(a) No (except in case of employment misclassification)
(b) No, the social security and income tax legislation set forth the specific rules applicable to contingent workers
(c) Same as (b)
(a) No. If employment elements are present, contingent workers could be considered as employees for employment purposes.
(b) If the elements of an employment relationship are not present, specific tax rules apply. As of 1 January 2022, misclassification of employees is considered tax fraud subject to criminal sanctions for the party classified as "employer." If the elements of an employment relationship are not present, the social security sets forth specific rules applicable to contingent workers (i.e., If the employment elements are present, contingent workers will be considered as subject to the mandatory social security regime in Mexico. If they are considered as contingent workers, the employees may voluntarily register in the "Voluntary Social Security Regime" in Mexico).
(c) Pensions are part of the Social Security Mexican System, therefore response (b) above applies.
2
As of 1 January 2022, a new provision was enacted in the Mexican Fiscal Code, which provides that simulating an independent professional relationship with an individual that should be classified as employee is considered tax fraud.
With the rise in digital platform services, we are seeing an increasing global trend in case law and legislation aimed at protecting platform workers' labor rights. For more insight on these developments, along with other employment law updates, click here.
As of 1 January 2022, the Mexican Tax Code provides that simulating an independent professional relationship with an individual that should be classified as employee is considered tax fraud.
There are also criminal sanctions in certain outsourcing schemes.
Yes, every officer of the company involved in the decision and execution of the conduct related to the misclassification of the employee will be criminally charged.
As of this date, moderate, but this may change with the new administration.
The worker will not to be covered by the Social Security Mandatory regime (no access to in-kind and in-cash benefits established in the Social Security Law including pensions).
The new administration has enacted more strategic labor inspections procedures and is applying new criteria in connection with misclassification.
Penalties for misclassification of employees have increased with the current administration.
The new administration has enacted more strategic audit procedures, has increased its activities on reviewing compliance by employers, and is applying new criteria in connection with the misclassification of employees.
Determination of misclassification of employees and sanctions for the above conduct may become more common as a result.