The day to day operations of a labor and employment firm are filled with some very consistent and repetitive inquiries such as social security, worker’s compensation, general insurance, minimum mandated benefits and over all employee costs in Mexico. For employers and international investors, it is essential to point out that full compliance in all abovementioned areas, along with transparency in Mexico is obtainable and surprisingly viable if analyzed and implemented correctly.
In the US for example, when occupational injury or illness arises, employees may receive worker’s compensation benefits to replace lost wages and to help pay for medical expenses. This is just one of those “employee costs” that all employers entertain and that must be factored in to be able to analyze the viability and overall cost of business. Understanding the depth and cost of employer responsibility in terms of mandated benefits and social security is at large, one of the most important elements of hiring employees in Mexico.
Per Mexican law, everything that the employee is entitled too and everything that is binding for employers is centered, handled and paid unto one government institution which is the National Social Security Institute or “IMSS” (Instituto Mexicano del Seguro Social).
It is mandated that all employers must register under the Mexican Social Security Institute which provides governmental full medical care, out-patient, maternity, disability and injury care to all workers registered therewith alongside retirement, pension plans and even day care centers for working mothers. Social Security services are paid for through fees or quotas funded both by employees and employers via withholding which is one of the primary obligations of all employers when disbursing salaries. Other than the obligation to register all workers under IMSS, these social security fees are essential to compliance and workplace stability because they replace workers comp, 401 K and retirement (all other insurance and benefits) whilst...
