Pursuant Section 27 of the Social Security Act, cash payments made or transferred to the workers account, under the concept that might be deemed as social welfare benefits, shall integrate the base contribution wage.

Many service providers, acting as employers, make cash payments or transferred funds to the workers accounts, label them in their accounting books and in their payment receipts, as social welfare concepts, without integrate them to the base integrated base contribution wage, breaching the provisions set forth on Section 27, subsection II of the Social Security Act.

DO NOT LET YOURSELF BE FOOLED. The aforementioned is deemed by the Mexican Social Security Institute as a wrongful or simulated practice and, therefore, because its final destiny can be traced, due to the fact that the payment implies an economic benefit for the worker, arising from a personal and subordinated service, and must be construed as a union matter end.

The Mexican Social Security Institute states that the following requirements are necessary to proof that the service provider service actually occur if:

a. The retributions are granted in a general basis.

b. The retributions are granted as set forth on the union contracts or law contracts.

c. Cash payments or transfer to workers accounts shall not be made unless they are referred to previous

services reimbursements; and

d. In all cases, the resources were granted for social purposes, set forth on the said contracts.

Pursuant Section 27, first paragraph of the Social Security Act, cash payments or transferred deposits on workers accounts, nominated as food stipends or housing concepts, shall integrate the base contribution wage.

Several service providers, acting as employers, make cash payments or transferred funds to the workers accounts, and label them in their accounting books and in the payment receipts, as food stipends and housing, without integrate them to the base contribution wage, breaching the provisions set forth on Section 27 of the Social Security Act.

DO NOT LET YOURSELF BE FOOLED.

If there is no evidence that such resources are allocated as food stipends or housing, it will be deemed as a wrongful practice. Therefore, the Mexican Social Security Institute states that the following requirements are necessary, in order that food stipends and housing do not integrate the base contribution wage:

a. If those concepts are granted for good and valuable consideration.

b. That there are no cash payments or transferred funds to the workers accounts.

c. That there is a proof that such resources are actually used for food stipends and housing ends.

Pursuant Section 27, first paragraph of the Social Security Act, cash payments or transferred deposits on workers accounts that do not comply with the requirements for pension programs, set forth by the National Commission for Retirement Savings (CONSAR), will integrate the base contribution wage.

Section 27, subsection VIII of the Social Security Act stipulates the following:

“Base contribution wage is integrated by the daily base cash payments, as well as allowances, payments, food stipends, housing, bonuses, commissions, retribution in kind and other retribution the worker receive for his or her work. Due to its nature, the following concepts will not integrate the base contribution wage,

…

VIII. Amounts provided for social purposes, referring to the ones given for pension funds, established by the employer or stemmed from union contracts. Pension programs shall only be considered if they comply with the requirements set forth by the National Commission for Retirement Savings (CONSAR), and

…”

Pursuant “The General Provisions governing the Pension Programs” issued by the National Commission for Retirement Savings (CONSAR), the amounts provided for the Electronic Registry Pension Programs, and that are established by the employer or stemmed by union contracts, shall not integrate the base contribution wage, provided that they meet the following requirements:

a. Benefits shall be granted in a general basis;

b. Amounts provided for the Electronic Registry Pension Programs, shall be dully registered in the employer’s accounting books.

c. Such amounts shall be directly provided by the employer.

d. Workers shall not receive any direct benefit, in kind or cash, until all the Electronic Registry Pension Programs requirements are complied; and

e. If the employer hires an administrator, the agreement to be executed shall stipulate that workers shall not receive any direct benefit, in kind or cash, until all the Electronic Registry Pension Programs requirements are complied.

DO NOT LET YOURSELF BE FOOLED.

To make cash payments or transferred deposits on workers accounts and label them in their accounting books and in the payment receipts, as payments for pension programs and not integrate them to the base contribution wage, is deemed as a wrongful practice, in case the requirements set forth by the National Commission for Retirement Savings (CONSAR) are not complied.