New agreements regarding the labor outsourcing initiative

On Monday 5 April 2021, the Federal Government headed by President López Obrador, reached an agreement with the labor and business sector on the labor outsourcing initiative.

Last 8 November 2020, President López Obrador presented the reform initiative among other laws to the Federal Labor Law, to the Fiscal Code of the Federation. Later the 5 December the Private Initiative led by the CCE chaired by Carlos Salazar, reached an agreement with the Federal Government to postpone the ruling of the initiative against the Subcontracting of personnel, to retake it in the 2021, Therefore, negotiations were resumed this year, reaching the following agreements today, published in the newsletter 041/2021 by the Ministry of Labor and Social Welfare.

a) In general, the subcontracting of personnel is prohibited.

b) In particular way, subcontracting of personnel motivated by specialized services is allowed, that are different from the predominant activity and corporate purpose of the contracting party.

c) The companies that provide this form of personnel subcontracting (specialized services) You must register in a register that the Ministry of Labor and Social Welfare will carry out for this purpose..

d) In case of non-compliance, The contractor of the services will be jointly and severally liable for the labor obligations between the workers of the subcontractor and the subcontractor itself..

e) A term of 3 (three) months for companies that currently have subcontracted workers to transfer these workers to the payroll of the contracting company

Additionally, the issue of worker participation in company profits was discussed., where the following was agreed:

a) The distribution of profits will continue to be based on the basis established in the articles 117 Y 120 of the Federal Labor Law, these being the 10% on the basis established in the fifth paragraph of article 9 of the Income Tax Law,

b) Only now with a limit of three months of salary or the average of the participation received in the last 3 (three) years whatever is most favorable to the worker.

All these agreements taken by the Federal Government with the labor and business sector will be forwarded to the H. Chamber of Deputies to proceed with the corresponding legislative process and, where appropriate, be approved and published in the Official Gazette of the Federation.