Payment Alternatives for Worker-Employer Contributions

The Technical Council of Mexican Institute of Social Security (hereinafter IMSS) issued the press release No. 191, dated April 13, 2020, in which it disseminates the legal and administrative instruments to facilitate the correct payment of worker-employer contributions. In this regard, it is important to mention that the legal and administrative instruments in question are legal figures that are already established in Law, and that in reality they do not constitute extraordinary supports or implemented due to the contingency, but rather aim to guide the patterns of companies with special circumstances and that in some way have worsened with the COVID-19 contingency.

  1. Partial payment agreement for IMSS fees (articles 40-C and 40-D LSS). The payment of worker-employer fees can be covered in 48 monthly installments, provided that an initial amount of 20% of the employer fee and 100% of the worker fee is paid, and the rest in the months mentioned. The historical amount of the fee is not modified, however, the amount generates updates and surcharges. The interest rate per monthly term is between 1.26% and 1.82%, depending on the term chosen (12, 24 and more than 24 months) from the moment the agreement is signed and formalized. No guarantee is required.

For such purposes, the request for deferred or partial payment must be submitted to the administrative unit that controls the employer’s registration of the interested party and must include all the tax credits in charge of the employer, using the format authorized by the Institute for this purpose, signed by the employer or his legal representative, attaching a copy of the official identification if the employer is a natural person, or a copy of the company’s articles of incorporation, a copy of the power of attorney of the legal representative and an official copy of his identification, if it is of moral person.

Prior authorization from the IMSS will be required for partial or deferred payment in the case of the following employers:

  • Controlling and controlled companies, in terms of the Law of Income Tax (LISR).
  • The institutions or entities regulated in the Laws of Credit Institutions, General of Institutions and Mutual Insurance Companies, Federal of Surety Institutions, Retirement Savings Systems, General of Organizations and Auxiliary Activities of Credit, of the Market of Securities and Investment Companies;
  • Decentralized organizations and companies with majority state participation.
  • Employers with several workers greater than three hundred, and
  • In the case of tax credits determined in exercise of the powers of verification of the Institute.

A report on the cash flow in cash and banks, corresponding to the two months prior to the month in which the request is submitted, and a liquidity report, projected for a period equal to the number of installments requested, must be attached to the request. Likewise, the IMSS may request additional documentation to authorize the request.

The request and / or authorization may be without effect in special cases; In this instance, no guarantee will be required. However, the lack of payment or financial situation of risk of the employer can generate the mentioned cancellation.

  1. Decrease of corresponding fines. The corresponding fines can be reduced, as long as the commitments are fulfilled.
  2. Discount of up to 7 days for absence (article 31 LSS). In cases of absence of the worker where the employment relationship subsists, paying during those days the fee that corresponds to sickness and maternity insurance.
  3. Suspension of certain administrative and legal activities. Due to the COVID 19 contingency, these are non-working days for the performance of actions, proceedings, hearings, notifications or requests, the period between March 31, 2020 and the date on which the Technical Council determines that said contingency has ended.

We recommend consulting with your ECOVIS Quibrera Saldaña consultant the specific case of each employer and understand the corresponding requirements under the terms of the social security legislation.

You can download the document here.

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