An agreement on PTU is reached: it will be capped at three months of salary

Note published on March 22 in El Contribuyente, Noticias [News] Section, by Diego Coto.
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The new agreement establishes that Employee Participation in Profits will be of three months of the worker’s salary.

Roundtables between the federal government and the private sector ended on Friday, March 29. Both parties agreed to limit Employee Participation in Company Profits (PTU) to three months of salary.

The discussion on profit sharing arose as a consequence of the reform to outsourcing, but rapidly became a separate debate.

What does the change consist of?

With the new limit for PTU, the authorities will have to amend Article 127 of the Federal Labor Law, adding Section VIII, to read as follows:

The amount of participation in profit sharing will have, as an upper limit, three months of the worker’s salary or the average of the profit sharing received in the last three years; the amount that is most favorable to the worker will apply.

According to an analysis prepared by the Department of Labor and Social Welfare (STPS), these are the benefits for the workers:

  • They will receive, in average, 57 days of salary for the concept of PTU.
  • This represents an average of 18,500 pesos.
  • It is an increase of 2.59 times the amount that they currently receive.

Under the current law, profits being shared in the country are of 56 billion pesos; with the three-month cap, the amount to be distributed will be of 157 billion pesos.

However, the measure will probably cause problems to small and medium-sized companies. In an interview with El EconomistaRicardo Martínez Rojas, of the De la Vega y Martínez Firm, explained that they will hardly be able to withstand an increase of this magnitude; additionally, the economic environment of the pandemic will further complicate this.

With information from El Economista and El Financiero