Four key regulators (workplace, tax, social insurance, and worker housing) are now sharing data. Contractors and client companies can be inspected and cross-checked against each other’s documentation and operational reality. And a new digital complaints channel is making it easier for issues to reach inspectors.

Mexico has put in place an enforcement regime that regulates staffing and outsourcing arrangements more closely than ever.

On 24 November 2025, Mexico’s Ministry of Labour (STPS) published a Protocol on Inspections in Subcontracting, setting standardised criteria for how inspectors assess compliance with Mexico’s outsourcing rules. Combined with SIQAL, a public complaints and workplace-accident reporting platform rolled out in September 2025, this points to a more aggressive enforcement posture heading into 2026.

BACKGROUND

Mexico overhauled its outsourcing regime in 2021, prohibiting the supply of personnel to third parties except under tightly defined conditions. EOR and outsourcing providers must register with REPSE and demonstrate that their activities are genuinely distinct from the client’s core business.

The new protocol does not change the law, but it establishes uniform inspection procedures and indicators that STPS will apply during visits, raising the consistency, visibility, and likely reach of enforcement.

WHAT INSPECTORS WILL VERIFY

The protocol covers both REPSE-registered providers and the companies that use them (the end clients).

Inspections are organised into three main categories:

• REPSE verification visits (for applicants and registered providers).

• Subcontracting-focused inspections at contractors and beneficiaries where specialised services are provided or where “placing workers at another entity’s disposal” may be occurring.

• Ordinary and extraordinary inspections on general working conditions, safety/health, and training, with a cross-cutting subcontracting focus

Inspectors may review service agreements, REPSE proof, personnel lists, IMSS-related documentation, payroll support, training records, and evidence that the contracted activity is specialised and not part of the beneficiary’s main activity. The protocol also contemplates on-site verification and worker interviews, which are aimed at detecting simulated schemes where the formal employer is not the party effectively directing the work.

CROSS-AGENCY DATA SHARING

The protocol contemplates information exchange and cross-checking across four key regulators (workplace, tax, social insurance, and worker housing, or, STPS, SAT, IMSS, and INFONAVIT), enabling authorities to reconcile contracts, payroll data, tax and social security information, and REPSE status for inconsistencies.

PENALTIES

Non-compliance with subcontracting rules carries fines of 2,000 to 50,000 UMA (approximately USD 14,000 to USD 340,000), and the REPSE registration can be suspended/cancelled in certain non-compliance scenarios. Serious cases may also create tax exposure and, depending on the fact pattern, additional liability and even prison sentences of three to nine years.

HOW A COMPLAINT PORTAL CAN ACCELERATE INSPECTIONS

In September 2025, the STPS launched SIQAL (Sistema de Quejas y Accidentes Laborales), a public digital platform for reporting alleged labour violations and workplace accidents, with confidentiality/anonymous reporting emphasised in official messaging and coverage.

SIQAL broadens the pipeline of enforcement triggers: complaints can be submitted digitally by anyone and used to prioritise follow-up actions, including extraordinary inspections that may occur with limited advance notice.

IMPLICATIONS FOR STAFFING AND EOR MODELS

For staffing agencies and EORs operating in Mexico (or using local partners), audit-readiness is no longer optional.

If your model relies on a local specialised services provider, you carry residual compliance risk if that provider’s REPSE status, documentation, or operational reality does not withstand inspection. Beneficiary companies can face fines for using non-compliant arrangements regardless of intent.

Providers face increased scrutiny on workforce ownership, consistency across documentation, and alignment between registered activities and what is actually delivered.

Beyond labour fines, non-compliant subcontracting can also generate tax consequences, including the disallowance of deductions and VAT credits where services fail to meet Mexico’s outsourcing requirements.

WHAT TO DO NOW

If you use specialised services providers in Mexico:

• Verify REPSE status and ensure registrations are current

• Confirm that the contracted services are not part of the beneficiary’s core business activity as registered with SAT

• Review service agreements for alignment with actual operations

• Ensure records are complete and consistent (IMSS, payroll support, training, etc.)

• Establish an internal protocol for handling inspections

• Prepare for worker interviews and on-site verification

If you are a provider:

• Align SAT activity codes, REPSE registration, and actual service delivery to avoid inconsistencies.

• Ensure personnel records, IMSS-related filings, and training documentation are current and accessible

• Expect deeper diligence from beneficiary clients and be ready to evidence compliance

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Need support ?

At Nazareth & Partners, we’re helping organisations review Mexico subcontracting and REPSE compliance, stress-test staffing and EOR models, and prepare for inspections in a way that actually works operationally. Contact us today to discuss how can we support you.

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