Engaging with a Contingent Workforce in Mexico – What You Need to Know

Over the years, Mexico has become a popular location for engaging a contingent workforce. This is due to several factors, including its proximity to the U.S., its diverse pool of qualified talent, and its cost-effective appeal for businesses. However, recent legislative changes in Mexico have caused some confusion for companies wondering whether they can still utilize a contingent workforce without establishing their own entity in the country. The short answer is – yes, they can!

In this article, we’ll clarify the current situation and provide insights to help your company confidently engage a contingent workforce in Mexico with the support of an Employer of Record (EOR).

Is It Still Possible to Hire Contingent Workers in Mexico?

In 2021, Mexican authorities introduced new laws to strictly regulate outsourcing.

These laws were designed to prevent companies from using third-party employers as EORs to avoid employer obligations and reduce workers' entitlements.

However, these regulations do not ban hiring a contingent workforce entirely. Instead, certain exemptions exist, which we’ll discuss in more detail below. The intent of these legal changes is to ensure workers are properly protected and receive all the benefits to which they are legally entitled.

Can TCWGlobal Still Support My Business in Mexico?

Yes, TCWGlobal continues to support businesses hiring contingent workers in Mexico under the new legislation. Our team will partner with your company to minimize compliance risk with local laws and confirm that the talent being engaged qualifies under exemptions for specialized services.

TCWGlobal employs workers through a local partner entity registered with the official Registry for Specialized Services (REPSE), giving your team legal peace of mind. By leveraging this exemption and adhering to local labor laws, we help clients engage talent in a compliant manner, helping protect your organization from potential non-compliance.

TCWGlobal will help you make sure that required contributions are made and that all employer taxes are paid. Additionally, we will help educate our clients regarding worker benefits that are required by law.  

What if the Law Changes?

In the unlikely event of further legislative changes that impact contingent workforce engagements through TCWGlobal in Mexico, our team will work closely with clients to implement any necessary adjustments. Additionally, we’ll work with you to align contingent worker employment contracts with the latest legal requirements, keeping your business protected.

What Worker Protections Does TCWGlobal Provide in Mexico?

We prioritize compliance with Mexican labor laws by providing statutory benefits such as paid time off, healthcare, and social security contributions. Our goal is that workers engaged through TCWGlobal will receive fair and legally compliant treatment throughout their contracts.

What Other Recent Changes Affect Employer of Record Services in Mexico?

The Mexican Ministry of Labor and Social Welfare recently introduced updates requiring a non-taxable telework stipend and additional safety and health measures for remote workers.

• Telework Stipend: Previously, this was a discretionary bonus capped at 1,000 MXN. The new law now mandates that all remote workers receive a stipend, making it non-discretionary.
  
  
• Health and Safety Measures: Annual medical examinations are required to ensure workers’ ongoing health and safety while performing their duties remotely.

TCWGlobal is Here to Help! 

No matter where your company is in the international onboarding process, we understand that navigating labor laws and compliance requirements can feel overwhelming.

That’s why TCWGlobal is here to support you every step of the way! Whether you're just getting started or need expert guidance to move forward, our team is ready to provide you with all the information and support you need to make confident, informed decisions.

Connect with our global employment experts today and let us partner with you as you expand your workforce globally. You can reach us at hello@tcwglobal.com or 858-810-3000.