What will Mexican employees spend their employee profit sharing on? The recent OCC “Labor Thermometer” survey, conducted from May 3 to 10 with the participation of 2,901 workers in Mexico, revealed that 39% of the respondents intended to use their PTU for the payment of debts, while 29% intend to save it or invest it. Only 5% has the intention of using it for vacations or leisure activities.
Profit sharing, whose official name is Employee Participation in Company Profits (PTU), is a right established by Article 117 of the Federal Labor Law. This benefit means that employees receive 10% of the tax profits obtained by the company in the previous year, based on their time on the job and salary.
PTU distribution takes place in May for legal entities and in June for natural persons. Nevertheless, legislation establishes limits for this distribution, which can reach up to three months of salary or the average of the PTU paid in the last three years, whichever is most beneficial to the worker.
The relevance of PTU in job satisfaction was also addressed in the survey. 54% of the respondents consider that this benefit increases their job satisfaction, while 29% believe the opposite.
Additionally, 8% believe that the PTU increases productivity, while 8% think that it reduces employee turnover. However, even though the PTU is a labor right in Mexico, the OCC survey showed that 27% of all workers said that they would not receive this payment.
Which companies are exempt from paying PTU?
Labor lawyer Óscar de la Vega explains that companies that are exempt from paying PTU are newly created companies in the first year of operation, companies engaged in the production of a new product during their first two years, newly created companies in the extractive industry during the period of exploration, and private assistance institution acknowledged by law to conduct non-profit humanitarian acts, such as Montepío Luz Saviñón and Nacional Monte de Piedad.
The Mexican Social Security Institute and decentralized public institutions with cultural, assistance or charitable purposes are also exempt. Workers have a right to receive PTU if they work a minimum of 60 days in the year and the company had profits above 300,000 pesos. Partners, stockholders, directors and general managers are not entitled to this payment.
“Companies have the obligation of communicating the results of the fiscal year to the employees, even if their profits are zero. Even though this information is private and cannot be publicly disclosed, all workers have the right to see the company’s annual statement”, the lawyer emphasizes.
Article 121 of the Federal Labor Law establishes that the company must provide the annual statement within 10 days of filing it. The tax addendums filed with the Department of Finance and Public Credit will be available to the workers at the company’s offices for 30 days.
“Currently, many organizations make this information available to the workers through their intranet, where workers can have access using their personal code”, De la Vega adds. The Labor Law does not specify the means that can be used by companies to disseminate the company’s profits. In addition to the intranet, others opt for notifications or videos.
What can a worker do if he had a right to receive PTU and did not receive it?
If a worker did not receive his percentage of profits, and he had a right to, there are several options for him to take action, says the lawyer.
If there is a union, workers can base their claim on Article 450 of the Federal Labor Law, which establishes that the employer’s refusal to provide a copy of the statement can be grounds for a strike.
In the absence of a union, there is a mixed PTU commission in each organization. This commission can review the annual statement and raise objections if it considers that the information is incorrect and that a fair division of the profits was not made. The Department of Finance must review the statement to determine whether the information is correct and issue a decision that the employer must comply with.
“Workers can also appeal to Labor Inspection, who is responsible for monitoring compliance with these provisions. A majority of employees can request a copy of the annual statement from the Department of Finance and request a revision, but I insist, in must be the majority, not a single employee”, the lawyer concluded.
