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  • Writer's pictureBrandon Guillermo Lopez Moreno

Analysis of social security for household workers


Which obligations will I have as an employer with the incorporation of household workers into the social security program that provides IMSS (Mexican Institute of Social Security) to them?


On July 2nd, 2019, the Mexican government published an article about the regulations regarding the hiring of household worker, in the “Official Daily Federation”, which is the online journal where we find updated government regulations. In this article, there were changes made to the Federal Labor Act and the Social Security Act which will, reform, add and delete some regulations about household workers.


That publication starts a series of obligations for the people who want to hire a household workers and for the people who nowadays have a housekeeper working in their homes.


It should be noted that the aforementioned decree was issued as a result of the Mexican judgment number 2a.XXXI / 2019 (10a.). This judgment was enacted after a household worker brought her previous employer to appeal court. She did this because she wanted to be retroactively enrolled in IMSS.


It is important to say that, in accordance with the Federal Labor Law, the definition of a household worker is as follows:


The person who receives payments for cleaning the house, and doing any other activity inherent to keeping the house of her/his employer clean.


It’s important to understand that your household worker can’t produce income for you. This is one regulation of the program. The following are different situations that you might encounter when employing a household worker:


I. Household workers who work for an employer and reside in the home where he/she carries out their work duties.


II. Household workers who work for an employer and do not reside in the home where he/she carries out their work duties.


III. Household workers who work for different employers and do not reside in the home of any of them.


In all the above-mentioned situations it’s important to note that employers are responsible for the labor, social security, and tax obligations.


Obligations in labor and social security matters.


The Mexican social security institute implemented a pilot program to guarantee that household workers will have all the security benefits offered by this Institute inequality with other workers.


It is important to know that household workers will be included in the compulsory social security system and they will have benefits such as vacation, days off, bonuses, etc. As well, these conditions have to be in a written contract.


In 18 months from now, the institute must deliver a report to the government.


In that report, the institute will include, all the information obtained and the problems that have been detected.


The objective of this report is to make the necessary modifications to define in detail all the formalities that should be considered to give social security to household workers. The modifications will be completed in 6 months.


Once all the modifications are made, the validity of the provisions added in the social security act about the household workers will begin.


These are the obligations that employers have to follow:


I. To register a household worker with IMSS, the Institute only needs to receive the payment information of the worker-employer fees, because this action is considered to be his/her enrollment.


II. To calculate these fees, the employer has to integrate the base salary of contributions with the payments made to the worker which include his/her daily fee, food, room, etc.


III. The payment of the worker-employer fees has to be made between the first and the 20th calendar day of each month, and they must registered the base salary of the household worker.


IV. If the household worker works for a single employer, the employer has to pay all the worker-employer fees corresponding to the period in which the housekeeper was active for him/her.


V. When the household worker labors for more than one employer, the employers must pay the worker-employer fees in proportion to the days that the household worker labored with each one during the corresponding calendar month.


VII. The employer must keep proof of payment of the worker-employer fees.


However, the pilot program doesn’t include the services given by the INFONAVIT (the public agency that gives loans to the workers to buy a house). But that public agency has a support program called “INFONAVIT for all” that allows the employers to make contributions to the National Housing Fund in favor of its household worker, so they can gain access to a housing loan.


Today, this program is under review in order to offer better service to workers and employers.


The enrollment of housekeeper to IMSS will only give them access to six types of insurance that can be used by household workers and their direct family members in ascending and descending lines; these insurances are mentioned below:

  • Diseases and maternity coverage

  • Disability and life

  • Work accidents

  • Retirement

  • Pension

  • Kindergarten and social benefits


Fiscal obligations


As soon as the employer hires a maid the employer has to start withholding the income tax and the payroll tax of the salary he/she pays to the household workers and then the employer must remit this information to the tax authority. However, there are some exceptions:


Income tax


I. If the household worker receives less than the minimum salary per month, the employer doesn’t have to withhold the income tax. The minimum monthly salary is $2053.60 pesos per month.


II. When the employer hires a household worker, it becomes his or her obligation to give the person a monthly subsidy called the employment subsidy or “subsidio al empleo”. As an employer, if you pay your housekeeper less than the minimum salary, you are obligated to pay the subsidy. If they make more than the minimum monthly salary, he/she doesn’t qualify for the subsidy.


III. Each time that the employer pays the salary to the household worker, the employer has to give him/her an invoice with the information about their payroll (amount, date, details, etc.).


Payroll tax


I. In the event that, at the time of hiring the household worker, this is his/her “first formal job”, the employer doesn’t have to pay the payroll tax for the first year he/she receive the services of the household worker. And in the second year, the employer only has to pay the 50% of the payroll tax to the government.


The statement “first formal job” means that the household worker has never had a job as a housekeeper before, as far as the government is concerned.


II. At this time, the state government is not in a position to supervise taxpayers for this type of tax.


As of today, when an employer enrolls his or her household worker with IMSS they are given a different form to fill out. SAT requires that the household worker has his/her RFC number as well as his/her IMSS number.


As noted above, there are some exceptions, each case needs to be specially analyzed before hiring the person who will work as a household worker. As you can see, hiring a housekeeper can be complicated however here at T&R we are experts in helping you accomplish this. This new program is designed to better the lives of household worker.

 

Published on August 30th, 2019.


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