Possible changes regarding the Federal Maritime and Terrestrial Zone.

On April 21st, 2021, a legislative initiative was presented in the Senate of the Republic in order to reform the General Law of National Property (the “Law”). Such initiative will be sent to the House and will continue to be discussed. Nevertheless, taking into account its relevance, we consider it important to keep you informed.

The initiative proposes:

  1. The modification of the current delimitation of maritime beaches, as well as to enlarge maritime beaches by ten meters starting as of the place where the high tide occurs, that is, from where the Federal Maritime and Terrestrial Zone currently commences.
  2. To include as part of maritime beaches the sand, cliffs, rock formations, as well as any other surface or geological form that in virtue of the tide is covered or uncovered by the sea.
  3. To precise that maritime beaches will be of public use, with free access to it and to the sea always guaranteed, in any direction, without the possibility of requiring any type of payment to secure said access, to prohibit or block its way, or to be used as private property.
  4. The reduction of the surface of the Federal Maritime and Terrestrial Zone to ten meters of the width of land that is firm, walkable, and next to such maritime beaches, as well as of lakes, lagoons, estuaries, or natural deposits of seawater that communicates directly or indirectly with the sea. This, in order to avoid affecting current private property.
  5. The clarification of the concept of Federal Maritime and Terrestrial Zone since the Law currently uses the term “beaches” instead of “maritime beaches”, and
  6. A provision that respects the concessions granted prior to the reform of the Law, and provides that once the corresponding obligations end, the renewal of the concessions will be in accordance with the new regulations.

We will keep you informed of the events that continue to unfold regarding the initiative to reform the Law.

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Alejandro Pedrín   |   apedrin@tplegal.net
Héctor Torres-López   |   htorres@tplegal.net
Leobardo Tenorio-Malof   |   ltenorio@tplegal.net
Mauricio Tortolero   |   mtortolero@tplegal.net
Daniel Gancz-Kahan   |   dgancz@tplegal.net
Alejandro Ceballos   |   aceballos@tplegal.net
Elio Sánchez   |   ecsanchez@tplegal.net
Iván Curiel-Villaseñor   |   icuriel@tplegal.net
Raúl Escamilla-Sanromán   |   rsanroman@tplegal.net

 

Annual Corporate Compliance.

In accordance with Mexican law, there are several corporate obligations that all Mexican entities must comply with.

Hereunder please find a summary of the main ones:

I. Annual meeting of shareholders or partners.

In accordance with the Mexican General Law of Commercial Entities, shareholders or partners of a commercial entity are required to meet at least once a year, within the first four months of the year, in order to hold a meeting to approve the financial statements of the entity.

The deadline to hold the above-mentioned meeting is April 30th, 2021.

If your entity has not yet held such a meeting, please let us know if we may assist you.

II. Declaration of shareholders or partners abroad (out of Mexico) who elect not to be registered in the Mexican Taxpayers’ Registry (official form 96).

The Mexican Federal Tax Code states that within the first three months of the year Mexican entities shall file with tax authorities a notice providing the tax identification number, tax address, and tax residency of their non-Mexican shareholders/partners.

The deadline for filing the notice was March 30th, 2021.

If you have not yet complied with such obligation, please let us know if we may assist you.

III. National Registry of Foreign Investments (NRFI).

Mexican entities with foreign investment must file a notice with the NRFI if such fall in any of the following categories:

  1. Annual economic notice. In the event that the entity has a total amount equal to or greater to MXN$110’000,000.00 Pesos in any of the following accounts: total initial balance of assets, final balance of assets, total initial liabilities, final total liabilities, income (in Mexico and abroad), and/or expenses (in Mexico or abroad).
  2. Quarterly modification notices. In the event of modification of any of the following items of the entity: (i) the business name, (ii) the corporate name, (iii) the tax domicile, and (iv) the economic activity. Also, the following events, provided such result in operations for an amount greater to MXN$20,000,000.00 Pesos:
  • Capital increase or decrease;
  • Change to the structure of the partners/shareholders,
    and/or;
  • Variations in any of the following accounts: (i) account receivable from residents abroad who are part of the same corporate group, (ii)  accounts payable to residents abroad who are part of the same corporate group, and/or (iii) contributions for future increases in the capital stock of the entity, capital reserves, or resulting from previous tax years.

Should you have any questions relating to the above, please do not hesitate to contact us.

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Alejandro Pedrín   |   apedrin@tplegal.net
Héctor Torres-López   |   htorres@tplegal.net
Leobardo Tenorio-Malof   |   ltenorio@tplegal.net
Mauricio Tortolero   |   mtortolero@tplegal.net
Daniel Gancz-Kahan   |   dgancz@tplegal.net
Alejandro Ceballos   |   aceballos@tplegal.net
Elio Sánchez   |   ecsanchez@tplegal.net
Iván Curiel-Villaseñor   |   icuriel@tplegal.net
Raúl Escamilla-Sanromán   |   rsanroman@tplegal.net

 

 

LEGAL ALERT – Changes to Outsourcing.

On April 14, 2021, the Mexican Congress approved a bill that amends the rules regarding the outsourcing of personnel and employee profit-sharing. The amendment adds and amends several provisions and laws.

The amendment amends six different laws: the Federal Labor Law, the Social Security Law, the Housing Fund Law, the Federal Tax Code, the Federal Income Tax Law, and the Federal Value Added Tax Law.

IN SHORT:

The amendment:

  • Prohibits the subcontracting of personnel.
  • Allows subcontracting specialized services or execution of specialized work, provided that the service provider complies with rules to be published and secures a registry before the Labor and Employment Department (“Labor Department”).
  • Allows subcontracting of specialized services between entities that are part of the corporate group, also known as insourcing, provided that the service provider is registered with the Labor Department, and the applicable requirements and conditions.
  • Allows subcontracting of services of recruitment, selection, training, and professional development.
  • Limits or caps the amount that an employee will receive as profit sharing.
  • Conditions employer substitutions to the transfer of assets of the employer that is transferring the employees.
  • Establishes various fines and penalties.
  • Eliminates the fiscal effects (e.g. tax deduction, value-added tax credit) of the tax invoices related to subcontracting of personnel services.
  • Considers the simulation strategies for the subcontracting of personnel as organized crime.
WHAT ARE THE APPROVED SANCTIONS AND FINES?
  •  Fines ranging from 50 to 5000 times the UMAs (“Unidad de Medida y Actualización” or “Unit of Measurement and Update”), MX$89.22 per UMA for 2021), to those employers that refuse or obstruct subcontracting of personnel inspections and surveillance.
  • Fines ranging from 2,000 to 50,000 UMAs, to those who, in violation of the above, use or gain benefits through subcontracting of personnel, and to the companies that provide specialized services and operate without the corresponding registration.
  • Elimination of tax deduction and any tax credit for expenses related to the subcontracting or for those services that personnel is provided.
  • Using deceptive practices to provide specialized services or the execution of specialized works, or the subcontracting of personnel would result in tax fraud.

DEADLINES TO CONSIDER:

  • Once the Mexican Senate approves the bill, it will be sent to the President for his signature and publication, which is expected to be May 1, 2021.
  • Rules to be issued: 30 days. The Labor Department has to publish the rules for securing the registry for specialized services, including insourcing companies.
  • Registry: 3 months. As of the date in which the rules for the registry are published, the specialized services and insourcing companies have to obtain the registry before the Labor Department.
  • Immediately within the following 3 months as of the amendment is published in the Federal Gazette, to carry out the employer substitution without having to transfer the assets of the company that will transfer the employees.

WHAT DO WE HAVE TO REVIEW IN OUR OPERATIONS?

  • For those companies of the same corporate group, review the operations between them to determine if it is necessary to carry out a restructuring of the corporate operation and organization.
  • Analyze and review outsourcing agreements to determine the actions that need to be taken.
  • Analyze the insourcing services to confirm if they comply with the requirements and conditions and implement the corresponding registry.
  • Analyze the contracts for specialized services or works and ensure they do not consist of activities related to their corporate purpose or economic activity.
  • Surveillance and ensure that the specialized services and works companies, comply with the registry, and meet the new requirements that the Labor Department will issue. Also, they must comply with the new labor, social security, and tax obligations.

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For any questions or comments, please do not hesitate to contact us.

Alejandro Pedrín   |   apedrin@tplegal.net
Héctor Torres-López   |   htorres@tplegal.net
Leobardo Tenorio-Malof   |   ltenorio@tplegal.net
Mauricio Tortolero   |   mtortolero@tplegal.net
Daniel Gancz-Kahan   |   dgancz@tplegal.net
Alejandro Ceballos   |   aceballos@tplegal.net
Elio Sánchez   |   ecsanchez@tplegal.net
Iván Curiel-Villaseñor   |   icuriel@tplegal.net
Raúl Escamilla-Sanromán   |   rsanroman@tplegal.net

Suspension of the Importer’s Registry.

There are more than 35 causes for the suspension of a company’s importer registry and that the Tax Administration Service (“SAT”) makes effective when a taxpayer falls on one of such causes.

One must consider that any suspension of the importer’s registry may last for more than one month. That is, a taxpayer that suffers the suspension of its importer’s registry, will not be able to carry out importations during the suspension.

What are the most common causes for suspension?

In our experience the most common causes that the SAT uses to suspend the registry are the following:

  • Failure to file federal taxes, or failure to comply with other tax obligations.
  • The taxpayer is not located in its tax domicile, or when the registered tax domicile does not meet the requirements provided in the Federal Fiscal Code.
  • Failure to comply with the requests from the tax or customs authorities to present the documentation and information that proves the compliance of the tax or customs obligations, or when such filing is not complete.
  • When the legal representative, partner, or shareholder is a member of a company or is a natural person that has been suspended and such company has not been reinstated.
  • When IMMEX companies do not have the necessary infrastructure to carry out the maquila operations of the temporarily imported merchandise.

What do I need to do if our importer’s registry is suspended?

It is important to verify the reason causing the suspension of the importer’s registry. If the taxpayer cannot prove that the reason causing such suspension has been resolved, the suspension will not be lifted.

Once the taxpayer proves that the reason causing such suspension has been resolved, the procedure established in the foreign trade rules must be followed in order to nullify the suspension of the importers’ registry.  This process is performed on the webpage of the SAT.

In addition, it is extremely important to follow the process established by the SAT in order to avoid delays in reactivation.

How much time does the SAT have to cancel the suspension?

SAT has 30 days to reinstate taxpayers in the importer’s registry.

Is there anything that can be done to speed up the reinstatement process?

Evaluate the commencement of a “conclusive agreement” with the Taxpayers’ Ombudsman. This is since the SAT has the obligation to respond to the request of information carried out by such Ombudsman.

If your company’s importer’s registry has been suspended, we can certainly carry out actions in order to assist you.

For any questions or comments, please do not hesitate to contact us.

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Alejandro Pedrín   |   apedrin@tplegal.net
Héctor Torres-López   |   htorres@tplegal.net
Leobardo Tenorio-Malof   |   ltenorio@tplegal.net
Mauricio Tortolero   |   mtortolero@tplegal.net
Daniel Gancz-Kahan   |   dgancz@tplegal.net
Alejandro Ceballos   |   aceballos@tplegal.net
Elio Sánchez   |   ecsanchez@tplegal.net
Iván Curiel-Villaseñor   |   icuriel@tplegal.net
Raúl Escamilla-Sanromán   |   rsanroman@tplegal.net

Excessive Charges in the Water Supply Bill.

Previously, TP Legal informed its clients of a recurring problem relating to various actions and/or “persuasive” collection efforts that are being carried out by the Water Company in all the municipalities of the State of Baja California (Tijuana-CESPT, Ensenada-CESPE, Mexicali-CESPM and Tecate-CESPTE), for alleged debts of connection fees to the water and sewage systems, or for consumption not accounted for in the consumers monthly water bill.

The manner in which such utility company has been operating consists of the issuance of a “summons” to the users of the water and drainage services, in which the consumer is urged to show up at the facilities of the water commission in order to be informed of the alleged debt and the consumer is provided an “estimate” of the amount that is owed, same that does not include the information required by law in tax/administrative procedures.

Since it has come to our attention that the utility company has recently increased its efforts to charge consumers, we would like to remind you that there are legal actions that may be carried out to challenge such actions.

TP Legal has provided legal advice and representation to the clients that have not agreed with the charge/payment demanded by the utility company, seeking legal alternatives to secure a proper defense to avoid extreme consequences such as the closure of their establishments or the suspension of the supply of the water and drainage services.

Furthermore, in TP Legal we have been able to secure constitutional protection resolutions (“amparos”) in favor of our clients. This, in order that the same may continue to enjoy water and drainage services and to challenge the alleged debts through administrative claims filed with the corresponding Courts.

If you require any assistance, or if you have any questions or comments regarding the above, please do not hesitate to contact us. 

Alejandro Pedrín   |   apedrin@tplegal.net
Héctor Torres-López   |   htorres@tplegal.net
Leobardo Tenorio-Malof   |   ltenorio@tplegal.net
Mauricio Tortolero   |   mtortolero@tplegal.net
Daniel Gancz-Kahan   |   dgancz@tplegal.net
Alejandro Ceballos   |   aceballos@tplegal.net
Elio Sánchez   |   ecsanchez@tplegal.net
Iván Curiel-Villaseñor   |   icuriel@tplegal.net
Raúl Escamilla-Sanromán   |   rsanroman@tplegal.net

Reportable Schemes.

As of this year, taxpayers have the obligation to disclose “reportable schemes” to the Tax Administration Service (“SAT”) by which a tax benefit is or has been obtained in Mexico.

In summary:

  • The deadline for disclosing the reportable schemes is February 15, 2021.
  • A review of 2020 operations must be done to determine if they should be disclosed.
  • In our opinion, the maquila industry, in principle, has no obligations to disclose, however, SAT has a different opinion, thus it expects maquiladoras to disclose.

What is a reportable scheme?
Any plan, project, proposal, advice, instruction, or recommendation expressed or implied with the purpose of materializing a series of legal acts that generate, directly or indirectly, the obtaining of a tax benefit in Mexico.

Who are the parties required to disclose Reportable Schemes?
As a rule, the “tax advisor” that falls within the definition under the Federal Fiscal Code and taxpayers are the ones who must report.

Is there an obligation for the Taxpayer to disclose?
Yes.

Taxpayers have the obligation to disclose when (i) the tax advisor does not comply with the obligation to disclose; (ii) when it agrees with the tax advisor that it will be the taxpayer who discloses; (iii) that is advised by someone that is not considered a tax advisor or; (iv) when the taxpayer is the one who prepared the scheme.

What are the reportable schemes?
These are examples of reportable schemes:

  • Foreign authorities are prevented from exchanging tax or financial information with Mexican authorities.
  • There is a transfer of tax losses to a taxpayer different from the one that it generated them.
  • Exists payments or interconnected operations, which return the amount paid to the person who made it, to any of its partners, shareholders, or related party.
  • There are related party transactions, such as a) Exchange of intangibles assets that are difficult to be valued; b) business restructurings; c) services are provided and/or the temporary use or enjoyment of goods and rights is granted, without financial retribution.
  • When actions to avoid a permanent establishment in Mexico are taken.
  • Avoiding the identification of the beneficial owner of income or assets.
  • When profits are generated to absorbed tax losses when the amortization term is about to decrease.
  • Avoiding the application of dividend rates is avoided.
  • When the lessee grants the use or enjoyment of the asset to the lessor or a related party of the lessor.

When does the disclosure to reportable schemes have to be disclosed and/or filed?

Advisors: 30 business days following the day on which the first contact for marketing is made.

Taxpayer: 30 business days following the day on which the scheme is available to the taxpayer for its implementation, or the first event or legal act that is part of the scheme is performed.

February 15, 2021: If the reportable scheme was generated in the fiscal year 2020 (or even earlier, but its tax effects are constant and in force for the taxpayer).

Are the fines if we fail to disclose?
Yes, from 50% to 75% of the amount of the tax benefit of the reportable scheme or up to 2 million pesos when the scheme is not disclosed.

Given the variety of schemes or that may exist in each taxpayer, in case you have doubts regarding the disclosure of the scheme, in TP Legal we have specialized personnel that can provide tax advice regarding this type of obligation.

 

Contact us.

Alejandro Pedrín   |   apedrin@tplegal.net
Héctor Torres-López   |   htorres@tplegal.net
Leobardo Tenorio-Malof   |   ltenorio@tplegal.net
Mauricio Tortolero   |   mtortolero@tplegal.net
Daniel Gancz-Kahan   |   dgancz@tplegal.net
Alejandro Ceballos   |   aceballos@tplegal.net
Elio Sánchez   |   ecsanchez@tplegal.net
Iván Curiel-Villaseñor   |   icuriel@tplegal.net
Raúl Escamilla-Sanromán   |   rsanroman@tplegal.net

Vaccination vs COVID-19 At Work Establishments

In December 2020, Mexico’s Federal Government announced the purchase of COVID-19 vaccines for all the national population and that it will initiate its National Vaccination Policy (the “Vaccination Policy”), which will be implemented in various stages, considering the degree of vulnerability, starting in December 2020, and concluding in March 2022.  No-one will be obligated to be vaccinated.

On  January 25, 2021, the Federal Government published an “Executive Order which purpose is to establish, as an extraordinary action on general health matters, that the governments of the States of Mexico, in their capacity of sanitary authorities, as well as individuals and companies of the social and private sections, that form part of the National Health System, will assist with the Mexican Ministry of Health in the implementation of the National Policy for vaccination against the SARS-CoV-2 virus for the prevention of COVID-19 in Mexico” (the “Executive Order”).

From our review of the draft of the Executive Order, we interpret that companies that decide to acquire the vaccine against the COVID-19 virus for its application to their employees at their work establishments must acquire the vaccine from individuals and entities of the social and private sectors that form part of the National Health System.

In addition, the legal implications for the purchase and application of the vaccines must be considered.

I. Executive Order

The Executive Order establishes that the States of Mexico in their capacity as sanitary authorities, as well as the individuals and entities of the social and private sectors that form part of the National Health System, must perform the following before the Mexican Ministry of Health:

  • Submit to the Mexican Ministry of Health the agreements executed with the pharmaceutical companies authorized in Mexico to acquire the vaccine.
  • Inform the Mexican Ministry of Health of the number of vaccines they will apply.
  • Respect the vaccination calendar and the priority groups established in the Vaccination Policy.
  • Implement preventive and sanitary control measures.
  • Guarantee, within their scope of competence, the traceability of the vaccination process and inform the Mexican Ministry of Health of the same.

II. Legal aspects

Due to the great demand for the vaccine, we consider that there is a high risk of being offered vaccines by entities or individuals that are not authorized to distribute the vaccine or of vaccines that do not comply with the required quality and health standards. Therefore, it is of utmost importance that the vaccine is acquired from an authorized distributor who can evidence that it has access to the vaccine as well as the permits and licenses required for the importation and commercialization of the vaccine in Mexico.

In addition to the foregoing, it is important to implement a plan for the application of the vaccine as well as for the mitigation of any secondary effects of the vaccine. Companies must be careful in their internal vaccination strategies to reduce any potential risks as well as labor and civil law contingencies.

Derived from information issued by the World Health Organization, it is known that in many countries there continues to be a certain degree of mistrust with respect to the effects of the vaccine and Mexico is no exception to said mistrust. Therefore, companies that pretend to apply the vaccine to their employees must prepare to deal with situations of this nature.

III. Labor Aspects.

The Federal Labor Law does not expressly require an employee to get a vaccine against a contagious disease. Neither provides that an employee’s rejection to be vaccinated constitutes a cause that justifies the termination of a labor relationship.

Aside from the fact that companies can argument that because of sanitary measures for prevention, a vaccine is obligatory for its employees because it aims to protect the health of all its employees, their work stability, and the work source, in principle, is advisable that companies first inform their employees about the vaccine and obtain their prior consent prior to applying the vaccine at the place of work.

Additionally, it must be considered that the application of a vaccine at the place of work could implicate a civil liability for the company in the event the effects of the vaccine are harmful to the health of the employee, therefore, in the event an employee decides to get the vaccine, said employee must release the company from any liability derived therefrom.

Key aspects for companies:

  • Promptly review the process for the acquisition of the vaccine and the background of its supplier as well as documenting the acquisition and application of the vaccine by means of an agreement in writing, in accordance with the guidelines established by the Federal Government.
  • Analyze the strategy for the application of the vaccine at the place of work as well as the implications of performing voluntary and/or compulsory processes for vaccination.
  • Obtain the consent of the employees that decide to get the vaccine, as well as a release of liability in favor of the company, in writing.
  • Verify the sanitary measures for the application of the vaccine in the place of work.
  • Analyze the hiring procedures to avoid discriminatory practices related to the exclusion of job candidates because they are not vaccinated against COVID-19.

For any questions or comments, please do not hesitate to contact us. 

Alejandro Pedrín   |   apedrin@tplegal.net
Héctor Torres-López   |   htorres@tplegal.net
Leobardo Tenorio-Malof   |   ltenorio@tplegal.net
Mauricio Tortolero   |   mtortolero@tplegal.net
Daniel Gancz-Kahan   |   dgancz@tplegal.net
Alejandro Ceballos   |   aceballos@tplegal.net
Elio Sánchez   |   ecsanchez@tplegal.net
Iván Curiel-Villaseñor   |   icuriel@tplegal.net
Raúl Escamilla-Sanromán   |   rsanroman@tplegal.net

The Mexican Social Security Institute implements the strategy to consider the contagion of Covid-19 by employees as a “work /occupational risk.”

On January 8, 2021, the “Agreement of the Technical Council of the Mexican Social Security Institute ACDO.AS2.HCT.151220 /340.P.DPES” was published in the Federal Official Gazette. In it, the Directorate of Economic and Social Benefits of the Mexican Social Security Institute (“IMSS”) is authorized to implement a proactive ruling strategy for the treatment of COVID-19.

The above, based on the Federal Executive Order that declares extraordinary actions in general health matters to combat COVID-19, as well as the declaration of health emergency issued by the Mexican General Health Council.

The strategy will allow to consider as a “work/occupational risk”, any event of infection or death by any employee, or any effects of illness, caused by COVID-19 (work/occupational disease), during the period of the health emergency. This will apply until the health emergency ends.

This has several labor/tax implications for both the employees and employers. For employers, it could “affect” the social security premium, and, even, increase premium paid in the previous year by up to 1%.

IMSS should soon announce the details of the “proactive ruling strategy”, which shall include the procedure/actions to be followed by IMSS.

We recommend that, until then, companies document in advance any of their COVID-19 cases (and the consequences that may derive from the same), since this, most likely, will be classified as “work/occupational risk”, and not a “common/  general illness”.

If they are considered “work/occupational risks”, we will need to analyze the appropriate legal actions that may be taken.

Key points to be considered by companies:

  • Identify and properly document cases of employees infected by COVID-19 as of the declaration of the health emergency in Mexico.
  • Document the implementation of sanitary measures in the workspace ordered by Mexico’s Federal Government.
  • Be on alert of any action rated by IMSS as a “work / occupational risks”, deriving from any cases of infection of COVID-19, and, where appropriate, evaluate its legal challenge.

For any questions or comments, please do not hesitate to contact us. 

Alejandro Pedrín   |   apedrin@tplegal.net
Héctor Torres-López   |   htorres@tplegal.net
Leobardo Tenorio-Malof   |   ltenorio@tplegal.net
Mauricio Tortolero   |   mtortolero@tplegal.net
Daniel Gancz-Kahan   |   dgancz@tplegal.net
Alejandro Ceballos   |   aceballos@tplegal.net
Elio Sánchez   |   ecsanchez@tplegal.net
Iván Curiel-Villaseñor   |   icuriel@tplegal.net
Raúl Escamilla-Sanromán   |   rsanroman@tplegal.net

Increase of the Minimum Wage in 2021.

Starting on January 1st, 2021, the general minimum wage in Mexico will increase as follows:
  1. From $123.22 pesos per day to $141.70 pesos per day in the entire country except for the free zone located on the northern border of the country, and
  2. From $185.56 pesos per day to $213.39 pesos per day in the free zone located on the northern border of the country.
The free zone in the northern border of the country includes all the cities located in a strip of land of 25 kilometers of the border with the United States of America.
It is important to note, that the minimum wage for professionals will increase by 15%, 21.8%, 25%, and 30%, depending on the profession or activity. In addition to the above, deriving from the salary increase, the social cost of the operations of the companies will increase. Some of the concepts that will increase are:

a)    Labor indexed premiums or bonuses.
b)    Social Security premium.
c)    Housing premium.
d)    Savings funds.
e)    Employment benefits, and
f)    Ordinary or extraordinary labor unions premiums or fees.

It is very important that employers are aware that the reduction of the salary to an employee or the unilateral elimination of the labor benefits, is prohibited by the Federal Labor Law. Employers should be cautious with the strategies that may be implemented to impact the minimum wage increase, due to the fact that such strategies may result in labor rescission claims, labor inspections, or fines that could generate significant costs to the employers.
Our labor law specialists will be glad to assist you and answer any questions that you may have relating to this matter or any other legal aspect that may have any implications for your company or organization.

We remain at your service.

Alejandro Pedrín   |   apedrin@tplegal.net
Héctor Torres-López   |   htorres@tplegal.net
Leobardo Tenorio-Malof   |   ltenorio@tplegal.net
Mauricio Tortolero   |   mtortolero@tplegal.net
Daniel Gancz-Kahan   |   dgancz@tplegal.net
Alejandro Ceballos   |   aceballos@tplegal.net
Elio Sánchez   |   ecsanchez@tplegal.net
Iván Curiel-Villaseñor   |   icuriel@tplegal.net
Raúl Escamilla-Sanromán   |   rsanroman@tplegal.net

Amendment to the Labor Law regarding Teleworking.

On December 9, 2020, the Mexican Senate approved an initiative that amends various articles of the Federal Labor Law in order to introduce “home-office”, including Article 311, and adds Chapter XII BIS to the Federal Labor Law to introduce “teleworking”.

It is important to note that, in principle, such amendments do not necessarily apply to the employees that are currently doing “home office” due to the sanitary emergency caused by COVID-19. Thus, it is necessary to analyze the amendment on a case-by-case basis.

The amendment states that:

  • “Teleworking” is the performance of labor activities in places other than the employer’s facilities using information and communication technologies.
  • Occasional or sporadic teleworking is not considered “teleworking”.
  • “Teleworking” will only be considered as such, when the activities performed by the employee in his/her address (or in places other than the employer’s establishment), represents more than 40% of his/her time.
  • An employee may change to “teleworking” provided that such change is agreed by both parties in writing (except when force majeure is accredited).
  • Any employee that changes to “teleworking” will have the right to return to an in-person modality, in accordance with the terms that the parties agree upon.
  •  The “Teleworking” agreement will need to be in writing and include, among others, the type of work, the equipment, and supplies to be provided to the employee, salary, mechanisms for communication and supervision, and the limits of the work-shift.

It is important to note that the amendment does not establish the procedure, as well as how the proportion of the costs of the internet and electric services that will be reimbursed to the employee will be calculated.

The above-mentioned initiative has been approved by the Chamber of Deputies; therefore, it has been sent to the President for his approval and publication in the Federal Official Gazette (“DOF”) in order that it comes into effect the next day of such publication.

Key points for companies:

  1. Carefully analyze the current labor relationships of the company, taking into consideration the pandemic, and determine if such labor relationships should be regulated under “Teleworking”, or if the regular general working conditions should continue to apply.
  2. Analyze the tax impact and the mechanism for the payment of the costs and supplies regarding the provision of the services.
  3. The rules of “teleworking” must be included in the Collective Bargaining Agreements and the Internal Shop Rules.
  4. Development of policies for supervision and training, for the security of information security and management and protection of personal data and employee privacy.
  5. Expect the issuance of the publication of the Mexican Official Norm (“Norma Oficial Mexicana”). Within the 18 months following the entry into force of the reform, such Norm will provide the special conditions of safety and health at work that includes the special risks in the modality of teleworking (such as ergonomic, psychosocial, and other factors that could cause adverse effects to the life, physical integrity or health of the employees).

For any questions or comments, please do not hesitate to contact us.

Alejandro Pedrín   |   apedrin@tplegal.net
Héctor Torres-López   |   htorres@tplegal.net
Leobardo Tenorio-Malof   |   ltenorio@tplegal.net
Mauricio Tortolero   |   mtortolero@tplegal.net
Daniel Gancz-Kahan   |   dgancz@tplegal.net
Alejandro Ceballos   |   aceballos@tplegal.net
Elio Sánchez   |   ecsanchez@tplegal.net
Iván Curiel-Villaseñor   |   icuriel@tplegal.net
Raúl Escamilla-Sanromán   |   rsanroman@tplegal.net

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