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) maintaining a valid REPSE; ii) entering into a services agreement which includes the registration, a description of the specialized service or work to be performed, the purpose of the service or work, and the approximate number of personnel dedicated to such; iii) identifying all employees with a photograph, name, badge or identity code that identifies them as the service provider’s employees at the beneficiary’s workplace, and such badges or identifiers must be different from those used by the beneficiary’s employees; and iv) providing on a quarterly basis in the months of January, May and September, informational reporting regarding the services agreements entered into during such quarter, to the Mexican Social Security Institute (“IMSS”) and the National Institute for Employees Housing Fund (“INFONAVIT”).
Note that providers of specialized services or work, along with the beneficiary, will be jointly and severally liable for compliance with all applicable labor, social security and tax obligations. To evidence compliance with such obligations, the service provider must submit to the beneficiary: a) a compliance certificate issued by IMSS; b) a compliance certificate issued by INFONAVIT; c) a compliance certificate issued by the Tax Administration Service (“SAT”) d) copies of the internet digital tax invoices (“CFDI”) for employee payroll; e) copies of invoices issued by the bank evidencing the payment of employees’ tax withholdings, payment of employee-employer fees to IMSS, as well as the payment of the mandatory contributions to INFONAVIT; f) a copy of the IVA statement and receipt for the payment for the corresponding period; g) a copy of the ISR statement for salaries for such period, and h) proof of filing the quarterly informational notice with respect to the agreements covered.
It is necessary for both service providers and beneficiaries to comply with and verify compliance with the aforementioned obligations to avoid the imposition of fines levied by the respective Mexican labor, social security, or tax authorities.
