Legal labor compliance in Mexico

Jul 18, 2022 | Business legality | 0 Comentarios

Labor compliance in Mexico is the function of a company to foresee and manage the risks associated with the violation of labor rights in the company. These risks can be prevented if the company is aware of its rights and obligations, and is able to comply with codes of conduct, regulations and laws in the area.

Labor compliance addresses two main axes in the labor area;

  1. Giving a good image to suppliers, customers and internal members of the company.
  2. Avoid criminal and administrative penalties.


Do you know who is in charge of ensuring that these actions are complied to avoid risks?

The person in charge of ensuring compliance with administrative rules and the image of the public within an organization is called compliance officer, who also ensures compliance with professional and social objectives and good behavior, carrying out continuous improvement processes.

Do you know which regulations your company must comply?

Mainly the legal ones, especially those that apply to all companies in the country, related to tax returns, operations reports, among others, and those specific to your line of business. There is a Guide for a comprehensive compliance review, in which you can find out which elements apply to each case.


Mexican Social Security (IMSS)

IMSS is a health institution of the Mexican government, founded in 1943 and with the number one position in the care of Mexicans since its foundation.
To provide its service it combines research and medical practice, administers the resources of its affiliates for the retirement plan of the workers. Benefits for employees:

  •  Medical, hospital, pharmaceutical and rehabilitation care for workers and their families.
  •  Retirement savings.
  •  Childcare for the care of their children.
  •  Social benefits (recreational activities and vacation centers).
  •  Pensions in case of disability or death.

The obligations that the employer or owner has with its workers and the IMSS, is mainly the access to the system when an employment relationship is created.


Retirement Savings System (SAR)

Do you know what SAR means? It is the Retirement Savings System, a benefit and bonus in addition to the salary established by the company since its implementation in 1992.

The SAR is intended to promote long-term savings for workers to build a stable future for retirement. Contributions are mandatory and made by employers to retirement institutions.

Here are the institutions involved in the savings system and a brief description:

CONSAR: Looks after long-term savings funds for workers.

CONDUSEF: Protects workers’ financial rights in different institutions.

AFORE: Manages the retirement fund.

INFONAVIT: An entity with jurisdiction to grant loans.

National SAR database: Database containing information on workers’ savings.

SAR database operating company: Company in charge of managing and executing the SAR database.

Insurance companies: Delegated to pay the life annuity pension to employees.


Mexican Tax Authority (SAT)

SAT is the Tax Administration Service, it is independent from the Mexican Ministry of Finance and Public Credit, however, it has tax powers and is responsible for enforcing tax and customs legislation.

One of SAT’s purposes is to ensure that individuals and corporations pay taxes fairly. Another of its objectives is to manage the collection of federal taxes and control the import and export of merchandise to avoid penalties and fines. Employee benefits and obligations:

  •  Registration in the Federal Taxpayers Registry (RFC).
  •  Registration of a company in Mexico.
  •  Registration as an individual.
  •  Processing of tax returns, payments and guarantees.
  •  Electronic purse for deductible benefits.

Compliance with labor laws also contributes to employee retention, as employees feel secure in the company and severance costs are avoided.

A lot of processes, right? Leave it to an expert and forget about the paperwork!

We help you!
Our labor legal service is in charge of complying with all the requirements requested by the regulations regarding your compliance as a company. Registrations in public entities, such as: IMSS, SAT, SAR, we take care of your paperwork.
Contact us here.



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