The CCN Mexico Report™ is now available in audio format. Listen to the podcast and follow us on Spotify or wherever you get your podcasts.
In conformity of Article 76 of the Federal Labor Law, workers who have more than one year of seniority enjoy annual paid vacation, which pay may not be less than six days of daily salary, which is then increased by two days of salary each subsequent year until the total paid salary reaches 12 days. After the fourth year, vacation pay is increased by two days of salary for each 5-year period of service to the employer. In this regard, the Mexican Supreme Court has determined in a decision issued by its second chamber that the right to receive vacation pay is generated by the employee’s time of providing services to the employer, so that in the 5-year term of employment referred to in the above-referenced Article of the Federal Labor Law, such period begins on the date of hiring, and seniority will accumulate day after day until the employee reaches five years of service, at which time the employee will enjoy the benefits from years 5 through 9, consisting of 14 days of vacation, and for employees with between 10 and 14 years of service, such employees will receive 16 days vacation, and so forth.
In accordance with Article 3 of the Federal Bonding Institutions Law (Ley Federal de Instituciones de Fianzas, or LFIF), the beneficiary of a performance or guarantybond must first initiate a claim on such a bond by presenting written notice to the bonding institution containing their claim, information relating to such claim andsupporting documentation. The bonding institution will then have 15 calendar days to request more information, in which case the beneficiary of the bond will have an additional 15 calendar days to supplement its initial filing. Once the information has been presented according to the time periods mentioned above, the bondinginstitution will have 30 calendar days to issues its decision as to rejecting the claim, granting the claim, or granting the claim partially. It is important to note that in acase of partial payment, the beneficiary has the obligation to receive the payment, but this does not imply its consent to a settlement. Article 93 of the LFIF establishes that once the procedure has been completed, or if the bonding institution fails to respond within the time period set by law, the beneficiary shall have the right to appear before a mediation board of the National Insurance and Bonding Commission, or to file a lawsuit in conformity with the special provisions set forth in Article 94 of the LFIF, which is a summary proceeding. Once the claim has been filed, this stops the statute of limitations from running, which time limit expires 180 days following termination of the bond, unless the bond establishes a different time period.
On July 2, 2008, a Decree Amending and Adding various Provisions to the Public Sector Procurement, Leasing and Services Law was published in the DOF. The new provisions incorporate “subsequent offers of discount” (oferta subsecuente de descuento) into the Law, which is used in public bidding by bidders who carry out one or more subsequent discounts to improve the prices they initially offered. However, the possibility of offering a subsequent discount must be specifically contemplated in the original bidding documents issued by Mexican federal agencies and offices, as it is not possible to change the specifications or characteristics originally contained in a technical proposal, such as an offer of discount mentioned above. Based on the new reform, Mexico’s federal agencies will be able to acquire goods and services in a more economical manner.
On July 1, 2008, the Cash Deposits Tax (Impuesto a los Depósitos in Efectivo or IDE) entered into force, as a result of being approved last year as part of the fiscalreform package proposed by President Felipe Calderon. The IDE imposes a tax of 2% on cash deposits made during each month by individuals and entities if the total deposits during such monthly period exceed 25,000 pesos, with the understanding that the tax will be imposed on all bank accounts held by taxpayers in other banking institutions. The IDE will be consolidated by banking institutions at the end of each month on a designated cutoff day in order to make corresponding calculations, and, within a term of 12-15 working days, report such to the Mexican Department of Finance and Public Credit (Hacienda or SHCP). The IDE will tax only those deposits made in cash, so that deposits made by electronic transfers, account transfers and checks will not be included. It is hoped that the IDE will bring into Mexico’s tax system those businesses that handle high volumes of cash, such as restaurants, self-service stores and services provided to the general public. It is expected that soon after enactment of the IDE, a number of taxpayers will present formal protests to the next tax.
On June 18, 2008, constitutional reforms to Mexico’s criminal justice system were published in the Official Journal of the Federation (DOF). One should consider thatsuch reforms follow the general outline of the criminal justice system in the United States and, without doubt, are designed to be an effort to modernize Mexico’scriminal justice system. The central elements of the reform are ten constitutional articles containing changes in the written system of administering and impartingcriminal justice in Mexico, to an oral system that expressly establishes the presumption of innocence under Mexican law. The reforms contemplating a change to an oral criminal justice system suppose the need to completely reform the way prosecutors (ministerios publicos), judges and attorneys perform their roles in the legal system. For this reason, a transitory article provides a term of eight years for the Mexican federal government and Federal District to issue and put into force the necessary amendments to existing laws or new laws to be incorporated into the new procedures system proposed under the reforms. Some states, such as Nuevo Leon, Chihauhua, the State of Mexico and Oaxaca have already implemented oral criminal justice systems.
