Mexico:
Extension For The Reform On Subcontracting
24 August 2021
L&E Global
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An Executive Order was published in the Official Gazette of the
Federation on Saturday 31 July of this year amending Transitory
Articles One, Three, Four, Five, Six and Seven of the
“Executive Order amending, adding to and derogating various
provisions of the Federal Labour Law; the Social Security Law; the
Law of the National Workers’ Housing Fund Institute; the
Federal Tax Code; the Income Tax Law; the Value Added Tax Law; the
Federal Law of Workers at the Service of the State; the Regulatory
Law on Section XIII Bis of Part B) of Article 123 of the Political
Constitution of the United Mexican States, on Labour Subcontracting
matters.”
The above with the objective of expanding the established term
for compliance with the provisions relating to subcontracting
(outsourcing) until 1 September 2021, as follows:
Transitory Article One was amended to establish that Articles
Four, Five and Six of the Original Reform Executive Order will
enter into force as of 1 September 2021. These articles cover the
amendments to the Federal Tax Code, the Income Tax Law and the
Value Added Tax Law, respectively.
For its part, Transitory Article Three was adjusted to allow
natural persons and entities that provide subcontracting services
to obtain registration with the Department of Labour and Social
Welfare, provided for in Article 15 of the Federal Labour Law, to 1
September instead of August 2021.
In this vein, Transitory Article Four was amended in order to
extend the deadline for the possibility of performing employer
substitutions without the need of transferring assets that are the
object of the substituted company or establishment to the
substituting company to the same date of 1 September.
Transitory Article Five was amended in the same sense, to grant
the same extension of the deadline to those employers who, prior to
the entry into force of the first Executive Order, had requested
from the Mexican Social Security Institute (IMSS) the assignment of
one or more employer’s registrations by class for the purpose
of subscribing their workers at the national level, now having
until 1 September 2021 for deregistering said registrations and, if
applicable, requesting employer’s registration from the
IMSS.
Transitory Article Six was amended to allow companies that
provide specialised services or execute specialised works to
provide information in regard to the parties and the key points of
the contracts they have entered into.
Lastly, Article Seven extends, to 1 September 2021, the deadline
for considering the migration of workers from the companies that
operated under the regime of labour subcontracting as an employer
substitution, provided that the destination company for the workers
acknowledges their labour rights, including seniority and concluded
labour risks before the corresponding legal agencies.
Key Action Points for Human Resources and In-house
Counsel
It becomes apparent from the above that the Executive Order
published in the Official Gazette of the Federation on 31 July 2021
did not involve any amendments in regard to the essence of the
Reform; it does, however, involve the amendment of certain
established deadlines in the Reform Executive Order for the
elimination of subcontracting published in the Official Gazette of
the Federation on 23 April 2021. The above with the objective of
giving companies an additional month to be able to comply with the
requirements of said Reform.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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