Guidelines for the planned labour law outsourcing reform in Mexico

published on 12 April 2021 | reading time approx. 1 minute

On April 4, 2021, the Mexican private, public and labor union sector finally agreed on common guidelines for the planned labor law outsourcing reform.

The guidelines are:

1. Prohibit outsourcing regimes unless such activities do not relate to the core business of the contracting company. For instance, cleaning, catering, valet parking outsourcing companies will still be allowed to operate;
2. Contracting companies shall be jointly liable in case that contractors fail to comply with their social security and tax obligations;
3. Outsourcing companies will be required to register their activities before the Ministry of Labor and Social Welfare;
4. The Employee's Profit Sharing (or PTU in Spanish) shall be limited to up to 3 months of the employee's salary or the average of the PTU received during the last 3 years;
5. Transition period of three month

The Mexican Congress will now discuss these guidelines and needs to convert them into law. Therefore, they are neither binding nor definitive and still subject to changes. Governing party MORENA wants to have Congress approve on fast track. Currently they envision May 1, 2021 for the provision to become effective.