Mexico: enforcement of the law on the responsibility of the contractor in terms of social charges

The reform of the Social Security Act was created to give the Mexican government more legal tools to regulate outsourcing, especially to control and punish subcontracting businesses trying to avoid employers’ contributions. The initiative was launched in March 2008 and was finally unanimously approved by the Congress of MPs. When the project was being evaluated, lawmakers said that, each year, outsourcing businesses “save” around six billion pesos (€320 million) in social contributions. The income of the social security (Instituto mexicano del seguro social – IMSS) coming from social contributions are dropping at a rhythm of 6.4% annually. Amendments to the law entered into force on July 10.