Labor Inspections Related with Outsourcing

Dear Clients and Friends,

We have observed increased oversight by federal and state authorities regarding compliance with labor and social security regulations.

In this year 2020, special emphasis has been placed over labor inspections regarding personnel outsourcing of own or third party (companies of the same Group -insourcing- or of third parties -outsourcing-).

We suggest taking preventive measures to have all elements and information needed to successfully deal with these inspections, since they take into account labour, tax and corporate aspects.

To successfully face an inspection like the above mentioned, we recommend our clients:

• To have your outsourcing contracts up to date, whether they are insourcing or outsourcing.
• To have evidence, in addition to the contract, that proves that the outsourcing services were indeed provided, demonstrating the circumstances of manner, time and place of such services.
• Comply with the requirements of Article 15-A of the Federal Labor Law (LFT for its acronym in Spanish), namely: i) the outsourcing does not cover the same or similar activities that are carried out in the work center, ii) it is of a specialized nature, and iii) it does not include tasks that are the same or similar to those carried out by the rest of the workers.
• Verify and establish, at the time of signing the contract and on a permanent basis, that the contractor has the economic means to meet its labour obligations and that it complies with them.
• That your managers know the legal grounds for labour inspections, the obligations that you as an employer must observe, as well as the rights that you have when you receive a labour inspection.

In accordance with the LFT and the General Regulations on Labor Inspection and the Application of Sanctions, the labor authorities are authorized to impose sanctions ranging from 50 to 5,000 units of measurement (UMA), that is from approximately $4,200 to $420,000 Mexican pesos, for each obligation not fulfilled.

If you have any questions regarding the above, don’t hesitate to contact us.