Labor Compliance in Mexico: NOM-035, NOM-037, and Employer Obligations

Labor compliance in Mexico has become considerably more complex in recent years. The enactment of NOM-035 on psychosocial risks, NOM-037 on remote work, the 2021 outsourcing reform, and successive amendments to the Ley Federal del Trabajo have created a regulatory environment that demands specialized attention. For employers, lack of awareness of these obligations not only generates legal risks but can also result in significant fines and reputational damage.

NOM-035-STPS-2018: Psychosocial risk in the workplace

NOM-035, published in the Diario Oficial de la Federacion on October 23, 2018, and fully mandatory in all its phases since October 2020, establishes the elements for identifying, analyzing, and preventing psychosocial risk factors, as well as promoting a favorable organizational environment in the workplace.

The psychosocial risk factors this standard seeks to prevent include workplace conditions that generate stress (excessive workloads, lack of control over work, extended working hours), work-family interference, negative leadership, toxic labor relationships, and workplace violence in any of its forms.

Employer obligations vary according to the size of the workplace. The standard distinguishes three levels:

• Workplaces with up to 15 workers: Must establish a psychosocial risk prevention policy, adopt preventive measures, identify workers who have been subject to severe traumatic events, and disseminate information about the prevention policy.
• Workplaces with 16 to 50 workers: In addition to the above, must apply questionnaires to identify and analyze psychosocial risk factors.
• Workplaces with more than 50 workers: Must also conduct organizational environment assessments, implement documented control measures and actions, and provide medical examinations and psychological evaluations for workers exposed to workplace violence or psychosocial risk factors.

NOM-037-STPS-2023: Remote work

NOM-037, published in June 2023, regulates safety and health conditions for remote work. It applies to all workplaces that have workers under the remote work modality, understood as those who perform more than 40% of their working time at a location other than the employer's workplace.

The employer's main obligations under NOM-037 include:

• Maintaining an updated list of remote workers that includes name, gender, marital status, activities performed, job profile, address where remote work is performed, and the company name of the workplace.
• Establishing and documenting a remote work policy that defines communication mechanisms, schedule duration, supervision methods, and mechanisms for the right to disconnect.
• Providing the necessary work tools (computer equipment, ergonomic chairs, printers if required) or establishing financial compensation for the use of the worker's own resources.
• Covering a proportional share of costs arising from remote work, including telecommunications and electricity services.
• Verifying safety and health conditions at the remote work location through a conditions verification checklist that the worker themselves or a committee can validate.

Outsourcing reform and REPSE

The outsourcing reform of April 2021 was one of the most significant labor modifications in decades. The reform prohibited personnel outsourcing (placing one's own workers at the disposal of a third party) and only allows the outsourcing of specialized services or specialized works that are not part of the corporate purpose or the predominant economic activity of the beneficiary company.

Companies offering specialized services must obtain the Registro de Prestadoras de Servicios Especializados u Obras Especializadas (REPSE) before the Secretaria del Trabajo y Prevision Social. This registration must be renewed every three years. Additionally, contracting companies must permanently verify that their providers have a valid REPSE and are current on their tax and social security obligations.

The consequences of non-compliance are severe. Any individual or legal entity that outsources personnel in violation of the law can be sanctioned with fines of 2,000 to 50,000 times the Unidad de Medida y Actualizacion (UMA). Furthermore, the contracting company becomes jointly and severally liable for the labor and social security obligations of the non-compliant provider's workers.

Sanctions and inspections

The STPS has broad inspection powers to verify compliance with labor standards. Inspections can be ordinary (scheduled) or extraordinary (triggered by complaints, accidents, or imminent risk conditions). During an inspection, inspectors may request documentation demonstrating compliance with NOM-035, NOM-037, employment contracts, payroll receipts, REPSE registrations, and any other applicable labor obligations.

Fines for non-compliance with Mexican official standards on labor matters range from 250 to 5,000 UMAs per affected worker. In severe cases, such as violations of outsourcing provisions, fines can reach 50,000 UMAs. Additionally, the IMSS can impose constitutive capital assessments (retroactive charges with adjustments and surcharges) when it detects irregularities in worker enrollment or contributions.

Practical steps for compliance

• Internal labor audit: Conduct a comprehensive diagnostic of the current compliance status, identifying gaps in contracts, policies, records, and documentation.
• NOM-035 implementation: Apply the questionnaires from Reference Guide II and III (according to the workplace size), analyze the results, document corrective measures, and follow up on them.
• Remote work policy: If the company has remote workers, formalize the policy in accordance with NOM-037, update individual contracts, and establish condition verification mechanisms.
• Provider review: Verify that all specialized service contracts have a valid REPSE and establish a periodic process for monitoring provider compliance.
• Ongoing training: Train the human resources department and operational managers on current labor obligations and inspection procedures.
• Documentation: Maintain organized and accessible records of all compliance documents, as they will be required in the event of an inspection.