By – Lic. Alejandro Pedrin.
The Federal Labor Law (“FLL”) sets forth the obligation, terms, and conditions for the annual payment of workers´ profit sharing by the company to employees (“PTU”). Employers are required to comply with this obligation no later than May 30, if the employer is a corporate entity, or June 29, if the employer is an individual.
The main obligation of the employer is to distribute 10% of the tax profit generated during the fiscal year (if generated) among its employees, taking into account the time actually worked and the salary paid to the employees in terms of the FLL.
After May 30, or June 29, as applicable, the Ministry of Labor and Social Welfare, through the Labor Attorney’s Office (the “Labor Authority”), as part of its verification duties, performs labor inspections on employers in order to verify the compliance with their obligations of payment of PTU. Inspections may be random or extraordinary, especially upon receiving claims of employers who have not complied with the payment of the PTU.
The employer is obligated to provide the Labor Authority with all of the documentation that may be requested in the corresponding inspection order. This is in order to verify the proper determination of the profit sharing to employees.
In the event that the Labor Authority finds any lack of compliance by the employer with regard to the PTU, and/or if the employer does not have the documents that prove such compliance, the Labor Authority may impose fines that range from 50 to 5,000 days, time the value of the Measure Unit (up to $377,459.00 pesos) for labor violation and per employee. Additionally, the employee has a term of one year within which to demand the payment of any PTU amount that was not received or that was only partially paid or paid in an incorrect manner.
It is important for employers to bear in mind that in the event of receiving an inspection visit, the labor inspector may request from the employer, the information, and documents that prove the payment of the PTU, including among other documents, the following:
- A complete list of employees, containing categories (union or trust, temporary or permanent), days actually worked, and salaries earned during the year subject matter of the review.
- Tax return for the fiscal year.
- Receipt of acknowledgment of employees having received such annual tax returns.
- Letter of formation of the mixed commission in charge of the profit sharing.
- Profit sharing project.
- Benefit payment receipts.
In the event that you would like to receive further information relating to the terms and conditions that employers are required to comply with regarding the payment of PTU, or, on the most effective manner in which a labor inspection should be carried out, please contact the partner responsible for your matters, or one of the lawyers mentioned below:
Leobardo Tenorio-Malof | email@example.com
Héctor Torres-López | firstname.lastname@example.org
Alejandro Pedrín | email@example.com
Mauricio Tortolero | firstname.lastname@example.org
Daniel Gancz-Kahan | email@example.com