Currently in Mexico the amendment proposal presented by the Federal Executive is being analyzed in relation to the figure of subcontracting, that was incorporated through the amendment to the Federal Labor Law, published in the Official Gazette of the Federation in 2012, as it is regulated in its articles 15 -A, 15-B, 15-C and 15-D. However, on November 12, 2020, the amendment proposal in outsourcing was presented, which aims to prohibit the outsourcing of personnel, for this purpose, this initiative establishes the reform of the articles of the Federal Labor Law, which, in general , contains the following:
- Subcontracting: Prohibiting the subcontracting of personnel, consisting of a natural or legal person providing or making their own workers available for the benefit of another.
- Specialized services and works: These include formalities and requirements that any natural and legal person must fulfill in order to contract the provision of specialized services or the execution of specialized works, such as the formalization of a contract in which the object of the services to be provided or the works to be carried out, and the number of workers who will participate to comply with it, this in accordance with the principle of legal certainty that covers this type of act and, therefore, to guarantee the observance of the provisions applicable in terms of working conditions, safety, health and environment at work.
The contracting party will be jointly and severally liable for labor obligations in the event that the contractor fails to comply with its workers.
In addition, they must have the authorization of the Ministry of Labor and Social Welfare, in which they must prove the specialized nature of the service they provide. Once the reference authorization has been obtained, the contractors will be registered in the registry of providers of specialized services or works.
- Employment agencies: The figure of the “Intermediary” is defined as that natural or legal person who intervenes in the process of hiring personnel to provide services to an employer. Said services may include the recruitment, selection, and training of personnel, among others.
In no case will the intermediary be considered as employer, since this character will only be held by those who benefit from the services.
Those who fail to comply with the aforementioned subcontracting rules and / or benefit from the subcontracting of personnel or the provision of specialized services or works, will be entitled to a fine of 2,000 to 50,000 times the UMA (Unit of Measurement and Update, for its acronym in Spanish) and other responsibilities that may arise. compliance with applicable legislation.
Regarding the “insourcing” if the amendment of section IV of article 15-I of the LFT is approved, it would prohibit the modality of internal subcontracting (services provided by a company related to the contracting party), it is considered essential for the operation of various support or service areas for companies.
In tax matters, the tax amendment proposes the following 2- two most relevant assumptions:
- Tax effects may not be given, the value added tax may not be considered creditable for purposes of expenses related to payments or compensation made for the concept of “subcontracting of personnel”, in the terms of labor legislation
- In the event that it is proved that the services correspond to specialized services, or specialized works are executed, they may be deducted for tax purposes on those expenses related to subcontracting, provided that those payments or compensations made for said services are related to services in those for which contractors have the corresponding authorization from the labor authority.