Important News: Outsourcing Reform

To Our Clients and Friends

Please be advised that on April 5, 2021, an announcement was made by representatives of the Mexican government in which they inform that they have, in principle, reached an agreement with the business and worker sectors regarding the outsourcing rules in Mexico. This preliminary agreement will have to be analyzed, reviewed and voted upon by Congress.  

The most relevant aspects of the reform are the following: I) The subcontracting of personnel will no longer be allowed; II) The subcontracting of specialized services or the execution of specialized work that do not form part of the corporate purpose and preponderant economic activity of the contracting company regulated is authorized, provided the company is registered before the Department of Labor; III) Once finally approved a period of three months will be granted in order to carry out any and all procedures for the subcontracted workers to become part of the payroll of the actual employer (contracting company); and IV) The payment of the profit-sharing will have a maximum limit of three months of salary or the average of the share received in the last three years, whichever is more favorable for the worker; therefore, a cap may be established on the PTU (participation of the workers in the profits of the companies).

We will keep you posted on further developments as they become available.

Sincerely,

ERNESTO VELARDE-DANACHE, INC.

Mexican & International Lawyers