Regulatory and corporate anticipation of your company
On November 12, 2020, the Mexican Executive presented to the Chamber of Deputies, the Reform Initiative to modify various laws on the issue of outsourcing. The main objective is to avoid tax evasion and compliance with employer obligations.
It is currently being studied by the Finance and Labour and Social Security Commissions for validation and Social Security for opinion.
The following are the main modifications in accordance with the different applicable laws:
Federal Labour Act (LFT)
- Outsourcing ban
Article 13 LFT. Outsourcing of personnel is prohibited in which one physical or moral person provides or makes available his or her own workers for the benefit of another.
- Intermediation is allowed. Only specialized services unrelated to the social object of the company, in which the employer will be the beneficiary of the service.
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- Article 12 LFT. Intermediary is the physical or moral person involved in hiring staff to serve an employer. These intermediation services may include recruitment, selection, instruction and training, among others. Under no circumstances shall the intermediary be considered an employer, since this character is the one who benefits from the services.
- Article 12 LFT. Intermediary is the physical or moral person involved in hiring staff to serve an employer. These intermediation services may include recruitment, selection, instruction and training, among others. Under no circumstances shall the intermediary be considered an employer, since this character is the one who benefits from the services.
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- Article 14 LFT. The provision of specialized services or the execution of specialized works, which are not part of the social object or economic activity of the beneficiary thereof, shall not be considered outsourcing, provided that the contractor has the authorization referred to in Article 15 of this law.
- Authorization of the Secretariat of Labour and Social Security (STPS) to intermediaries.
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- The permit must be renewed every three years.
- The permit must be renewed every three years.
- Public Registry of Intermediaries
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- A Registry of authorized companies will be made and will be the only ones that can be hired for the intermediation service.
- A Registry of authorized companies will be made and will be the only ones that can be hired for the intermediation service.
- Employer substitution is only set up if goods are transmitted in order to continue the operation.
- Fine up to $4,434,0000 MXN
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- Do not allow the relief of an inspection: 250 to 5,000 times the Unit of Measurement and Update (UMA).
- Do not allow the relief of an inspection: 250 to 5,000 times the Unit of Measurement and Update (UMA).
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- Perform prohibited outsourcing activities or to be intermediated without the STPS authorization: 2,000 to 50,000 UMA.
- Perform prohibited outsourcing activities or to be intermediated without the STPS authorization: 2,000 to 50,000 UMA.
Social Security Act (LSS)
- Quarterly reports to STPS (intermediary)
- Relationship of workers for each contract with Single Population Registration Key (CURP), Social Security Number (NSS) and base contribution salary
- Elimination of employer records by class
- A single employer’s record
- Fine up to $173,760 MXN
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- Do not submit or submit out of time the quarterly information by the intermediary: 500 to 2,000 times the UMA value.
National Housing Fund Institute Act (LINFONAVIT)
- Employer substitution: six months solidarity responsibility
- Quarterly reports (intermediaries)
Federation Tax Code (CFF)
- Qualified tax defrauding is provided for intermediation simulation and outsourcing.
- There is no income tax deductibility (ISR) or Value Added Tax (VAT) accreditation for outsourcing activities unless it is the payment of services or specialized works (it cannot be services that are part of the main object of the company) and that the intermediary has current authorization from the STPS.
Actions
Companies must do the following:
- Review of the social object of the contractor and the contractor.
- Personnel service companies must be registered as specialized services.
- Companies must identify their employers’ records.
- Companies must identify the activities of their staff and reorganize their corporate structure.
Source: Holland & Knight LLP
The information contained in this bulleting is intended for the education and general knowledge of our clients. It is not designed to be, and should not be used as, the only source of information when analyzing and solving a legal problem, and should not replace legal advice, which is based on a specific analysis of the facts. In addition, the laws of the corresponding jurisdiction are different and constantly change. This information is not intended to create, and its receipt does not constitute, an attorney-client relationship. If you have specific questions about a specific de facto situation, we urge you to consult our representative, or another competent legal advisor.
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