As previously discussed in our April 2 and December 22 Alerts, Mexico's executive branch submitted a bill to the Mexican Congress that intends to reform various laws with respect to outsourcing of personnel. The Mexican executive branch previously stated that, given the importance of outsourcing of personnel, it would take into consideration the recommendations of participants from different industries.

After a virtual meeting held by the Ministry of Labor on March 19, 2021, among different actors including employers and unions, on April 5, 2021, President Manuel Lopez Obrador held a meeting with the main representatives of the employment and business sectors, different public officers of the Mexican government, as well as representatives of Mexico's legislative branch.

Agreements reached in the meeting were submitted to the Mexican Congress for their approval. Consequently, on April 13, 2021, the Mexican Chamber of Representatives approved an opinion on the bill reforming various laws with respect to outsourcing. Even though the bill is still to be approved in the plenary session by Congress, it is likely that it will be approved in terms of the opinion already approved by the Mexican Chamber of Representatives. Below is a summary of some of the most relevant matters contained in the opinion of the bill.

Outsourcing Reform

Some of the most relevant matters that are likely to be reformed with respect to outsourcing include:

  • Outsourcing of personnel will be prohibited.
  • Rendering of specialized services different to the corporate purpose and the preponderant economic activity of the entity receiving the services will be permitted.
  • Services or complementary or shared works rendered between entities of a same business group will be considered as specialized services.
  • Entities that provide specialized services will be subject to new authorizations and registrations, especially before the Ministry of Labor and a public registry for companies that provide specialized services and works.
  • Annual profit sharing with employees will be limited to a maximum of three months of salary for each employee, or the average of profit sharing received in the last three years, whichever is more favorable for an employee.
  • Entities will have a three-month period as of the day in which the reform takes effect to comply with the reform.

For More Information

If you would like further information about this Alert  or other matters pertaining to outsourcing or labor issues in Mexico, please contact Eduardo Ramos-GómezRosa M. ErtzeMiguel de Leon PerezLuis Duhart, any of the attorneys in our Mexico Business Group or the attorney in the firm with whom you are in regular contact.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.