Bill on labor subcontracting
As a follow-up to the bill on subcontracting matters, on April 5, 2021, a meeting was held between the President of Mexico, members of his cabinet and representatives of the labor and business sectors, whereby an agreement was reached on issues such as profit sharing, specialized services and entry into force, among others.
The main agreements reached were:
- The prohibition of subcontracting personnel. Personnel subcontracting is considered to be the service consisting of an individual or legal entity providing or making available its own workers for the benefit of another.
- The regulation of the subcontracting of specialized services and works other than the corporate purpose and the main economic activity of the contracting party. Note: The word main was added, which may allow companies to contract shared services.
- Registration with the Ministry of Labor and Social Welfare (STPS, for its acronym in Spanish), and registration in the public registry of subcontracting companies for specialized services and works.
- If the specialized service provider fails to comply its obligations with its workers, the beneficiary of the service shall be jointly and severally liable.
- Granting of a three-month period for subcontracted workers to become part of the real employer's payroll.
- Formulation of two modalities for the quantification of employee profit sharing. The agreement does not specify which would be the referred modalities.
The agreements shall be added to the aforementioned bill or included in a new bill. In either case, the bill must still go through the legislative process in the Congress of the Union, where it could undergo changes before being approved.
If approved as described above, it would have a substantial impact on companies that receive or provide services for which personnel are made available, regardless of whether the service is provided or received by a related party or a third party. Based on the foregoing, we consider relevant to carry out a detailed multidisciplinary analysis of the possible effects that the referred bill could have on the operations of the companies.
For more information on the bill filed in November 2020, please consult the following link Bill on Subcontracting Matters (ey.com).
In case of any questions, please do not hesitate to contact the following specialists:
Óscar Ortiz firstname.lastname@example.org
Jacqueline Álvarez email@example.com
Alejandro Caro firstname.lastname@example.org
Yeshua Gómez email@example.com
Juan Carlos Curiel firstname.lastname@example.org
Mario Ríos email@example.com
Juan Pablo Lemmen – Meyer firstname.lastname@example.org