Article 74 of the Social Security Law ("SSL") establishes the obligation of employers to annually declare the work related accidents and illnesses, with the purpose of modifying the Occupational Risk Insurance Premium. Such revision has to be made exclusively during the month of February, and has to be filed before the Mexican Social Security Institute sub-delegation where the employer is registered.
The employers obliged to perform the annual declaration are those that quote under the occupational risk insurance that have completed an annual period (January 1 through December 31) in their economic activity, notwithstanding no work related risks have occurred during this period.
The employers excluded to perform this declaration are those that have not yet completed an annual period (January 1 through December 31) by registry, change of activity with modification of premium, or renewal of activities, this last, in case the term of six months has exceeded as of the date of renewal and the date of separation.
The employers with less than 10 employees will be able to choose to file the annual declaration indicated or to cover the average corresponding premium.
The formula to determine the premium for occupational risk insurance payment purposes is the following:
Premium = [(S/365) + V * (I + D)] * (F / N) + M
S = days subsidized caused by temporary incapacity;
V = 28 years, the average contributory life of an individual not killed in an accident and not acquiring a permanent total disability;
I = sum of the percentages of partial or total permanent disabilities divided by 100;
D = number of deaths;
F= premium factor of 2.3;
N = number of workers exposed to the risk. This factor is obtained adding the days quoted by all the workers during the computed year and dividing the result by 365; and
M = minimum premium of the 0.0050.
The employers who have credited the management and security in companies system issued by the Labor and Social Prevision Ministry, will apply a premium factor ("F") of 2.2.
The accidents occurring to the workers "in itinere", this means, when workers are traveling from their domiciles to the work place and vice versa, will not be considered for occupational risk declaration purposes.
The premium will increase or decrease in a proportion no greater than one percent with respect to the immediate preceding year, even though, that from the application of the formula, the premium has increased or decreased in a greater proportion.
The resulting premium will be the factor to be used for the Occupational Risk Insurance payment, according to the quotation base salary of each worker, and will prevail from March 1, 2006 to the last day of February 2007.
It is important to mention that the SSL, in its article 304-A, section XV, considers an infraction, not to file, to do it untimely, or to file with false or incomplete information, the annual premium declaration for occupational risks. These omissions could be sanctioned with a fine equivalent to the amount of twenty to two hundred and ten times the general minimum daily wage effective in Mexico City, that is to say, of $973.40 (Nine Hundred Seventy Three Pesos and Forty Cents) to $10,220.70 (Ten Thousand Two Hundred Twenty Pesos and Seventy Cents), in accordance with article 304-B, section III of the SSL.
* * * *
We trust the foregoing bulletin will be useful for our clients. If you should have any questions regarding the foregoing topic or any other matter, the members of the Sánchez-DeVanny Eseverri, S.C. Labor, Social Security and Immigration Practice will be readily available to assist you.
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.