In order to comply with the outsourcing reform in Mexico, companies must carry out a thorough validation through REPSE. Here are the keys to success.
The outsourcing reform in Mexico seeks to eliminate tax evasion and ensure that companies comply with their employer obligations. As of its implementation, they will only be able to hire specialized labor. While the companies providing the services must be registered, contractors and service providers are jointly and severally liable.
In this article, we tell you how to adapt to the norm and be able to carry out the exhaustive control in a simple and effective way. Read to the end and access valuable information to achieve it.
Outsourcing reform and the creation of REPSE
In September of this year, the reform of the law that regulates outsourcing and subcontracting came into force. Although eight laws were modified, most of the changes were focused on labor law.
Outsourcing is a labor scheme under which a company outsources the contracting of services to another firm.
17% of the people employed in Mexico
in Mexico work under outsourcing.
Source: Censos Económicos del Instituto Nacional de Estadística y Geografía (Inegi) 2019
It is important to highlight that this reform aims to eliminate bad practices associated with this scheme. Such as example, tax evasion and non-compliance of companies’ obligations to their workers.
In this context, large companies must completely change their structure, since up to now they “did not have employees” but rather these were within small firms.
Therefore, the axis of this reform is to prohibit the outsourcing of personnel, both in outsourcing and insourcing schemes. In other words, it will not be possible to hire a third party or create an internal company that will be in charge of the payment and management of personnel. Except for specialized services.
This is where the Registro de Prestadoras de Servicios Especializados u Obras especializadas (REPSE) arises, where contractors must be listed.
How do the outsourcing reform and the REPSE impact companies?
The new law contemplates several changes in tax matters. However, there are 4 central aspects that will modify the dynamics of companies with respect to this type of contracting.
They will only be able to hire specialized labor: That is to say, it is allowed to employ workers for specialized activities within the company’s premises, such as, for example, for cleaning or security of the offices. However, these tasks cannot be within the corporate purpose or the main economic activity of the company.
Specialized service providers must be listed in the REPSE: As of the reform, service providers must be registered in the Registro de Prestadoras de Servicios Especializados u Obras especializadas (REPSE) of the Secretaría de Trabajo y Previsión Social (STPS). This permit is renewable every 3 years.
At the same time, the REPSE is a public registry and is available for consultation on the internet.
There were more than 900 companies engaged in labor outsourcing, and barely 100 were registered with the Instituto Mexicano del Seguro Social (IMSS).
Source: World Employment Confederation (WEC) 2019.
The contracting company and its provider are jointly and severally liable: It is important to note that only firms that provide specialized services and have no debts with the IMSS, Infonavit, or SAT can register with the REPSE. However, in the event that they do not comply with their obligations, the contracting company is jointly and severally liable and subject to costly fines.
Companies must submit frequent reports to Infonavit: Companies must submit a report every four months. The report will document compliance with employer obligations, data on contracts entered into with other companies, employee information, and base salaries.
What are the challenges posed by REPSE?
To avoid fines of up to MX$4.434 million, both providers and contractors of specialized services must maintain exhaustive control.
Therefore, the key to adapting to the norm will be in technology. With the right software, such as Coldview REPSE, you will prevent errors and omissions by organizing and controlling the information.
Here are some of the challenges presented by the reform and what solutions you can implement.
Compliance control: If you are the contractor, you will be able to control that your specialized service providers are authorized and comply with their obligations. If you are a supplier, you will be able to quickly and efficiently provide the documents that certify your registration and compliance. In both cases, you will have the certainty that your obligations are up to date, which will help to maintain a relationship on good terms.
Avoid fines: Whether you are a contractor or a provider, the amount of documentation to manage and control is enormous. Therefore, it is vital to have a centralized repository that allows you to have a comprehensive view of the information. This avoids errors or omissions that can result in large financial losses.
Achieve adequate contracts: Keep a detailed record of each contract in order to comply with Infonavit’s four-monthly report request and obtain information on:
- what activities you are delegating (and that do not coincide with the main economic activity of our company),
- how many workers will cover those functions,
- if the employer’s obligations are being complied with,
- the validity of the contract, etc.
For this reason, having a technological solution that systematizes the exhaustive validation will help us to know if we are collaborating with the right suppliers. Giving us security and stability in the commercial relationship between both parties, while complying with regulations and avoiding fines.
This new legal framework challenges companies to adapt the way they hire their human resources and avoid penalties. Therefore, it is clear that the companies that face the change through digital transformation will be the best positioned.
Would you like to know how Coldview can help your organization in this process? Write us and we will tell you.
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