On March 25, 2022, the Ministry of Labor and Social Welfare (STPS) published on its official website, the Guide to comply with the obligations in terms of profit sharing.

Derived from the reform to the Federal Labor Law (LFT) published in the Federal Official Gazette (DOF) on April 23, 2021, article 127 of the same was modified. The reform to this article was with the aim of avoiding discretion in the distribution of profits, as mentioned by the STPS, as well as establishing the precise rules that do not affect the business sector and that benefit employees. Therefore, with this reform, employees are expected to receive an average of the equivalent of 57 days of salary for profit sharing.

Making it clear that the current rules regarding the distribution of profits remain in their same terms, since there was no additional change in this regard, it is reiterated that the percentage of participation for employees in the profits of the companies shall correspond to 10%. on taxable income, as determined in the corresponding Resolution published in the DOF on September 18, 2020 issued by the National Commission for the Distribution of Profits in Companies.

Derived from the foregoing, based on article 123 of the LFT, the distributable profit will be divided into two equal parts: (i) the first, will be distributed among all the employees taking into consideration the number of days worked during the year; and (ii) the second, will be distributed in proportion to the amount of wages earned for the service provided during the year.

A maximum of 90 days of the employees’ salary is established, if the distribution of profits is greater than 90 days. The foregoing, unless the average distribution of profits paid by the company to the employees, according to their category, in the last three years is greater than 90 days. In the latter case, said amount shall be paid averaged as it is a higher amount and of greater benefit to the employee.

It is worth commenting that this is the first year that employees are paid the distribution of profits by productive companies, that is, eliminating outsourcing. Now, we will have to wait for all the companies to pay the employees 10% of profit, under the factors of days and pesos, and for the result to be equal to or greater than 57 days, which, on average, are established in the STPS guide.

At Trejo Gutiérrez Abogados, we have a group of experts in labor matters with more than 20 years in the market. Please do not hesitate to contact us, we will be glad to provide the personalized legal advice that you require.