What is a fine due to employer negligence?
A fine due to employer negligence can be defined as that penalty or sanction generated to offset the costs in cash and in kind of the benefits granted by the Mexican Institute of Social Security (MISS) to a worker who was not affiliated by his employer, or when the employer registered the worker with a base salary of contribution below the real one (Art 54 Social Security Law “SSL”).
The payment of a fine due to employer negligence is like a fiscal credit by the MISS (Article 287 LSS). Thus, once the employer is notified, it has 15 working days period to pay; starting the day after the notification takes effect (Article 39 C SSL third paragraph).
It should be noted that, in the collections of a fine due to employer negligence the following items are considered:
- Medical care,
- Medicine and healing materials,
- Auxiliary diagnostic and treatment services,
- Prosthetic and orthopedic devices,
- Transfer expenses of the injured worker and payment of travel expenses, where applicable.
- Funeral expenses,
- Global allowances in substitution of the pension,
- The current value of the pension plus 5% of the amount of the concepts that integrate it (Article 79 SSL), due to administrative expenses, based on the unit costs in force by the MISS technical council (AGREEMENT ACDO .AS3.HCT.291117 / 275.P.DF).
Situations that can cause a fine due to employer negligence.
In accordance with the applicable legislation, there are several cases that can cause a fine due to employer negligence.
Some of the following are:
Article 77, SSL first paragraph, clarifies that the employer is compelled to ensure his workers against work risks and in case of not doing so, the employer incurs a fine due to employer negligence. Example: The worker suffers an accident and receives medical attention in the MISS, but the employer did not register it within the 5 working days stated by law.
Article 77, SSL second paragraph, a fine due to employer negligence will be established when the employer reduces the benefits of the insured or its beneficiaries. Example: the company registered his worker with a lower salary and he suffers an accident or a general illness.
Article 77, SSL fourth paragraph, explains that the notices of registration or salary modifications generated after a worker’s accident do not free the employers from the payment of the fine due to employer negligence. Example: A fine due to employer negligence notifies the employer and this generates disbursement notices after having been notified to omit payment.
Article 149, SSL, The employer is liable for damages caused to the worker or his beneficiaries due to failure to comply with the obligation to register it and its salary modifications. Example: the worker dies due to a general illness and the employer did not send its discharge notice to the IMSS.
When you are not facing the fine due to employer negligence.
The law is very clear in this matter, and the assumptions are as follows:
Article 88, SSL third paragraph, points out that the fine due to employer negligence will not proceed when the MISS gives the benefits in kind and in money to which they are entitled, as long as the registration notices and changes in the workers’ salary have been communicated in a timely manner; not greater than 5 business days in accordance with Article 15, section I and article 34 of the SSL.
Another situation in which the fine due to employer negligence does not apply is when a worker has a work risk at a date prior to the presentation of salary changes that are made every two months, this is not in conflict with Article 74 of the SSL fourth paragraph, since the accident was before the employer’s obligation to notify the IMSS originated.
Many of the companies do not have a strict control of the movements they register in the MISS and given this human error, a fine due to employer negligence can be caused. As a recommendation to companies that do not have good control, it is suggested to enroll new workers one day before the date of entry to the workplace.
In the case of being Small and Medium-Sized Company or people with a business activity that still do not have a solid structure, one of the solutions is to hire a personalized service do their payroll.
If the fine due to employer negligence is already established, we can resort to an unconformity appeal (Art.294 LSS) within a 15 working days period in the MISS Delegation Consulting Council, as long as the fine is inadmissible.
Another option is to present a nullity trial before the Federal Court of Administrative Justice, within 30 working days, this according to the amount of the fine due to employer negligence. (Art. 295 SSL)
Practices outside the guidelines set by the law, the lack of good control and the incorrect calculation of salaries can cause a fine due to employer negligence, this will lead to a waste of actions, time and resources, to be able to clarify the differences, create defense means or, where appropriate, generate the complementary payment for said differences. Many times, these tax credits can represent a high cost and can bankrupt the company.
It is recommended to implement better control in the calculation of wages according to article 27 of the SSL; therefore, if the employer does not correctly declare the salary before the MISS, a bad practice will be attributed to him which will cause him to be accused of the crime of fraud, which is sanctioned from 3 months to 9 years in prison according to article 307 SSL.
If you are in any situation like these, contact us to advise you, we have excellent lawyers in tax and labor matters.
-Social Security Law, Official Gazette of the Federation (OGF), United States of Mexico, Presidency of the Republic, Mexico, December 21, 1995. The last amendment published OGF 22-06-2018
-Social Security Law, regulation on enrolling matter, companies classification, collection and inspection, Official Gazette of the Federation, United States of Mexico, Presidency of the Republic, Mexico, November 1, 2002. Last published amendment OGF 15- 07-2005
-ACTION ACDO.AS3.HCT.291117 / 275.P.DF, Official Gazette of the Federation, United States of Mexico, Presidency of the Republic, Mexico, November 29, 2017.