OUTSOURCING

IN LATIN
AMERICA
6 Key Questions to Consider
Are there any specific laws or Based on legislation or case law, in your country,
regulations in your jurisdiction regarding is there joint responsibility between the company
that hires the service and the outsourcing company
outsourcing contracts? that hires the personnel?

Y OU
AN T

SO
NG COMP

URCI G CO
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RI
M
HI PA
NY

LAWS & REGULATIONS

ARGENTINA ARGENTINA YES

YES Act. 20.744
This mainly occurs when there is an
outsourcing of the principal activities
of the company (Act 20.744).

BRAZIL
CHILE YES
YES Law Number 6,
019/74 regulates The company that hires the service has
subsidiary responsibility for all the
outsourcing contracts
labor and social security obligations.
for a period of up to 90 days. There is several liability in the case that
it has not regularly checked the
fulfillment of these obligations.
NO BRAZIL
BRAZIL The company hiring the
CHILE service will either be solely
NO. For a period over COLOMBIA YES responsible or have
YES Chilean Labor Code 90 days, no law, subsidiary responsibility.
Art. 183A-183AE just precedent (#331). In the case that the services
rendered are similar or inherent to
the normal activities of the
contracting party, they will be jointly
and severally liable for all labor
obligations.
COLOMBIA
MEXICO NO. However, for all legal
purposes companies
YES The Federal Labor should be considered MEXICO YES
Law, Art. 12-14 & Art. 15(A-D) independent contractors,
a concept that is Both Social Security law and Labor
expressly regulated. law provide for joint liability
under certain circumstances.

PANAMA
PANAMA YES
YES Art. 94 & 95 of the
Labor code For salaries, severance benefits and
indemnities corresponding to the
period during which the employee
was outsourced.

PERU
PERU YES
YES
Law No. 29245 • For the payment of the labor benefits
Legislative Decree No. 1038 and Social Security obligations during
Supreme Decree No. 006-2008-TR the time of assignment.
• There is also a possibility to become
joint debtors in front of the unpaid
employee and pension authority.
What are the characteristics that an What is the minimum content of an
outsourcing company must have in outsourcing contract in your jurisdiction?
order to operate in your country?

?+
%
?

ARGENTINA MINIMUM CONTENT NO MINIMUM CONTENT

The agency has to obtain approval from the Ministry of Labor.

The company has to verify labor compliance of the outsourced company on a BRAZIL
monthly basis.
i) Supply proof of compliance with the
mandatory employment and social
security rights;
BRAZIL (ii) hold the company hiring the
services harmless in case of labor
Services of a temporary nature (up to 90 days) must be registered with the Labor Ministry. claims;
(iii) provide the possibility for the ARGENTINA
Services which are not temporary (exceeding 90 days) do not require registration.
company hiring the services to However, it is recommended
withhold payments if the outsourcing to include the basic elements
company is not in compliance with its of an employment contract.
obligations, and the company hiring
CHILE the services sees a risk of being
required to make payments under
Services Subcontracting Regime: no specific requirements subsidiary liability.
COLOMBIA
Provisory Supply of Personnel:
companies should be legal entities constituted with the sole purpose of making However, it is customary to
employees available for transitory or occasional tasks. include the basic content of a
They have to be registered at the Labor Authority, cannot have an ownership relation CHILE commercial services
with the users, and have to constitute a guarantee of at least 250 UF at the Labor agreement.
Authority, US$ 12,000 - approximately. Under the "Provisionary Supply of
Personnel Regime" the contract must
contain the provisions according to
article 183-N of the Labor Code which
COLOMBIA are basically, among others, the mention MEXICO
of the legal grounds for the supply of
However, having a signed
The company must verify that it meets the main requirements to become an personnel (such as extraordinary events,
independent contractor. outsourcing agreement is
period of initiation of activities,
strongly recommended.
occasional increases of the activities,
The company must be able to verify the existence and legal capacity of the outsourcing
company. urgent works, medical leaves, maternity
leaves, vacations, etc) and the term for
the provisory supply of employees
(contracts in general cannot exceed 180 PANAMA
MEXICO days). If the above conditions are not
However, must include the
fulfilled, employees hired for
provisionary services can be deemed basic elements of an
The company has to be incorporated as any other corporation or civil partnership.
employees of the company that hired employment contract.
The company must have sufficient means in order to be able to comply with its the service.
obligations as an employer; otherwise it will be considered an intermediary and the
labor liability will shift to the client or recipient of the services.

PERU CHILE
No minimum content under
PANAMA Contract must contain a clause “Services Subcontracting
regarding the purpose of the Regime”.
Employees require a license granted by the Ministry of Labor. agreement, in which it shall be
established that the services provided
by the outsourcing company will be
performed under its own supervision,
PERU cost and risk; and under its own
Outsourcing companies must meet four conditions: direction, control and direct and
i) assume the services rendered by its own account and risk; ii) have their own financial, exclusive supervision and
technical and material resources; iii) be responsible for the results of their activities; and subordination.
iv) employees must work under full subordination.
Are there any prohibited activities or
services for an outsourcing company
operating in your country?
NO ARGENTINA
Services that are related to the
substantial activities of the business
NO BRAZIL
Services that are related to the
substantial activities of the business
(Precedent Rule # 331 of the Superior
Labor Court).
PERU YES
No restrictions
NO CHILE
If operating under the “Provisory
Supply of Personnel Regime", the only
activity or service that can be hired is
the provisory supply of personnel
(employees) for transitory or
occasional tasks.
CHILE YES
There are no restrictions if
operating under the “Services
Subcontracting Regime”.
NO COLOMBIA
Activities that are related to the
substantial activities of the business
when they are hired through any
form or entity that violates the
fundamental or the labor rights of
PANAMA YES employees (Law 1429, 2010).
No restrictions
NO MEXICO
• No services related to the
substantial activities of the business
• Services cannot cover the entirety of
the company's activities
• Services cannot be similar or
analogous to the activities
performed by the company's
employees
Recommendations to companies that are using
outsourcing services in your jurisdiction in order to
prevent claims from outsourced employees:
ARGENTINA
Choose an outsourcing company that is
well known in the market and that can
credit multiple clients.
Have a comprehensive outsourcing
contract in which indemnities are clearly
stated.
Demand that all employees that are
working for the project are correctly MEXICO
registered as employees.
Assess current services agreement in
Execute periodic controls on  compliance
of the outsourced company.
order to verify if recent reforms to
Mexican Labor Law are complied with
and also to avoid undesired contingencies
such as being considered as joint
BRAZIL employer with outsourcing companies.
Select the outsourcing companies Enter into outsourced agreements only
carefully. with real independent services providers.
Have the agreement drafted in a way
that the hiring company has protection
against subsidiary or direct liability if
the outsourcing company is deemed PANAMA
illegal. Comply with all the legal provisions.
Conduct a due diligence report before Verify that the Ministry of Labor has
entering into an outsourcing agreement. granted the correspondent authorization.
If interested in an outsourced employee
after a period of 2 months, employer
CHILE should hire employee directly.
Have an attorney verify or draft all legal
In order to avoid being seen as the
documents.
direct employer under the law, the
Establish the outsourcing contract in
hiring company should avoid giving
writing.
any orders or instructions to the
employees regarding the manner in
which their job is performed.
PERU
COLOMBIA Verify the company meets the
It is highly recommended to request a requirements discussed in Question 3 of
Labor Compliance Insurance policy from this document.
Ensure appropriate risk insurance and
the contractor.
Avoid the following practices: health and safety measures are taken.
• Supplying facilities or equipment to
the outsourcing company.
• Make all the decisions with regard to
the services rendered.
• Give all the instructions and guidelines
in order for the outsourcing company
and its employees to follow.
• Hire outsourcing companies that only
render services to the contracting
company on an exclusive basis.
• Enter into a services agreement which
only purpose is the supply of employees.
• Hire services in which the form of
compensation is calculated by the
salaries of the employees rendering
services.
GLOBAL REACH LATIN AMERICA

ARGENTINA COLOMBIA

Funes de Rioja & Asociados Brigard & Urrutia

Av. Eduardo Madero 942 Calle 70A N°. 4 - 41
C1106ACW Bogotá - Colombia
Ciudad Autónoma de Buenos Aires, Argentina
T +571 346 20 11
T +54 11 43484100 F +571 310 06 09 | +571 310 05 86
E estudio@funes.com.ar E servicioalcliente@bu.com.co

MEXICO
BRAZIL
Basham, Ringe y Correa S.C.
Veirano Advogados Paseo de los Tamarindos N°. 400
Floor 9 Bosques de las Lomas
Av. Presidente Wilson, 231 23º floor
05120 México, D.F. Mexico
Rio de Janeiro
RJ 20030-021 Brazil T +52 55 5261 0442
F +52 55 52 61 0496
T +55 21 3824 4747
E basham@basham.com.mx
F +55 21 2262 4247
E luiz.migliora@veirano.com.br

PANAMA
CHILE
Arosemena Noriega & Contreras
Philippi, Yrarrázaval, Pulido & Brunner Tower Financial Center, 16th Floor
50th Street and Elvira Mendez
El Golf 40
P.O. Box 0832-01091
piso 20 Las Condes Santiago
Panama, Republic of Panama
C.P. 7550107 Chile
T +507 366 8400
T +56 2 364 3700
F +507 366 8457
F +56 2 364 3796
E anc@anorco.com.pa
E philippi@philippi.cl

PERU

Estudio Olaechea
Bernardo Monteagudo 201, San Isidro
Lima 27, Peru
T +51 1 219-0400
F +51 1 219-0420 | +51 1 219 0422
E postmaster@esola.com.pe
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