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Client Alert | Subcontracting Agreement

04/07/2021

Legal News / Updates

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Agreement on subcontracting initiative

On April 5, 2021, the Ministry of Labor and Social Welfare (“STPS”), published in the labor bulletin 041/2021 that the labor sector, the employer sector, the government of Mexico and representatives of the Legislative Power have reached an agreement around outsourcing.

In this sense, the agreements reached between the parties include the following:

  • The prohibition of the subcontracting of personnel.
  • The regulation of the subcontracting of specialized services other than the corporate purpose and the predominant economic activity of the contracting company.
  • Registration with the STPS and registration in the public registry of companies that outsource specialized services and works.
  • Joint and several liability in the event of non-compliance.
  • The granting of a period of three months for subcontracted workers to become part of the payroll of the employer.

Additionally, an agreement was reached on the issue of profit sharing to avoid possible distortions in capital-intensive companies, creating two modalities for calculating the distribution. With this formula, discretion is eliminated and an increase of 156% (one hundred and fifty-six percent) would be achieved in the amount of profit sharing to workers.

It is important to mention that although an agreement has been reached between the previously mentioned parties, said agreement will not have any validity or will be mandatory if it is not included in the reform process to the Federal Labor Law, which is pending. discussion in the Congress.

We remain at your service for any questions or comments in relation to the above

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