April 7, 2021

Mexico's Outsourcing Amendment Initiative

Holland & Knight Alert
Leslie Palma | Jorge Andazola

The Mexican Secretariat of Labor and Social Welfare published on April 5, 2021, an official notice stating that an agreement has been reached on the outsourcing initiative among the labor, business and government sectors of Mexico. The agreement stipulates the following relevant items:

  • the prohibition of personnel outsourcing
  • the regulation of the outsourcing of specialized services other than the corporate purpose and the main economic activity of the contracting company
  • registration with the Secretariat of Labor and Social Welfare and registration in the public registry of companies outsourcing specialized services and works
  • joint and several liability in the event of noncompliance
  • the granting of a three-month term for outsourced workers to become part of the actual employer's payroll
  • an agreement on the issue of employee profit sharing, creating two modalities for its calculation, where the fixed percentage of 10 percent to determine the employee profit sharing will not change; however, the following will be taken into consideration:
    • a limit of three months' salary, for which a salary must be defined
    • once the total employee profit sharing and the individual employee profit sharing for each employee have been determined, the following will have to be carried out for each of the employees: determine the average employee profit sharing received in the last three years, determine the amount of three months' salary and compare the general employee profit sharing for each of the employees against the three-month limit and the average paid in the last three years, to pay whichever is greater

If you have any further questions or comments, please do not hesitate to reach out to the authors.

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