General Suspension of Social Security Matters
Derived from the current situation of the Health Contingency by the virus COVID-19, and after the commitment of our Firm to keep its clients and general public well informed on the relevant events in the legal field, accounting and administrative of our country. We share with you a brief analysis of the effects that would be caused in the event of a general suspension of social security matters.
The Social Security Act provides as follows:
In accordance with Article 31
Where no wages are paid for absence from work but the employment relationship continues, the monthly contribution shall be in accordance with the following rules:
- If the absence of the worker is for periods of less than eight consecutive or interrupted days, the worker shall be insured and paid for such periods only in sickness and maternity insurance. In these cases, the employers must provide the corresponding clarification, indicating that the fees are omitted because of absenteeism and will verify the non-payment of the respective salaries, by displaying the lists of stripes or the corresponding payrolls. For this purpose, the number of days of each month shall be obtained by subtracting from the total number of days of the quota period concerned the number of unpaid absences for the same period.
If the worker’s absences are for periods of eight consecutive days or longer, the employer shall be released from payment of the employer’s contributions, provided that this is done in accordance with article 37;
- In the case of Article 30 (II) and (III), the same rules shall apply as to the previous fraction;
- In the case of absences of workers covered by section III of article 29, regardless of the nature of the salary they receive, the regulations shall determine what is appropriate in accordance with the criterion based on the above grounds; and
- In the case of absences covered by medical incapacities issued by the Institute, it shall not be compulsory to cover the employer’s worker dues, except in respect of retirement.
When the suspension for health contingencies is greater than 7 days, then the employer must continue to cover the respective workers’ and employers’ dues, as long as the institute is not informed of the worker’s discharge.
Regulation of Registration, Payment of Contributions and Whole of Discounts to INFONAVIT (RIPAEDI) in article 35 states the following:
When, within a calendar month, wages are not paid for absences from work but the employment relationship remains, the contributions shall be determined in accordance with the following rules:
- If the absence is for less than eight days, consecutive or not, it shall be deducted for the calculation of the days worked in the month concerned;
- If the absence is for eight days or more, whether consecutive or not, the employer shall be released from the payment of contributions, provided that the worker has given timely notice of dismissal;
- If the periods of absence are covered by incapacity certificates issued or expressly authorized by the Mexican Social Security Institute, the obligation to pay contributions remains for the periods covered by the same periods.
While we must wait for the official pronouncements of the competent authority in Social Security, it is very important to mention that at least the laws referred to in the previous paragraphs do NOT DISTINGUISH THE NATURE OF A HEALTH CONTINGENCY.
It should be noted, however, that the Executive, even with the recent amendments to article 28 of the Constitution concerning the remission of taxes, has the powers conferred on it by article 39 of the Federal Fiscal Code, to issue decrees or general resolutions to mitigate the economic effects and facilitate compliance with fiscal obligations.
Only the time and severity of the pandemic in our country will tell us what social security measures will be taken by the fiscal, federal and local authorities of Mexico to lessen the effects of this eventuality.
Employers should therefore bear in mind the obligations that will persist if there is a widespread suspension of work.