1 Outsourcing in Mexico: Best Practices
By Monica Schiaffino and Philip Berkowitz
5 A New Brazilian Commercial Code and
Its Effects on Brazilian Corporate Law
By Paulo Coelho da Rocha
a special supplement to ACC Docket
sponsored by Littler Mendelson, P.C.
Outsourcing in Mexico: Best Practices
By Monica Schiaffino ( mschiaffino@littler.com), Littler, Mexico,
and Philip Berkowitz ( pberkowitz@littler.com), Littler, United States
Corporations engaging staffing
companies in Mexico must be careful
that they are not considered to be the
employer of the staffing company’s
(hereinafter “Contractor’s”) employees.
Recent changes to the Mexico Federal
Labor Law (FLL), and in particular to
Article 15-A of the FLL, regarding the
practice of outsourcing, increase this
risk. One of the main risks of Article
15-A is, if the beneficiary of the services (i.e., the company retaining the
Contractor) is considered an employer,
labor authorities may then determine
that the company needs to pay profit
sharing (at 10 percent of pre-tax earnings) to the Contractor’s employees.
Reforms to Mexico Social Security Law
On July 9, 2009, reform bills to Mexico’s Social Security Law (SSL) were enacted into law. The purpose of the SSL,
as amended, is to regulate outsourcing
and establish legal mechanisms that
strengthen the Social Security Institute’s (SSI) revision authority.
These reform bills mainly establish
joint and several liability for those
companies receiving personnel services
from Contractors through the execution of a services agreement.
According to the SSL, as amended,
the beneficiary of the services (
hereinafter “Company”) shall assume the
obligations set forth in the reform bills
if the following requirements are met:
• The Company gives instructions to
the Contractor’s employees;
• The Contractor’s employees work at the
facilities determined by the Company;
• The Contractor fails to fulfill the obli-
gations established in the SSL; and
• If the SSI has previously ordered the
Contractor to fulfill omitted obliga-
tions, it fails to meet these require-
ments; and the SSI issues a notice to
the Company regarding such order
and omission.
The SSI imposes some formal obligations on the Company as beneficiary of
services, including the filing of a quarterly
SAVE THE DATE
July/Aug. 2014 Latin American Briefings
Drafts due by April 25th