Employer of Record Services

When you work with us, you can decide to still handle your own hiring process. You can advertise your positions, review applications, interview applicants, and choose the candidates who will be the best fit for the job, or we can do it for you as per your choice. But once those selections are made, you can hand off tasks like onboarding, payroll, and the rest of the employee lifecycle to us.

If you’re planning to directly employ your new Mexican team, that means you’ll have to set up a legal entity in Mexico. The procedure for setting it up a legal can take months to complete since you will have to deal with the Federal Tax office, Social Security office, State Government, among other entities. Is a well-known fact that the Tax Office is packed with appointments, and these may take months. It can also be an expense some companies simply cannot afford. Even if your company can afford to establish an entity, you may want to test your entrance into a new market before fully committing to establishing a subsidiary there.

If your company wants to expand globally but doesn’t want to establish an entity, InterHuman is the perfect option since we’ll handle all the HR tasks you can’t legally handle without an entity, and you’ll still get to establish relationships with Mexican employees and test out your expansion.

No doubt Mexico is a great place to nearshore, the geographical closeness to the US market, the number of trade agreements Mexico holds, the existence of industrial clusters throughout the country as well as a competitive labor force makes it quite an attractive location to settle a business here. However, legal compliance in labor-related aspects is a very sensitive trait in the Nation; for this, you must have experienced hands and minds capable to navigate its complexities. When partnering with InterHuman, you won’t have to understand unfamiliar Mexican laws and especially you won’t have to deal with doubtful authorities in aspects related to:

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• Managing all the sensible Social Security-related items

• Payroll-related laws and regulations are established in Work, Social Security, and Fiscal laws.

• Managing Mexican Tax Office continuous requirements (IRS equivalent)

• Registering with the Ministry of Labor as an approved outsourcing entity (REPSE)

• Opening bank accounts to disperse payroll to employees

• Handling of personal data

• Working conditions

• Employment contracts

• Dealing with employee lawsuits

• Procedures for termination

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With so many legalities to navigate, companies employing Mexican workers are at a major risk of noncompliance. One misstep could lead to fines or other legal penalties from the state or lawsuits from your employees or their labor unions. Avoiding these costly scenarios is a major benefit of hiring InterHuman as your shield in Mexico.

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At InterHuman we’re proud to always behave ourselves as a completely Law –Abiding company.

Managing payroll is an ongoing HR task you can’t afford to mess up. Establishing and managing payroll in Mexico is a complicated task due to the complexity of the Labor Law that rules it. Making it happen involves things such as:

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• Making sure employees are registered with Tax Office as per their regulations

• Enroll employees with Social Security. Consider this office is the one that requires the most care to manage since they apply their regulations under their own terms and don’t need permission from other authorities to do so.

• Determining an appropriate salary.

• Adding in bonuses when they are warranted or legally mandated.

• Paying the correct rates for overtime work, these can be single, double, triple and depending on if it’s day off, Sunday or holiday.

• Paying employees at the correct intervals.

• Opening accounts to dispersion of payroll.

• Support employees in getting their own payroll accounts with the assigned bank.

• Withholding the right amounts for employee taxes such as income tax, social security and housing and/or furniture loans.

• Issue the payroll receipts with requisites as defined by the Tax Office.

• Keep record of each payroll receipt issued as well as each of the taxes, social security, loans, etc. made to the authorities.

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Outsourcing always comes at a cost, but you must weigh your options to determine if this cost may save you money in the mid to long run. Consider how much it would cost if you handled Mexican employees in-house. To do so, you will need to establish an entity in the country and take on a human resources staff to handle all HR functions there.

Also, consider the cost to deal with potential lawsuits that come if you inadvertently break the law. Besides, InterHuman long experience in dealing with payroll in Mexico has equipped us with law-abiding strategies to make more efficient the payroll expense.

Another one of the many benefits of outsourcing your Mexican HR functions is that you immediately gain access to an HR team with local expertise. Understanding the law may be a concern, but researching the law alone is not enough to employ Mexican employees successfully; you also need to know the local customs and practices that are not spelled out in the law but are still critical to run your business from the HR perspective.

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By partnering with InterHuman, you will rely on our +35 years of experience as well as the values that reside in our DNA:  Integrity, honesty, courtesy, reliability, and flexibility.

Terminating employees is a complicated business in Mexico. The U.S. is known for at-will employment, where employers can fire an employee for any reason at any time, if they don’t violate the law. But Mexico is a quite different story, here we have stringent standards for terminating an employee and specific procedures you must follow, for instance: there must be a reason under the Law to terminate an employee, if the employee is under a contract for an indefinite period, you must pay the severance as required by the law, otherwise a lawsuit is highly probable.

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You want to avoid these situations, which is why you must handle terminations with the utmost care and a thorough understanding of the law. Not having to handle these delicate situations is a crucial benefit of the support InterHuman can deliver you.

Overall, one of the best benefits of outsourcing HR services is that it frees up your company to give your time and attention to other things. The time you might be spending on figuring out unfamiliar employment laws and tax systems can instead be directed toward central aspects of running your business. This is especially helpful when you’re expanding globally because you likely have many things your company would like to concentrate on to make your expansion a success.

You can also give more attention to building strong relationships with your Mexican employees and fostering collaboration across your local team.

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As we’ve seen throughout all the benefits we’ve discussed, using an EOR can be a major value-add for your company. They can bring their expertise to the table, so you can use your expertise to grow your company.

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In short, outsourcing your HR functions when expanding to Mexico saves you time, money, and headaches and helps to ensure all of your employees are treated fairly according to their own laws and customs. At InterHuman we are ready to support you, please feel free to contact us, and let's chat about possibilities.