STPS toughens rules to prevent new abuses in outsourcing

The Ministry of Labor and Social Welfare (STPS) is preparing modifications to the general provisions for the operation of the Registry of Providers of Specialized Services or Specialized Works (Rep), the register managed by the dependency and in which the outsourcing companies in order to provide their services.

“Derived from the practice in the implementation of the registry, and for greater efficiency in the development of surveillance actions and promotion of compliance with labor regulations that regulate the subcontracting of specialized services or the execution of specialized works, it has been deemed convenient modify the general provisions for the registration of natural or legal persons who provide them”, says Luisa María Alcalde Luján, head of the STPS, in the project.

The amendment is under review by the National Commission for Regulatory Improvement (Conamer) and includes a new chapter to regulate the surveillance of the Repseincluding inspections, as well as new criteria to deny registration to the register or cancel it.

Notable changes include the ability for the agency to ask the companies that hire specialized services complementary information during the process of registering a service provider company.

Until now, the STPS can deny registration to companies that do not certify the specialization of the service they want to offer, provide false information or are not in compliance with their tax or social security obligations. However, the modifications proposed by the authority would add two new assumptions:

• Due to breaches of the Federal Labor Law regarding subcontracting.
• For identifying non-compliance with the working conditions established in the Federal Labor Law.

On the other hand, the dependency seeks to incorporate four new elements to cancel the registration to the Repse. In this way, companies could lose their registration when:

• It is detected that the data or documents provided during the inspection visits are different or inaccurate with respect to those entered on the platform.
• Provide false information or apocryphal documents during the visits that are made, without prejudice to the legal actions that may take place.
• Notice of breaches of the Federal Labor Law regarding subcontracting.
• Some type of breach of the working conditions established in the Federal Labor Law is identified.

In addition to this, the Secretary of Labor seeks to establish clearer rules to be able to modify or add specialized services in the cases of companies and individuals that are already registered in the register.

In this sense, companies may request at any time the modification or incorporation of new activities, as long as these form part of the supplier’s corporate purpose. In the case of natural persons, the update request will be appropriate if the activities are contemplated in their proof of tax situation.

“The Secretariat, through the platform, must rule on the request for modification or update within the twenty business days After receipt of this, in case of not receiving the corresponding notification, the procedure set forth in Article 15 of the Federal Labor Law will be applied”, refers to the project.

That is, if the term expires and the agency does not respond, the company may require the authority to issue a statement within the next three days, if after this no solution is obtained, the modification will be considered as completed.

Registration with the Repse is an obligation for subcontractors of specialized services. This register was born with the subcontracting reform and has more than 128,000 records, according to the public catalog of the STPS.

More teeth for surveillance and inspection

The provisions for the operation of the Repse also contemplate new rules for the corporate surveillance registered in the registry with inspections for both service providers and their clients.

“For the execution of surveillance actions in compliance with labor regulations regarding the provision of specialized services or execution of specialized works, the Federal Labor Inspectors may request all the information and documentation that allows corroborating compliance with the Federal Labor Law. Work on subcontracting and the provisions of this agreement”, indicates the project.

The new provisions also include a list of basic points to check labor inspectors:

For companies with Repse

• That the information provided by natural or legal persons on the Repse platform for the application coincides with the real conditions of the workplace.
• That the activities provided as specialized services or execution of specialized works are not part of the corporate purpose and/or the main economic activity of the beneficiary.
• That they have contracts for the provision of services or specialized works.
• That in the workplace the working conditions determined in the Federal Labor Law are complied with.

For companies benefiting from the services

• That the workers who are executing specialized services or works in the beneficiary’s workplace do not carry out activities that are part of the corporate purpose and/or the predominant economic activity of the beneficiary.
• That the contractor’s workers are duly identified.
• That they have contracts for the provision of specialized activities.

In case of identifying breaches of the new subcontracting rulesthe inspectors must request the beginning of the corresponding administrative procedure and, when applicable, the cancellation of the Repse.