Impeding a labor inspection will cost companies up to 481,000 pesos

The changes made to the inspection regulations by the Department of Labor and Social Welfare (STPS) are already in operation; these changes toughened the consequences that companies will face if they impede the performance of this procedure. Not allowing a labor inspector to conduct a verification visit will now be more costly for employers.

“A very important topic that should be highlighted among the changes to the regulation is the refusal of the employer to having the inspection conducted. The penalizations that the employer could be subject to in face of a refusal to facilitate the inspection were already established in the Federal Labor Law. Now, the inspector will prepare a closing agreement and issue a cautionary notice for the provision of the requested documentation to be complied with and the employer will be warned that, in the event of lack of compliance, it will be assumed that he does not comply with labor regulations”, explained Miguel Ángel Cantú, director of the Labor Area at the Chevez Ruiz Zamarripa Firm in Monterrey.

As part of the reform on subcontracting, a fine of up to 481,1000 pesos was established in the Federal Labor Law (LFT) for employers that impede labor inspections on these matters.

The amendments to the regulation were homologated with this new provision in labor legislation so that, when these cases arise, a proceedings closure report is prepared in order to start the penalization process, the same document that is issued when an employer does not prove compliance with regulations during the fiscal year.

“When the Inspection by the Labor Authority is not permitted to be conducted, in accordance with the provisions of Article 1004-A of the Law, [the labor inspector] will issue the proceedings closure report referred to in the first paragraph of this Article for violations of the labor regulations and for the refusal to having the Inspection take place”, states the new provision of Article 51 of the General Regulation on Labor Inspection and the Application of Penalties (Regitas).

This means that, if the inspection is not allowed to be conducted, the authority will assume that none of the points to be verified in the visit is complied with. On various occasions, Alejandro Salafranca, head of the Unit for Dignity in Labor of the STPS, has reiterated that this “padlock” was necessary because “closing the door” on inspectors was very easy and it had no consequences.

“If you do not let me in and I was visiting you in regard to subcontracting matters, I assume that regulations on subcontracting matters are not complied with. From that point, the company, under the whole system that guarantees rights under the rule of law, has days to defend itself and to present its position, but the inspection is no longer eliminated, it is now discouraged to prevent the inspector form entering, because it will be more complex not to allow him in than letting him enter; you would really have to be in an extremely bad position not to let him in”, said the official during the Coparmex [Employers’ Confederation of the Mexican Republic] forum.

With the homologation of Regitas to the penalizations for non-compliance with the inspection of the LFT, employers may not only be subject to a fine for not permitting access to the inspector, but also for breach of the regulations, which are assumed not to be complied with said Miguel Ángel Cantú during the New Labor Agenda webinar conducted by Chevez Ruiz Zamarripa.

“As we can see, the regulation now includes many more penalizations or possibilities for penalizing the employer. We have to be very much aware of this and conduct preventive work and have our files organized in order to participate in proceedings in a proper and timely manner and evidencing our due compliance”, stated the specialist.

In this sense, part of the recommendations issued by the D&M Abogados Firm include training all corresponding personnel for the participation in and discharge of labor inspections in all labor centers. In addition to this, “implementing a defensive file with the documents and necessary information to accredit compliance with labor obligations”, stated the Firm in an informative note.

The inspection process step by step

Juan Soto, director of the Labor Area at Chevez Ruiz Zamarripa in Querétaro, explained that the inspection process, both for ordinary and extraordinary exercises, consists of eight stages, these are:

1. The authority schedules the visit.
2. Visit by the inspector to the work center; the inspector provides the original inspection order document to the company, shows his valid identity card and presents a guide of rights and obligations of the inspected employer.
3. The inspector may be accompanied by an expert or specialist in the branch of service or in the regulations to be verified.
4. The inspector may interview the workers, the employer or his representatives.
5. Once the inspection is completed, the public servant prepares an inspection report in the presence of two witnesses.
6. During the procedure, the employer may consult its status through the Inspection Process Support System.
7. In case of non-compliance, the labor authority issues a technical or documental order with deadlines for its compliance.
8. In the event that compliance with the granted terms is not accredited, the authority penalizes the company.

In that same forum, Mayeli Cabral, a partner in the Labor Area at the same Firm, agreed on the importance of taking a preventive role in face of possible labor inspections, because one of the significant changes to the Regitas is the reduction of the deadlines for compliance.

“It would seem that the previous regulation was a bit more forgiving and was much more focused on compliance and correction and, therefore, gave us a certain amount of time to make those corrections. There is no time in the new regulation, this matter of preparation, prevention and care, of order, even in regard to the way in which we keep information will be of the utmost importance, because we no longer have that time”, said the specialist.