Labor and Employment Articles

October 12, 2021

New Requirements for Providers of Registered Specialized Services or Registered Specialized Work

By Pablo Saénz and Fernanda Magallanes

In accordance with the recent amendment to Mexico’s Federal Labor Law in regard to outsourcing, entities or individuals who obtain a Specialized Service Provider or Specialized Work Registration (“REPSE” for its acronym in Spanish) must refrain from performing any work related to the principal business activity of the beneficiary of such services or work. They must also comply with the obligations established in Mexico’s Federal Labor Law, Social Security Law, National Institute for Employees Housing Fund Law, Income Tax Law (ISR), Value Added Tax Law (IVA), and any other applicable law, as well as any general REPSE rules set forth in article 15 of the Federal Labor Law. The primary obligations of providers of specialized services or work include: i) … read more

July 23, 2021

General Recommendations for Specialized Services Providers in Mexico

By Abigail Maya

Based on recently approved amendments to Mexican labor laws prohibiting the outsourcing of personnel (with the only exception being those providing specialized services), it is crucial for those companies that customarily engage specialized services to take certain actions to avoid any violations of Mexico’s new labor regulations. As such, companies with specialized service providers should consider carrying out the following actions: Prepare a detailed list of vendors to identify which vendors must be registered with the Providers of Specialized Services or Works Registry (REPSE per its acronym in Spanish) of the Mexico’s federal Department of Labor and Social Welfare. Carefully review the terms and conditions of any contracts and/or purchase orders executed with such providers. Notify service providers of the … read more

May 26, 2021

First Complaints Filed Under the USMCA’s Rapid Response Labor Mechanism

By Pablo Sáenz y Daniel Ramírez

First Request for Rapid Response On May 11, 2021, the first request for Rapid Response under the Labor Mechanism set forth in the United States-Mexico-Canada Agreement (“USMCA”) was filed by the American Federation of Labor and Congress of Industrial Organizations (“AFL-CIO”), Public Citizen, and the National Independent Union for Employees of Industries and Services (“SNITIS” for its acronym in Spanish). The request was filed in connection with an allegation that Tridonex, a Mexican automotive company, violated its employees’ rights. The AFL-CIO alleges that employees have been harassed and fired because of their intention to join the SNITIS union. The complaint is based on several allegations that Tridonex violated its employees’ labor rights, including: (i) that employees have not been allowed … read more

April 19, 2021

Decree Amending and Supplementing Article 90 of the Mexican Federal Labor Law

By Pablo Sáenz and Fernanda Magallanes

A Decree published in the Official Journal of the Federation on March 30, 2021, amends and supplements Article 90 to the Mexican Federal Labor Law. The main purpose of this amendment is to guarantee that the yearly review of the minimum wage, is set at a level above the inflation rate. With such change, the minimum wage will never be lower than the inflation rate during its established term, or in other words, during the year for which the minimum wage was set. The amendment’s purpose is to adjust the minimum wage to actual costs of basic goods and services based on sustained and generalized increases in costs reflected in the National Consumer Price Index. Such inflationary increase causes a … read more

April 13, 2021

Seniority Bonus Must Be Paid Even If Not Expressly Requested

By Adrian Salgado

On March 12, 2021, the Second Chamber of Mexico’s National Supreme Court of Justice published a ruling in contradiction to opinion number 2a./J. 66/2020 (10a.), titled “Seniority Bonus. Even if not expressly requested, its payment is required when the employee’s seniority is confirmed and such employee has been terminated or the employment relationship has otherwise been terminated”.  In its holding, the Court resolved the contradiction of opinions 178/2020, between the opinion XIV.T.A.7 L (10a.), issued by the Labor and Administrative Collegiate Court of the Fourteenth Circuit (previously commented on CCN MexicoReport® September 2014 issue) and the opinion issued by the First Labor Collegiate Court of the Eighteenth Circuit by its resolution to the direct amparo 17/2020. In the new opinion … read more

March 23, 2021

Factors to Consider in Mexico Labor Inspections

By Fernanda Magallanes and Esteban Gómez Aguado

Mexico’s recent reforms with respect to tax and labor matters, which began in 2019, have led to an increase in labor inspections and resulted in the imposition of hefty fines. The fines imposed for alleged non-compliance in labor and social security matters are calculated based on the Unit of Measurement and Update (“UMA”). The fines for violations in labor matters range from 50 to 5,000 times the daily value of the UMA, depending on the violation, which is approximately between MX$4,481.00 and MX$448,100.00 Pesos (US$224.00 and US$22,405.00 Dollars at an approximate exchange rate of MX$20.00 Pesos per Dollar). The fines to be imposed resulting from inspections conducted by the Mexican Ministry of Labor and Social Welfare (“STPS”) will be enforced … read more

February 23, 2021

COVID-19 as an Occupational Illness under Mexican Law

By Esteban Gómez Aguado and Daniel Ramírez

In a December 15, 2020 session of the Technical Council of the Mexican Social Security Institute (“IMSS”), the Council issued decree number ACDO.AS2.HCT.151220/340.P.DPES  authorizing the Mexican Department of Economic and Social Benefits “…to implement a proactive assessment strategy as to the work-related risks of employees of related companies who died or were left with lingering symptoms from serious cases of COVID-19, during the (pandemic) emergency period…” (the “Strategy”).  The Strategy consists of an initiative by IMSS’ institutional services to specify the actions and criteria to be considered in classifying COVID-19 cases as an occupational illness.   The Strategy implements criteria to “prequalify” serious cases, those being cases with lingering symptoms and those that resulted in death due to COVID-19.  Both … read more

December 8, 2020

Foreign Employees – Return of Investments in AFORE Retirement Funds

By Adrián Salgado

On November 13, 2020, the Plenary Court on Labor Matters of the First Circuit issued a ruling in contradiction of ruling number PC.I.L. J/67 L (10a.) entitled: “Foreign employees. Such are entitled to the return of the accumulated funds in their individual Retirement Fund Administrator (AFORE) accounts, as well as contributions to the housing subaccount fund when they permanently return to their country of origin, and without being subject to the requirements otherwise set forth in the law.” In its ruling, the court held that the funds corresponding to the retirement subaccounts, advanced age and old age unemployment funds, as well as housing funds, must be paid to foreign employees who permanently return to reside in their country of origin, … read more

October 1, 2020

Validation of Mexican Collective Bargaining Agreements during the COVID-19 Pandemic

By Pablo Sáenz and Fernanda Magallanes

As a result of the 2019 Mexican Labor Law reform and the signing of the USMCA, the Protocol for Validating Existing Collective Bargaining Agreements, which was published in the Official Journal of the Federation on July 31, 2019 (“Protocol”), entered into force on August 1, 2019. Based on such change, all unions in Mexico must validate their collective bargaining agreements within a maximum term of four years, which ends on May 1, 2023. The validation process involves unions consulting with their members and having them vote on whether to approve the contents of their collective bargaining agreement. It is important to note that wages under such collective bargaining agreements are reviewed on an annual basis, while the overall terms of … read more

August 17, 2020

Compliance with Guidelines for Reopening Operations and for Temporary Remote Work

By Pablo Sáenz and Fernanda Magallanes

As a result of the COVID-19 pandemic, Mexican companies that i) are deemed essential, ii) are deemed to be non-essential but are and currently undergoing a reopening process, and iii) those that due to the nature of their work have employees working remotely, must implement and maintain specific written protocols and policies in accordance with federal and local guidelines requiring numerous measures to be taken to ensure a safe return to work, and if applicable, to regulate temporary remote work. In addition to maintaining appropriate protocols and policies, companies must also maintain certain documentation such as logbooks, questionnaires, records of the delivery of personal protective equipment, signage, communications, and training records, among others. In the event of a workplace inspection, … read more