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01. Hiring Practices
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01. Hiring Practices

Requirement for Foreign Employees to Work

enterprise or establishment, the employer shall employ at least 90 per cent of Mexican workers.” This same provision states that with regard to categories of technicians and professionals, “the workers shall be Mexicans unless there are none in that particular specialty, in which case the employer may employ foreign workers temporarily, in a ratio not to exceed 10 per cent of those employed in that specialty.” There are two additional conditions in Article 7: (1) employers and foreign workers have a joint obligation to train Mexican workers in the specialty of the foreign workers; and (2) physicians working in enterprises must be Mexicans. The provisions of Article 7 of the FLL do not apply to directors, administrators, or general managers of enterprises. The FLL’s limited authorisation for foreign nationals to work in Mexico is also subject to the requirements of the Migration Law, in force as of 25 May 2011. The Migration Law establishes the following types of immigration status for foreign nationals in Mexico:

  • visitors;
  • temporary residence;
  • temporary residence with work permission; and
  • permanent residence.

a. Visitors

The immigration status of visitors mainly subdivides into a) tourists (and other non-business-related visitors); and b) businesspersons. Neither may pursue employment in Mexico. The maximum length of stay for foreign nationals arriving in Mexico under this type of status is 180 continuous days. The status of visitor tourist describes itself. The status of visitor businessperson allows foreign nationals to engage in business-related activities; however, they may not be paid, either in cash or in kind for these activities.

b. Temporary Residence

This type of residency is granted to those foreign nationals who have a family bond (either Mexican or foreigner) or otherwise in Mexico. They may not pursue employment—although they may file for work permission—and the length of their stay is linked to the person to whom they are linked in Mexico, not to exceed four years.

c. Temporary Residence with Work Permission

This type of residency is granted to those foreign workers whose work visa is sponsored by a Mexican company. The maximum length of a temporary residence card is four years. The Mexican company is the one to start the process and request the work permission on behalf of the worker before entrance of the foreign national to Mexican soil. Once the maximum four-year period has elapsed, the foreign national may pursue a permanent-resident status. Students fall into the category of temporary residents. They may file for work permission, as long as the job offer is related to the field they are studying in Mexico. Their stay in the country may be extended until they complete their studies and obtain the necessary credentials attesting to the completion of their schooling, not to exceed four years.

d. Permanent Residence

This type of residency is granted to those foreign nationals who meet the following requirements:

  • they have been married to a Mexican national for more than two years (and the marital bond persists);
  • they have Mexican children; or
  • their temporary residency has reached the four-year period.

All foreign nationals holding a status of permanent residence are allowed to work in Mexico. A permanent residence card does not expire. Foreign nationals under this status may start accruing time in order to file later for the naturalisation process.

Article 33 of the Constitution grants foreign nationals the same individual guarantees as Mexican citizens, but it also authorises the Executive of the Union (the President of the Republic) to force them to leave the country “immediately and without a trial” whenever the President deems their presence to be inconvenient. Under no circumstances may foreign nationals engage in domestic politics.

Does a Foreign Employer need to Establish or Work through a Local Entity to Hire an Employee?

Foreign employers that do not have a presence in Mexico must be aware of the following before hiring an employee to perform in Mexico:

According to Article 123 of the Federal Constitution, the FLL protects every employee within Mexico, regardless of the nationality of the employer or employee, the place of execution of the labour agreement or payment of salary. Once an employment relationship exists, all the rights and obligations under the FLL automatically apply, regardless of how the agreement is characterised by the parties.

By virtue of the foregoing, if an individual, expatriate or a Mexican national, renders his personal, subordinated services to a company in Mexican territory, pursuant to Article 20 of the FLL, a labour relationship exists between the individual and said company.

The FLL and the SSL grant all employees rendering services in Mexico certain fundamental and minimum rights, which cannot be waived by the employee. In turn, employers have the corresponding statutory obligations to satisfy such rights. Neither the FLL nor the SSL make any distinctions as to the nationality of the employer, employee, place where an agreement is executed or where the salaries are paid, if the employee’s performance is in Mexico.

However, there might be a risk that Mexican tax authorities consider that the foreign employer has a permanent establishment in our country, derived from having owned or leased employees rendering services in Mexico on its behalf. This risk would be enhanced if the individual renders services in Mexico for more than 180 days.

Also, the tax treatment applicable to individuals rendering services in Mexico will depend on their tax residence. If it is determined that they are Mexican residents for tax purposes, then they would be subject to pay income tax in Mexico on their worldwide income.

Consequently, if the individual qualifies as a resident for tax purposes in Mexico and receives his wages directly from abroad, he shall be required to calculate and pay the monthly tax directly in Mexico.

Finally, it is of utmost importance to review the specific activities that the individual will carry out during his stay in Mexico in order to determine the appropriate visa.

Limitations on Background Checks

There is no express impediment or restriction for employers to request a criminal record certificate or carry out background checks (i. e. credit) under Mexican legislation. On the other hand, the Mexican Federal Law on the Protection of Personal Data Held by Private Parties (the “Data Privacy Law”) governs the legitimate, controlled and informed treatment of personal data to guarantee the individual’s privacy and their entitlement to decide who, why and for which purposes their personal data may be processed (informational self-determination). There is a reasonable expectation of privacy in every data processing, being understood as the confidence that any person deposits in another regarding the personal data provided. According to the Data Privacy Law, criminal and financial/economic data is considered confidential information; any violation to this duty can entail civil and/or criminal liability. Moreover, financial/economic data is deemed as ‘sensitive data’ under the law and requires express consent from the ‘data owner’ (in the case at hand, the employee). One main obligation that employers must observe when gathering employees’ or incumbents’ personal data is delivering a Privacy Notice to each of them upon acknowledgement of receipt, containing the purposes of data processing and express authorisation for the processing of sensitive data by the ‘data owner’ (the employee).

Restrictions on Application/Interview Questions

In general terms, the employer has the freedom to ask the questions it considers convenient to a candidate in all phases of the recruitment process; in other words, there is almost no limitation to the scope of such questions from a legal standpoint. However, company policy and international guidelines might require global corporations to adhere to stricter procedures in the recruitment, interview and screening processes.

Recruiting: Given that there are no specific laws or rules applicable to recruitment, employers may, in their own judgment or interests or in accordance with company policy and interests; determine all necessary requirements for employment. Laws regulating discrimination are not extensively developed in Mexico, but the FLL states that workers shall not be discriminated against on grounds of race, nationality, sex, age, disability, religion, political opinion, migratory condition, health, sexual preferences, or social rank. Even though the FLL prohibits discrimination, in practice there is unfortunately no action against employer discrimination.

Employment Applications: On the employment application, employers can request information from an applicant regarding his socioeconomic data, educational background, prior employment, drug screening, medical conditions, family situation and even criminal background. The employer is even allowed to require the applicant to provide a certificate issued by the Attorney General’s office (federal or state) evidencing that the applicant has no prior criminal record. Notwithstanding the above, it is advisable to include a specific provision in the application form whereby the applicant acknowledges and agrees to the background check and the employer attests that the information provided will be kept confidential. Employers shall also be mindful of compliance with data privacy law and regulations.

Pre-employment Inquiries: As mentioned previously, employers have great flexibility regarding the information that may be gathered about applicants except pregnancy status for working women or any other information that may imply a discriminatory practice.

Pre-employment Tests and Examinations: Drug screening and pre-employment physicals for applicants are generally permitted, with the applicant’s consent. Additionally, the results of tests and information provided in interviews must be kept confidential and in accordance with the Privacy Notice delivered to the employee or applicant. Employers may make inquiries regarding the consumption of alcohol or tobacco, without restrictions.

Background, References and Credit Checks: Letters of recommendation are usually required by employers. Credit checks are mandatory only for certain executive positions in the banking and finance sector, but not for other positions or other industries, therefore, denying a job due to a bad credit history may be considered as discriminatory. Background and reference checks are generally allowed, but are subject to the applicant’s consent; the law is silent to this particular respect, but it is recommended that the employer secures the applicant’s consent. The information obtained has to be handled in a confidential manner and in accordance with the privacy notice delivered to the employee or applicant. The FLL allows employers to terminate any employee, without any further liability to the employer, within thirty days following the employee’s first day on the job or hiring date, if the employee used false documentation or false references to obtain employment, or deceives the employer about qualifications that he does not have.

Interviewing: The employer has the freedom to ask any questions in any phase of the recruitment process. There is no real limit set by law as to the pertinence of the questions allowed, however common sense is applied under these circumstances. During interviews, employers may ask for and corroborate any financial information, educational or employment information, drug screen results, medical condition, family situation and criminal history.

Hiring Procedures: The FLL does not provide for any special hiring process; therefore, employers do not have to follow any specific guidelines, unless agreed with the Union in the CBA (such as hiring only union members). However, depending on the position, normal practice dictates that all possible employees must first fill out an employment application, whereby all those interested in working for a company provide certain information, such as personal information, academic background, references, qualifications, skills and job experience. A second phase involves an interview with the applicant and, for some companies, criminal, work history and economic background checks, directly or through third parties. Since the company will gather personal data on the applicant, employers are also required to deliver a privacy notice to the same, in order to comply with the Federal Law for the Protection of Personal Data in the Possession of Private Parties.

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