Subcontracting rules for US manufacturers in Mexico

For decades, many operations in Mexico were staffed through service companies that employed the workforce on the operator’s behalf. The 2021 labor reform ended that model. Any US company planning or running an operation in Mexico should understand what is now allowed, what is not, and where liability lands.

What is prohibited

Mexican law no longer allows a company to receive workers supplied by a third party to perform its own activities. The people who carry out the core business must be employed by the company that benefits from their work. The same logic applies within corporate groups: an affiliate that simply employs staff for the operating company is exposed to the prohibition.

What is still allowed

A company may contract specialized services or specialized works, provided they are not part of its corporate purpose or its predominant economic activity. The provider must be registered in the Registry of Specialized Service Providers (REPSE) maintained by the Ministry of Labor, and the contract must identify the registration and the scope of the specialized service. Cleaning, security, IT or maintenance may qualify; production itself generally does not.

Liability does not disappear

If a specialized provider fails to meet its obligations to its workers, the beneficiary company is jointly liable. Tax and social security rules add further consequences for non-compliant arrangements, including the loss of deductions. A contract with a provider is therefore only as good as the provider’s compliance, which should be verified and documented periodically.

What changed recently

In late 2025 the Ministry of Labor published an inspection protocol focused on subcontracting, including visits to verify REPSE registrations and whether workers’ actual activities match the contracted services. In June 2026 the Ministry simplified REPSE procedures, particularly for small providers. Enforcement, in other words, is getting sharper while the paperwork gets lighter.

Practical steps

Before launching, decide which activities your Mexican entity will perform with its own employees and which may be contracted as specialized services. Check each provider’s REPSE registration and scope, build compliance reporting into the contract, and keep records ready for an inspection. For operations run under a shelter, confirm how these rules are managed in the shelter agreement.