Hiring household staff or employees in Mexico comes with unique legal obligations.
Failing to follow the proper procedures can have serious consequences and may cost you a lot more than you expect.
Like not paying into social security in Mexico.
Next up in our household staff series, C.P. Jorge Tovar from Corporativo Grupo Babylon Contadores y Abogados breaks down what you need to know about paying into social security in Mexico to stay compliant with IMSS.
[If you missed Part 1 of this series on why you need household staff contracts, check it out here.]
Q: What are the obligations related to social security in Mexico for household staff?
Jorge: All household staff must be enrolled in the IMSS (Mexican Social Security Institute).
You’ll need to contribute monthly to your staff’s social security, covering healthcare, retirement, and other benefits.
Keep records of your payments to avoid legal issues, as failure to register employees can lead to fines ranging from 12,000 to 160,000 pesos per month.
Q: What happens if my employee refuses to be registered with IMSS?
Jorge: Some employees may resist registration because they think it will deduct from their wages.
I encourage employers to explain to staff that their wages won’t decrease, as IMSS contributions are made separately by the employer.
Q: What are the legal risks if I don’t register my employees properly?
Jorge: Failing to comply with labor regulations and paying into social security in Mexico can result in substantial financial penalties ranging from 12,000 to 160,000 pesos per month.
If an unregistered employee claims they are working for you, authorities may impose fines and backdate social security payments.
The fines can accumulate back to the start of the employment relationship, even if that was years ago. Authorities may grant 10 business days to resolve noncompliance issues, but all back payments must be made.
Also, know that IMSS, immigration authorities, and tax offices are increasingly sharing data to detect unregistered workers.
If you don’t have contracts in place with your employees, it’s important to do that as soon as possible.
That way, if IMSS comes to collect fines, you are in the clear even if the contract was recently drawn up.
Q: Do I need to hire an attorney or accountant to make IMSS payments?
Hiring an accountant for assistance is recommended to make sure you follow the correct procedures each month, avoid confusion, and maintain compliance.
Social security registration involves more than just enrollment. It requires ongoing monthly filings, even if you aren’t running a payroll. An accountant ensures these filings are accurate, which will prevent legal issues or penalties down the line.
I strongly advise against giving your accountant direct control over your payments to IMSS. You want to ask the accountant to prepare the necessary documents and provide you with the payment details (capital de liquidación) so that you can make the payments yourself at the bank. This ensures you keep records and avoid the risk of payments being mishandled by the accountant.
Need Expert Advice?
C.P Jorge Tovar is with Corporativo Grupo Babylon Contadores y Abogados located in San Miguel de Allende, GTO. They work with clients all over Mexico – from CDMX to Monterey.
Email Jorge at grupobaconsultoria@gmail.com or call the office at 415-104-9972.
