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How the REPSE affects companies that subcontract specialized services

Since the labor reform published in April 2021 in Mexico, the subcontracting landscape has changed radically. Today, any company that hires specialized services must verify that its suppliers are registered in the Registry of Specialized Service Providers or Specialized Works (REPSE) , or risk facing severe penalties.

In this article, we explain what REPSE is, how it affects companies that subcontract, and what steps they must follow to operate safely and legally

What is REPSE?

The REPSE is an official registry administered by the Ministry of Labor and Social Welfare (STPS), where all companies that offer specialized services or specialized works to third parties must register.

This registration became mandatory after the reform that prohibited the subcontracting of personnel , allowing only the contracting of specialized services that are not part of the corporate purpose or the client’s predominant economic activity.

You can visit the official REPSE website directly here.

Who is affected by REPSE?

It affects both:

  • Specialized service providers , who must register to operate legally.
  • Contracting companies , which are required to verify that their supplier is registered with the REPSE before signing a contract .

What happens if I hire a company that is not in the REPSE?

If a company hires specialized services from a supplier not registered with the REPSE , the consequences can be serious:

  1. Loss of tax deductibility of expenses before the SAT.
  2. Fines of up to 4.5 million pesos , according to article 1004-C of the Federal Labor Law.
  3. Joint liability towards the supplier’s employees.
  4. Reputational risk and problems with audits by the Mexican Social Security Institute (IMSS), INFONAVIT, or SAT.

Source: Federal Labor Law – Subcontracting Reform

What is considered a specialized service?

A specialized service is one that is not part of the corporate purpose or core business of the company that hires it. For example:

  • A software company may hire cleaning, security, or maintenance services.
  • But you can’t outsource programmers if your core business is software development.

This implies that companies must carefully review their corporate purpose in the articles of incorporation and their SAT classification .

Additional obligations for subcontracting companies

In addition to the REPSE, companies that hire specialized services must:

  • Verify that the supplier has a current registration with the REPSE.
  • Sign a detailed contract with the service specifications.
  • Request periodic reports on compliance with tax, social security, and labor obligations.
  • Submit a quarterly report to the IMSS and INFONAVIT.

Review the STPS guide on specialized services to learn more.

How can risk be mitigated?

If your company outsources specialized services, here are some key steps:

  • Check the REPSE search engine to see if your provider is registered.
  • Check your corporate purpose and SAT classification to avoid activity conflicts.
  • Consider working with companies that, in addition to complying with the REPSE, can advise you on ensuring full compliance with the law.
  • Establish an audit and document control system for your suppliers

Conclusion:

The REPSE not only represents an administrative change, but also a structural shift in how companies in Mexico manage subcontracting . The current rules aim for greater formality and transparency, but they also impose new obligations that, if ignored, can be costly.

Compliance with the REPSE is not only mandatory, but also strategic for avoiding sanctions, improving corporate reputation, and maintaining sustainable labor relations.