a calendar month must be paid by the last day of that same month. Any wages earned between the 16th and the last day of a calendar month must be paid by the 15th day of the following calendar month.

Employers, of course, may choose to pay their employees more frequently than the above outline timelines.

Wage Payment Timing Exemptions

Any employers that compensate their employees via commission or some other form of task or piece basis may pay those employees on a monthly basis. If using a monthly basis, employees must be paid on or before the 10th day of the following calendar month. The employee and employer must also agree to this type of payment at the time the employee is hired. 

Executive, administrative and professional employees as well as outside salespersons, may be paid monthly, except for those employees whose wages are subject to the provisions of a collective bargaining agreement.

New Mexico Final Pay Rule

When it comes to New Mexico final pay, requirements differ for employees being fired versus employees who quit.

Across all employees though, there are no laws in regards to the payment of unused employee benefits in New Mexico. However, if an employer has a paid time off (PTO) policy in which employees accrue vacation time or any other PTO, then any unused accrued PTO is considered earned wages and the employee must be compensated for it in the final paycheck.

Final Pay Rule for Firing an Employee 

If any employee is involuntarily terminated, any unpaid wages become due immediately on demand and must be paid within 5 days of discharge, so long as the unpaid wages are of a fixed or definite amount. 

If wages are not of a fixed or definite amount, for instance, any wages based on task, piece, or commission, then payment must be made within 10 days of discharge.

Final Pay Rule when an Employee Quits 

Any employee quits without having a written contract for a definite period, then final pay is due at the next succeeding payday.

New Mexico Meal & Rest Breaks

New Mexico labor laws do not require employers to provide any meal or rest breaks for employees. However, any breaks that are less than 30 minutes long must be paid.

New Mexico Overtime Law

New Mexico does require private employers to offer overtime. According to New Mexico Overtime Law, employees are entitled to overtime pay equal to 1.5 times their regular rate of pay for all hours worked over 40, over the course of any seven-day period. 

There are some exceptions to the 40 hours per week standard, which apply to police officers and firefighters employed by public agencies as well as hospital and nursing home employees. 

This applies to all employees except those specifically exempt by law. These include exempt employees under the Fair Labor Standards Act (FLSA) and salespersons and employees who are commissioned, paid by piecework, or on a flat-rate schedule.

Fair Labor Standards Act (FLSA)

New Mexico employers must also ensure compliance with the Fair Labor Standards Act (FLSA). The FLSA covers topics such as employee classification, minimum wage, overtime, child labor, and more, it is critical that employers understand the FLSA in and out.

New Mexico Child Labor Laws

According to New Mexico Child Labor Laws, a child must be at least 14-years old to work in specified occupations. Employees that are subject to New Mexico Child Labor Laws are also restricted to work outside of school hours only and for limited periods of time. 

To help employers stay compliant with child labor laws, the New Mexico Department of Workforce Solutions has a brochure on New Mexico Child Labor Laws available for employers.

Child Labor Law Work Permits

Employers must obtain a specific work permit if they plan to hire any employee under the age of 16. These permits must be obtained from the school district in which the young new hire is enrolled. 

The New Mexico Department of Workforce Solutions has provided instructions for obtaining and issuing work permits for child labor.

Child Labor Hour Restrictions

New Mexico has the same hour restrictions for minors as Federal Child Labor Laws and there are no hour or time restrictions for employees ages 16 or older.

However, there are some additional hour restrictions for New Mexico Employees under the age of 16. 

14- and 15-year-olds are permitted to work:

• Between 7 am and 7 pm
  • Between 7 am and 9 pm between June 1st and Labor Day
• Up to three hours a day on a school day
• Up to eight hours on a non-school day
• Up to 18 hours per week on a school week
• Up to 40 hours on a non-school week

Child Labor Occupation Restrictions

The FLSA has a list of prohibited occupations for minors ages 14 and 15, as well as a list of hazardous occupations for minors ages 16 and 17.

However, state law also has certain occupational restrictions for minors in New Mexico.

New Mexico Child Labor Laws - Entertainment Industry

New Mexico has child labor laws specifically for the entertainment industry. This includes motion pictures (movies), theater, radio, and television productions. 

The laws require employers to adhere to specific education and safety requirements for working in the entertainment industry as a minor. There is also no age requirement for working in the entertainment industry. 

Lastly, New Mexico entertainment industry employers are responsible for an Entertainment Pre-Authorization Certificate, which is required for any child performer under the age of 18. The certificate is valid for one year or until the specific project is completed, whichever occurs first.

New Mexico Employee Benefits Laws

New Mexico does have laws regarding employee benefits, however, there are no state laws requiring employers to provide disability benefits.

Continuation of Coverage Law / COBRA or "Mini-COBRA"

According to New Mexico’s continuation of coverage law also known as New Mexico COBRA or "Mini-COBRA", employees and their covered dependents have the right to retain and continue coverage for up to 6 months when they would otherwise lose coverage due to specific life events. The law covers all employers with 2 - 19 employees in the state of New Mexico so that companies not covered by Federal COBRA law are still eligible.  

The right to continuation of coverage does not apply when coverage terminates for nonpayment of a premium, nonrenewal of the policy, or expiration of the policy term.

When an employee or covered dependent is eligible for Medicare, the right to continuation of coverage is limited to coverage under a Medicare supplement insurance policy.

Employers are also required to notify an employee, in writing, when they qualify for continuation of coverage. Employees or dependents exercising this right must notify the employer and make any premium payments within 30 days of receiving a continuation of coverage notice.

New Mexico Leave Laws

While New Mexico currently has no state-specific Family and Medical Leave laws, it does have laws regarding paid sick leave, kin care, voting, and jury leave.

New Mexico Sick Leave

New Mexico Paid Sick Leave Law requires most New Mexico employers with 1 or more employees to provide a minimum of 64 hours (or 8 full days) of paid sick leave annually. 

This sick leave can be for the employee directly or a dependent of the employee. Employees must make a reasonable effort to notify an employer of foreseeable leave. If leave is not foreseeable, then employees should notify their employer of the leave as soon as possible.

The legislative update, also known as Earned Sick Leave, was created as a part of the Healthy Workplaces Act (HWA). 

Sick Leave Eligibility

Employees of companies that are required to comply with the legislation, including part-time employees, seasonal employees, and temporary employees are eligible for sick leave. Generally, the only workers within companies that are exempt from being eligible are contractors.  

Sick Leave Accrual

Employees must accrue at least one hour of paid sick leave per 30 hours worked. Alternatively, employers can frontload 64 hours of paid sick leave on the first day of each year. 

Leave can carry over from period to period but may be capped at 64 hours.

Reasons for Sick Leave

Employees may use sick leave for themselves, or to care for a family member. An employee may use paid sick leave for the following reasons:

• For mental or physical illness, injury or health condition
• For medical diagnosis
• For care or treatment of a mental or physical illness, injury, or health condition
• For preventive medical care
• For meetings at the employee's child's school or place of care related to the child's health or disability
• For absence necessary due to domestic abuse, sexual assault, or stalking suffered by the employee or a family member of the employee
  • Leave must be for:
    • Obtaining medical or psychological treatment or other counseling
    • Relocating
    • Preparing for or participating in legal proceedings
    • Obtaining services or assisting a family member with any of the above activities

New Mexico Kin Care

According to New Mexico’s Kin Care Law, employers that provide employees with paid sick leave must permit their employees to use the leave to care for family members.

New Mexico Jury Duty Leave

According to New Mexico law, employees may not be discharged, threatened, or otherwise coerced due to being selected for jury duty. 

While an employer may not require an employee to use sick leave or vacation time for jury service, they are not required to pay the employee for that time off.

New Mexico Voting Leave

According to New Mexico Voting Leave, employers must grant employees up to 2 hours of leave time to vote, unless the employee’s shift begins two hours before polls open, or ends three hours after they close. 

While employers may not penalize employees for taking this time off, they may specify the time during which the employee may take the leave.

New Mexico Workplace Health & Safety Laws

New Mexico has what is known as an OSHA-approved state plan which covers all private-sector employees. State plans are OSHA-approved job safety and health programs operated by individual states as opposed to Federal Occupational Safety and Health Association (OSHA). 

While workplace health and safety in New Mexico are regulated by the New Mexico Occupational Health and Safety Bureau (OHSB), the rules are generally comparable to that of Federal OSHA. 

New Mexico does have some state-specific standards, including firefighting, convenience stores, field sanitation, and short-handled hoes.

New Mexico Smoking Laws

New Mexico employers generally must prohibit the smoking of anything in indoor workplaces, near entrances, windows, and ventilation systems.

Employers must also post “NO SMOKING” signs at all entrances where smoking is prohibited and “SMOKING PERMITTED” at entrances to work areas where employees may smoke.

New Mexico Discrimination Laws

While New Mexico must adhere to Federal discrimination laws, New Mexico employers also need to be aware of the New Mexico Human Rights Act of 1969 (NMHRA). 

The NMHRA covers employers with four or more employees in the state. The law prohibits employers from making hiring decisions, firing decisions, compensation decisions, or other adverse employment decisions due to an applicant or employees’:

• Race
• Age (40 and older)
• Religion
• Color 
• National origin 
• Ancestry
• Sex
• Sexual orientation 
• Gender identity 
• Pregnancy, childbirth, or condition related to pregnancy or childbirth
• Physical or mental handicap 
• Serious medical condition

The NMHRA also prohibits employers from retaliating against any individual for asserting their rights or participating in any claim or investigation under the law.

New Mexico Workers’ Compensation

New Mexico Workers' Compensation provides benefits to employees who are injured on the job, or who have an illness that is work-related. It includes payment for medical treatment, and for lost wages on a temporary or permanent basis, much like workers' compensation in other states. 

The State of New Mexico Workers’ Compensation Administration administers workers’ compensation insurance and all related workers’ compensation forms.

New Mexico Unemployment Insurance

The New Mexico Department of Workforce Solutions handles New Mexico unemployment and claims in the state of New Mexico. The department has put together tax information for employers, as well as other resources for businesses regarding unemployment. 

Employers who conduct business in New Mexico must register with the New Mexico Department of Workforce Solutions (Department) and file a report to determine business's liability for taxes owed to the Department.

New Mexico Recordkeeping & Posting Requirements

The state of New Mexico has the following recordkeeping and posting requirements.

Recordkeeping Requirements

New Mexico has recordkeeping requirements for payroll and timekeeping, unemployment insurance, health & safety (including workers’ compensation), and child labor.

Payroll & Timekeeping

Employers must retain information for employee wages or other forms of compensation, as well as daily / weekly hours worked going back at least one year for each employee.

If an employer files a report of unclaimed wages, the employee name and last known address of the particular employee in question must be retained for at least 10 years.

Unemployment Insurance

Employers must retain specific information for at least four years for each employee. The information that must be kept includes the following:

• Name, address, and social security number
• Dates / period of employment, and total wages for those periods
• Beginning / ending dates of pay periods
• Whether the employee worked less than full time, and if so, specific hours/dates
• The reasons for separation

Health, Safety, & Workers’ Compensation

Employers must keep a record of all workplace injuries that result in an absence of more than seven days. Records of exposure to toxic materials must also be kept.

Lastly, employers need to keep a Material Safety Data Sheet on hazardous substances for 30 years.

Child Labor

Employers need to keep files of all work permits for all minors that they employ.

Posting Requirements

The following New Mexico labor law posters must be conspicuously placed at the employer's location(s):

• New Mexico (NM) Job Health and Safety
  • Employers covered by state plans *only*
  • All other employers: OSHA Job Safety and Health Protection: It's the Law
• Discrimination is Against the Law
• Minimum Wage Act
• Unemployment Insurance Notice
  • Issued at the time of tax registration
• Workers' Compensation Act
  • Employers also need to post Notice of Accident Forms with the poster for employees
• Human Trafficking
  • Applies to all employers subject to the state minimum wage act, certain businesses that sell alcohol, certain health facilities, and state or local government agencies that manage transportation facilities

The New Mexico Department of Workforce Solutions has a list of federal mandatory postings for the state, as well as additional posters for local cities, counties, etc. 

For easier and more reliant compliance, employers should consider using a labor law poster subscription service, in order to minimize risk. 

Final Thoughts on New Mexico Labor Laws

Many New Mexico-based employers struggle with managing compliance and implementing policies for New Mexico Labor Laws. Oftentimes, modern Human Capital Management (HCM) solutions are the answer to help employers manage employees while remaining compliant with federal, state, and local laws.

For help or more information, contact a New Mexico payroll and HR company today.

Guest Author: Andrew Siegel

Andrew Siegel is the CEO and Founder of Payday HCM, a New Mexico payroll services company serving small and large firms with single-point-of-contact solutions for payroll, employee benefits, outsourced HR, and staffing. An expert in the HCM industry and accomplished author of Employee Engagement: The Path Payday HCM Path to Productivity and Profitability, Andrew has almost 40 years of experience helping countless businesses across the country manage their biggest asset: their employees.