Note published on July 24 in Expansión, Empresas [Companies] Section by Nancy Malacara.
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As of the beginning of July, 9,000 companies started their registration in the Registry of Specialized Services or Specialized Works (REPSE), of which 3,000 completed the procedure and only 600 have obtained the permit. Since subscriptions into the registry started on May 24, the site has registered over 65,000 visits. The term comes to an end in one month.
Time seems short. “It will be appreciated if they grant one more month, but it is insufficient”, says Óscar de la Vega, Labor Law lawyer with over 30 years’ experience, who explains that it is a very extensive reform that covers labor, union, tax, benefits, housing and social security aspects.
Out of all of the clients of the founding partner of the De la Vega y Martínez Rojas Firm, 30% have satisfactorily obtained their registration before the REPSE. The rest has opted to file amparo suits to gain time, since private companies were given 90 days (that ended today) while public entities have until January, 2022.
“One of the concepts of violation, within the amparo suits that have been filed, is precisely the discriminatory treatment that exists between the private and the public sector in the application of this reform”, the lawyer explains.
Up until now, few of the amparo suits filed by this Firm have obtained provisional and definitive suspensions. The majority continue to go back and forth between administrative and labor judges.
“Migrating so many people is being very complex”, explains De la Vega, because it is not just a question of registering the company, but also the suppliers it receives. And there are sectors such automotive, aerospace, chemistry, retail, financial and mining that necessarily require subcontracting services, he points out.
José Luis Lavín, a partner at the GLZ Abogados Firm, is going through something similar. The specialist in corporate law has filed over 25 amparo suits in the last few days.
“Many companies started amparo proceedings because the deadlines for some and for others are disproportionate. Businessmen have not been able to abide by the law not because they do not want to, but because there are many limitations and uncertainty in the process for registration”, he says.
It happened to a client who is seeking to register as a specialized cleaning services company. At the time of accessing the REPSE platform, registration could not be completed because the system stated that there was a pending payment in the amount of 400 pesos. The payment was made 15 days ago and, to this date, this has not been acknowledged in the site.
In order to request registration, companies must be up to date in their tax and social security obligations. They are requested to have an up-to-date electronic signature, domicile, name or corporate name, RFC [Federal Taxpayer’s Registry Number], Memorandum of Association for the company or Certificate of Fiscal Status (for natural persons), economic activity and employer registration before the Mexican Social Security Institute (IMSS).
Additionally, natural persons or entities that intend to register specialized services or works must capture, one by one, the activities that they wish to incorporate and that are part of their corporate purpose or Certificate of Fiscal Status, because they will be granted a folio for each one of them.
Specialists point out that the allotted time will not be sufficient, even with an extension. They base their argument on these factors:
There are no appointments available. Incorporating the staff into the payroll has involved the creation of new companies, which have not been registered in the Tax Administration Service (SAT) because there are no appointments available. On the other hand, not all companies have an up-to-date electronic signature, which is also processed at the SAT.
Technical reasons: The REPSE portal only allows two megabytes for uploading documents. There are companies that have a large volume of information and require more space.
An absence of clear rules. Article 12 of the reform contradicts Article 1: while one of them prohibits subcontracting, the other one states that it is possible, as long as it is registered as a specialized service. There is, however, uncertainty on which services can be considered to be specialized services and which cannot. This has caused time losses for the majority of entrepreneurs, and some have had the system generate errors in regard to the delimitation of the corporate purpose.
It is a 360 ° change. There are multinational companies that are making use of their experience in other markets to deal with the reform in Mexico. Nevertheless, this being a new way of doing business in the country, companies need a realistic and coherent time for its implementation.
Costs. Complying with the reform to outsourcing involves costs. Starting with the creation of new companies, the drafting of legal documents, advisory, and even termination payments in the cases in which companies cannot absorb all of their subcontracted workers. These are business decisions that companies have had to evaluate and that not all of them can afford to pay.