On January 17, 2011 the Official Gazette of the Federation published the above-captioned food-aid law (“the Law”), brought into force as of the day following its publication.
First it should be noted that the Law does not compel employers to grant food aid or assistance, but rather it seeks to foster the giving of such assistance and regulate same in those cases where it is granted. Accordingly the Law aims at achieving that both the food assistance and actual groceries that some employers provide their workers, either voluntarily or by contract, fulfill the requirements of what is designated as a “correct diet”, i.e., a complete, balanced, varied, healthy and sufficient nutrition in accordance with the Mexican Official Standards issued by the Ministry of Health.
Under the Law, such food assistance may be implemented through meals provided to the workers in company canteens, restaurants and other similar locations, or through delivery of groceries (food aid in kind) or either printed or electronic meals/grocery coupons. The food assistance is not to be granted in cash or through any means other than those stated above.
Company canteens will be obliged to fulfill the requirements set forth by the Ministry of Health in the Mexican Official Standards (“NOMS”) that it may issue and which in turn authorize that Ministry to verify compliance therewith. As the case may be, employers must keep documentary controls that support and evidence the food assistance actually provided their workers/employees.
As an important rule, printed meal/grocery vouchers must comply with the following requirements:
1. Bear the legend, “This coupon may not be exchanged for cash either in whole or in part.”
2. State the date of expiration thereof.
3. Include the complete corporate/business name of the issuing company.
4. Explicitly define whether they are meals coupons or grocery coupons, as the case may be.
5. State the value of each coupon both in numbers and lettering.
6. Be printed in security paper.
On the other hand, electronic vouchers must fulfill the following requirements:
a) Be contained in a device like a magnetic-band card or any other electronic system.
b) Explicitly specify that it is a meal- or a grocery-coupon system, as the case may be.
c) Indicate the issuing company’s complete name.
d) Be used exclusively for the acquisition of meals or of groceries.
The Law expressly forbids exchanging the coupons for cash, alcoholic beverages or tobacco products.
Regarding tax incentives included to encourage employers to grant food aid to their workers/employees, the only actual novelty in the Law is its explicit acknowledgement as social welfare benefits of expenses incurred in providing canteen services, food aid in kind, and groceries/meals coupons.
Otherwise, the Law confines itself to referring the issues of deductibility for companies and exemption for workers to the provisions in the Income-Tax Law and the Flat-Rate Business Tax (IETU) Law. Concerning the latter, we note that the above-described benefits are not object of IETU
and that salaries taxable under the Income Tax Law may integrate a credit against the Flat-Rate Tax payable by the company, therefore a possible interpretation is that such salaries, whenever they fulfill the requirements for deductibility and exemption from Income Tax will also integrate part of the credit for salaries of the Flat Rate Business Tax.
The same is true for social security and national workers’ housing fund, as the Law refers the issue of exclusion of the food assistance to workers from the base salary for computing the related dues and benefits, to what is provided in the Social Security Law.
As penalties for non-compliance, the Law stipulates that failure by the employers of keeping the documents supporting the granting of food aid, shall be fined with up to the equivalent of two thousand times the general daily minimum salary in force in the economic zone of the workplace.
The contracting by the employer of an issuer of coupons that are in default of the above-detailed requirements shall be penalized with a fine of two thousand to six thousand times the general daily minimum salary in force in the economic zone of the workplace.
Under the Law, owners of establishments that fail to comply with the rules applicable to them, as, for instance, allowing the exchange of coupons for cash, alcoholic beverages or tobacco products, may be penalized with fines for the equivalent of six thousand to twelve thousand the general daily minimum salary of the respective economic work area.
Finally, recidivism is penalized by the Law with double the amount of the normal fines.
Goodrich, Riquelme y Asociados