Mexico: General Provisions on Outsourcing Issued

By Vicente Corta Fernández, Francisco de Rosenzweig, Jorge Kim, Guillermo Aguayo and Juan Ignacio López Domínguez © White & Case June 18, 2021
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Mexico City

​On May 24, the Mexican Ministry of Labor and Social Welfare issued general provisions on outsourcing. The agreement issued by the ministry contains the general provisions for the registration of individuals and legal entities that provide specialized services or perform specialized works referred to in Article 15 of the Federal Labor Law, and was published in the Official Gazette of the Federation.

This article contains the general rules for the registration of individuals and legal entities that provide specialized services or perform specialized works and that for this purpose, provide or make available their own workers for the benefit of another to perform the services or perform the specialized works.

The registration will also be mandatory for those companies that provide complementary or shared services or work in the same business group, in accordance with the second paragraph of Article 13 of the Federal Labor Law; such provisions became effective on the day following the day of their publication.

Registration

Individuals or legal entities that provide specialized services or perform specialized works and are interested in registering in the Register must access the platform to apply for registration and must comply with the following requirements:

Provide the following information on the platform: (i) Current electronic signature; (ii) name or corporate name in case of being a legal entity; or paternal and maternal surname and name(s) in case of being an individual; (iii) commercial name; (iv) federal entity; (v) federal taxpayer registry; (vi) address: street or avenue, exterior number, interior number, neighborhood or subdivision, zip code, locality, and municipality or city hall; (vii) geolocation; (viii) telephone number(s), cell phone number(s) and e-mail address(es); (ix) company's bylaws, identification data of the notary public or public broker who issued them, date of its notarization and corporate purpose (in the case of a legal entity); (x) employer registration with the Mexican Social Security Institute; (xi) information on the legal representative of the specialized services or specialized works execution company, first last name, second last name and first name(s), landline and cell phone number, current official identification (voting card, passport or professional license), CURP (personal identification code number) and e-mail (for individuals and legal entities); (xii) affiliation with the National Workers' Consumer Fund Institute (Instituto del Fondo Nacional para el Consumo de los Trabajadores); (xiii) total number of workers at the time of the registration request (by gender: number of women and number of men); (xiv) Specialized Economic Activity according to the "Catalog of activities for the classification of the companies in the labor risk insurance" of the Mexican Social Security Institute contained in the Regulations of the Social Security Law in Matters of Affiliation, Classification of Companies, Collection and Taxation; (xv) activity or activities that wish to be registered in the registry; and (xvi) prevailing economic activity.

In addition, the following documentation must be entered in the platform in PDF or XML format: (i) valid official identification; (ii) power of attorney; (iii) proof of payroll, articles of incorporation and the corporate purpose in force; (iv) proof of registration in the federal taxpayers registry; (v) employer registration(s) with the Mexican Social Security Institute and (vi) proof of address.

The Register will be available for public consultation on an Internet portal of the Ministry of Labor and Social Welfare ("STPS").

On the other hand, in order to be able to be eligible for registration, at the date of registration, individuals and legal entities must be up to date with their tax and social security obligations with the Tax Administration Service, the Mexican Social Security Institute and the National Workers' Housing Fund Institute.

Activities

Individuals or legal entities wishing to join the Register and obtain registration must establish precisely the service they wish to provide or the type of work they wish to perform, and for each of such activities they must prove, under oath, the specialized nature of such activities and describe the elements or factors that support their exceptional nature.

To prove the specialized nature, information and documentation must be provided, according to the requirements of the platform, regarding: training, certifications, permits or licenses that regulate the activity, equipment, technology, assets, capital stock, machinery, risk level, average salary range and experience, among others.

Register Procedure

The STPS must decide on the registration request within 20 business days after receiving it through the platform and the deadline for resolving the registration request will begin to run from the receipt of the request.

The STPS may at any time request additional information or documentation from the applicant or any government entity to corroborate and validate the information and documentation provided.

In case of compliance with the items above, the STPS will register the contractor in the registry, which will be valid for three years and will be essential for the contractor to be able to provide its services in accordance with the applicable legal provisions.

Denial and Cancellation of Registration

Registration may be refused in the event of any of the following circumstances: (i) Failure to accredit the specialized nature of the work or services; (ii) failure to be current with tax and social security obligations; (iii) failure to comply with the requirements and requirements established above; (iv) providing false information or apocryphal documents, or the documentation uploaded to the platform is not in the established format or is illegible; (v) refusal to comply with requests for information or supplementary documentation; and (vi) the data provided are different or inaccurate with respect to the data and information contained in the documents entered.

The registration may be cancelled at any time, when any of the following events occur: (i) When unregistered specialized services or works are rendered; (ii) when specialized services or works are performed that are part of the corporate purpose or preponderant economic activity of the beneficiary; (iii) if there are assessments derived from noncompliance with tax and social security obligations; (iv) in case of failure to comply with the requirements or requirements that served as the basis for granting the registration; (v) failure to comply with the provisions of the Federal Labor Law on outsourcing; (vi) refusal to comply with any request for information or documentation required by the STPS; and (vii) failure to renew the registration within the established timeframe.

Registration Renewal

The individual or legal entity that is registered in the Register must renew its registration every three years through the computer platform. This procedure must be initiated within three months prior to the date on which the registration expires.

Additional Liabilities

The persons who obtain the registration will be obliged to identify their workers by means of the image, name, badge or identity code that links such workers with the company that provides the specialized service or executes the specialized work during the performance of their work in the facilities of the company that contracts the services.

Finally, contracts entered into by the contracting companies with companies that provide specialized services or perform specialized works must include the registration and docket number of the specialized activity or work in force of such companies.

Recommendations

Finally, we recommend that companies providing specialized services or performing specialized works carefully analyze the agreement issued by the STPS in order to be able to comply with all the requirements set forth therein and register in the registry as soon as possible, since, if they are not registered in the registry by Aug. 1, they may be considered to be noncompliant with subcontracting regulations.

Vicente Corta Fernández, Francisco de Rosenzweig, Jorge Kim, Guillermo Aguayo and Juan Ignacio López Domínguez are attorneys with White & Case in Mexico City. © 2021 White & Case. All rights reserved. Reposted with permission of Lexology.

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