Executive Branch enacts outsourcing law
29 abril 2021

MEXICO

On April 23, the Executive Branch, through the Official Gazette of the Federation (DOF, in Spanish), enacted the agreement regulating outsourcing. The text imposes a fine on those companies that do not allow inspection by labour authorities to certify compliance with the new provisions. The decree is already in force, with the exception of some articles which will entry into force later.

The approved text includes the following provisions:

  • The prohibition to subcontracting is established in Article 12 of the Federal Labor Law and no longer in Article 13.
  • The subcontracting of services within companies is not prohibited when these are not part of the company’s social objective or predominant economic activity. In order to subcontract these jobs, companies will need an authorization from the Ministry of Labor and Social Protection (STPS, in Spanish).
  • Subcontracting companies will have to register and be part of a STPS registry. The registration will be renewed every three years.
  • In case a subcontracting company does not submit the required information or prevents inspection by the labor authorities, it may be penalized with a fine of up to USD 22,400.
  • A new article is included regarding the right of workers to participate in the companies’ profit sharing. This amount will have a maximum limit of three months of the employee’s salary or the average of the employee’s participation received in the previous three years.
  • With the entry into force of the regulation, a three-month period begins for companies to transfer their own subcontracted personnel to their payrolls and to apply for registration before the STPS in order to provide outsourcing services.
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