Managing hourly workers in New Mexico can be complex — especially around paid sick leave laws.
State requirements can interact with federal standards, and in some areas, local rules may layer on additional obligations for employers.
New Mexico’s wage and hour framework blends statewide standards with local variations, making it essential for employers to understand both levels of regulation.
The state maintains a higher minimum wage than the federal rate and requires paid sick leave under the Healthy Workplaces Act. Meanwhile, several cities—including Albuquerque, Santa Fe, and Las Cruces—have enacted their own wage or leave ordinances.
Whether you employ workers directly or through an Employer of Record (EOR) like HireArt, staying compliant in New Mexico means tracking both state and municipal requirements.
This blog is based on information available to HireArt as of October, 2025. HireArt does not provide tax, accounting or legal advice. This material has been prepared for informational purposes only, and should not be relied on for, tax, legal or accounting advice. Consult your own tax, legal and accounting advisors before engaging in any related activities or transactions.
New Mexico sets its own minimum wage, and several localities enforce higher rates.
The state minimum wage is $12.00 per hour.
However, employers in cities such as Albuquerque, Santa Fe, and Las Cruces must follow local ordinances that typically set higher minimums. Rates are reviewed annually and may vary based on city or county legislation.
Employers must follow the higher applicable rate between state and local law.
New Mexico law requires employers to provide paid sick leave under the Healthy Workplaces Act.
Employees accrue one hour of paid sick leave for every 30 hours worked, up to 64 hours per year. Accrued time can be used for illness, injury, family care, domestic violence, or public health–related reasons. Unused hours must carry over from year to year, though usage may be capped at 64 hours annually.
Several New Mexico cities have passed ordinances that go beyond state requirements.
Local governments may set higher minimum wage rates or broader paid leave benefits. Employers with locations in multiple New Mexico cities must comply with the most generous applicable rule to ensure full compliance with both state and local labor standards.
New Mexico does not have a statewide requirement for meal or rest breaks for adult employees.
Employers should follow internal company policies, collective bargaining agreements (CBAs), or the federal Fair Labor Standards Act (FLSA). Providing regular rest periods, while not required, supports productivity and employee wellbeing.
Whether paid time off (PTO) must be paid out at termination depends on the employer’s written policy or contract.
New Mexico law enforces the employer’s stated policy, as long as it is clearly communicated to employees. If earned vacation or PTO is treated as wages, it must be paid upon termination.
Reimbursement rules in New Mexico are policy-driven.
There is no general statute requiring reimbursement for work-related expenses. Employers should adopt written reimbursement policies to cover items such as mileage, remote work equipment, or other necessary business costs, ensuring clarity and consistency.
Employers must issue detailed wage statements and provide final pay within the required timeframe.
Consistent, accurate wage documentation is essential for compliance with state law.
New Mexico applies both federal and state economic-realities tests to determine whether a worker is an employee (W-2) or an independent contractor (1099).
If the employer exercises significant direction or control over how work is performed, the worker must be classified as an employee. Misclassification can lead to tax penalties, back pay liability, and other compliance risks.
HireArt acts as an Employer of Record (EOR) to help companies remain compliant with New Mexico’s evolving labor laws. Through HireArt, employers can:
Partnering with HireArt allows employers to reduce compliance risk and manage their New Mexico workforce efficiently and transparently.
