Mexican Employers Receive Partial Exemption from Employer Portion of Social Security Payments

On March 3, 2008, Mexico’s federal government issued the “Decree Providing a Partial Exemption for Payment of Employer SocialSecurity Law Payments” in order to stem possible negative effects of a downturn in Mexican economic growth. Such Decree relievesemployers of the obligation to pay amounts equivalent to 5% of the employer portion of Social Security Law payments corresponding toworkplace risk, illness and maternity, disability and life, and employee benefits insurance beginning March 1, 2008. The partial exemptionapplies only to employers who are registered with the Mexican Social Security Institute (IMSS), whose employees do not perform work forgovernmental entities and all of whom are registered with the IMSS, which do not currently have pending tax credits in their favor. It isimportant to mention that if an employer takes advantage of the Decree, and the IMSS subsequently determines that the employer has notmet all applicable requirements, the IMSS may assess late fees and penalties.