TAX and LABOR. Mexican Supreme Court of Justice reaffirms the prohibition of Labor Subcontracting June 29, 2023

On June 14th, 2023, the press communication 212/2023 was published in the Mexican Supreme Court of Justice (MSCJ) website, through which it was informed that, during the session that took place on that same date, the Second Chamber of the MSCJ reaffirmed that labor subcontracting is generally prohibited, for violating workers’ rights and evading tax obligations. Hence, labor subcontracting regarding specialized services or the execution of specialized works is exceptionally permitted.


The referred communication sets forth that the Second Chamber of the MSCJ validated diverse requirements imposed to the companies dedicated to specialized subcontracting; nevertheless, it notes that it was determined that the Ministry of Labor and Social Welfare (MLSW) is not entitled to define the concept of specialized services or works.

The communication points out as background the “Amparo” Review 687/2022[1] through which the complaining party exposed, among other matters, that article 13 of the Federal Labor Law (FLL) violates the legal security principle by conditioning the exercise of subcontracting to specialized services without promptly and precisely defining such concept; that is to say, the elements in order to esteem a specialized service or work are not delimited, leaving it to the discretion of the tax and labor authorities.

Also, the complaining party mentioned that it is not enough that the denoted legal disposition refers to the corporate purpose and economic activity of the beneficiary, since those elements are related to the prohibition itself but do not form part of the concept of specialized services or works, as such.

Finally, the complaining party stated that the “Ruling by which the general dispositions for the registry of individuals and companies that render specialized services or execute specialized works set forth in article 15 of the Federal Labor Law are specified” (Ruling), published in the Official Gazette of the Federation on May 24th, 2021, precises the definition of “specialized services or works”, which violates the hierarchical subordination principle for going beyond the FLL provisions themselves, since in these articles, the MLSW was limited to regulate the inscription process upon the Register of Contractors of Specialized Services or Specialized Works (i.e. REPSE).

Until the resolution through which the “Amparo” Review 687/2022 was resolved is published, we will know with detail the meaning and scope of the referred resolution.

Nevertheless, we esteem that the precision pointed out in the communication is relevant, because if it is confirmed that the MLSW does not have powers to define what must be understood regarding specialized services or works, intrinsically would demonstrate the illegality of the “Guide for complying with the obligations regarding the registry upon the Register of Contractors of Specialized Services or Specialized Works for individuals or legal entities that provide specialized services or carry out specialized works within the framework of the amendments in labor subcontracting matters” issued on August 26th, 2021 by the MLSW, with which it has supported the exercise of verification powers, regardless of the impact that the aforementioned Ruling may suffer.

If you have any questions regarding the foregoing, please do not hesitate to contact us

Mexico City, June 29th, 2023

[1] The origin of the present matter is the “Amparo” Review 121/2022 resolved by the Second Collegiate Court in Labor Matters of the First Circuit, who determined the applicability of the original jurisdiction of the MSCJ (i.e jurisdiction reservation) for the resolution of the constitutionality of the challenged provisions, and the Indirect “Amparo” 1934/2021 resolved by the Eight District Court in Labor Matters of Mexico City.

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