Choosing the wrong Employer of Record (EOR) in Mexico can expose your company to heavy fines, back payments, and even legal sanctions under the country’s strict outsourcing laws.

• While global platforms like Native Teams promise quick hiring through automation, most lack the legal registration and local expertise required to operate in Mexico.
  
  

• In contrast, Human Resources Mexico (HRM) is a fully REPSE-certified, Mexico-only EOR with over 16 years of continuous operation.
  
  

This comparison outlines the key differences between HRM and Native Teams — from compliance and payroll management to pricing and HR support, so you can hire the best EOR in Mexico safely and confidently.

1. REPSE Registration

Under Mexico’s 2021 outsourcing reform, any company offering Employer of Record (EOR) or specialized labor services must be officially registered in the REPSE (Registro de Prestadoras de Servicios Especializados u Obras Especializadas).

This registration confirms the company is legally authorized to hire and manage employees on behalf of foreign clients. Without it, the provider cannot lawfully operate as an employer in Mexico.

• Human Resources Mexico (HRM) is fully REPSE-registered, compliant, and regularly audited under Mexico’s outsourcing reform. HRM is a recognized Mexican Employer of Record that manages payroll, taxes, and benefits directly with the government.
  
  

• Native Teams has no active REPSE registration and therefore cannot legally operate as an employer in Mexico. It relies on fiscal intermediaries or undisclosed local partners to process employment, which fails to meet the legal and compliance standards of the 2021 reform.
  
  

This structure exposes companies to compliance risks, as only REPSE-certified employers like HRM are legally authorized to manage personnel in Mexico.

2. Local Presence

A legitimate Employer of Record in Mexico must have a physical presence and a local team that understands the country’s labor system, culture, and compliance procedures. A fiscal address alone does not make a company a true employer — it must have real operations and staff based in Mexico.

• Human Resources Mexico (HRM) has operated for over 16 years with a real, physical office and a fully bilingual HR, payroll, and legal team based in Mexico. Every team member is locally hired, educated, and trained, ensuring employees receive accurate, hands-on support that reflects Mexico’s labor culture and regulations.
  
  

• Native Teams has no physical office or in-country staff in Mexico. It operates through remote, platform-based systems and relies on fiscal entities or shell companies without genuine local operations. Its lack of local presence prevents it from offering real HR assistance or managing employee issues that require direct legal or cultural understanding.
  
  

This disconnect limits Native Teams’ ability to handle in-country compliance or provide employees with authentic, human HR support in Mexico.

3. Independent Contractor Services

Under Mexico’s Federal Labor Law, the defining factor of an employment relationship is subordination — when an individual works under the direction, schedule, and supervision of a company. Anyone performing these duties is legally considered an employee, not an independent contractor.

Misclassifying employees as contractors to avoid taxes or benefits violates both the Mexican Constitution and Social Security Law.

• Human Resources Mexico (HRM) strictly follows the Constitution, Federal Labor Law, and IMSS regulations. HRM does not offer or facilitate independent contractor hiring because it is illegal for any individual working exclusively under one company’s direction. All HRM hires are registered employees with full labor protections and statutory benefits.
  
  

• Native Teams promotes global contractor payment models that allow companies to “hire” individuals as freelancers through its platform. In Mexico, this practice is non-compliant when the person works full-time or under the client’s supervision. Such arrangements expose companies to legal penalties, retroactive benefit claims, and severance liabilities.
  
  

By adhering strictly to Mexican labor law, HRM ensures companies avoid misclassification risks — a protection that contractor-based models like Native Teams cannot guarantee.

4. IMSS & CFDI Compliance

In Mexico, every legitimate Employer of Record must register employees with the IMSS (Mexican Social Security Institute) and issue official CFDI (Comprobante Fiscal Digital por Internet) payroll receipts.

These digital tax documents are mandatory proof that salaries, taxes, and benefits are paid through a legally recognized Mexican entity. Without them, employment is considered non-compliant under tax and labor laws in Mexico.

• Human Resources Mexico (HRM) registers every employee with IMSS and issues CFDI payroll receipts directly through its fully authorized Mexican entity. This ensures that all contributions to social security, housing, and taxes are accurately reported and verifiable with Mexican authorities.
  
  

• Native Teams does not have the legal infrastructure to issue CFDI payroll receipts or manage IMSS registrations. Instead, it relies on payment intermediaries and fiscal partners to process salaries, which falls outside official Mexican payroll compliance.
  
  

This structure places client companies at risk of tax and labor violations, as only registered Mexican employers like HRM can legally issue CFDIs and manage payroll under the country’s laws.

5. Support Model

Employee care in Mexico requires genuine human interaction, not automated responses. Real HR support ensures that employees feel heard, protected, and properly guided through Mexico’s complex labor regulations — something no global platform can replicate.

• Human Resources Mexico (HRM) provides a 100% human-led service model. Every employee and client is supported by bilingual HR professionals physically based in Mexico. HRM personally manages payroll questions, benefits, compliance, and legal processes.
  
  

• Native Teams operates mainly as a digital platform, relying on automation and remote support. Without an in-country HR team, employees lack direct access to human guidance on legal matters, benefits, or workplace issues — a major gap when navigating Mexico’s detailed labor requirements.
  
  

Most importantly, with HRM, employees have guaranteed direct access to the HR services they need, ensuring transparency, trust, and consistent care throughout their employment.

6. Pricing Model

When choosing an Employer of Record in Mexico, clarity in pricing is essential. Many global platforms attract clients with “flat monthly rates,” only to add hidden costs later for services that are already included under HRM’s single transparent markup.

• Human Resources Mexico (HRM) applies one clear percentage-based markup on gross taxable compensation. There are no onboarding, FX, severance, or compliance add-on fees. Clients always know their exact total cost per employee.
  
  

• Native Teams promotes low fixed monthly pricing but introduces hidden charges for benefits administration, FX conversion, local payments, and compliance services. These add up quickly and reduce cost predictability for clients.
  
  

With HRM, you pay exactly what you see — a single, predictable cost that covers all aspects of legal employment in Mexico. Once all hidden charges are added, Native Teams' pricing can be 10–15% higher than HRM's all-inclusive rate.

7. Experience & Track Record

Operating legally and effectively in Mexico requires deep familiarity with its labor laws, tax systems, and cultural expectations.

Experience isn’t just about years in business — it’s about understanding how to navigate the country’s complex compliance landscape and maintain long-term relationships with both employees and authorities.

• Human Resources Mexico (HRM) has over 16 years of continuous operation as a Mexico-only Employer of Record. It’s trusted by international SMEs that need a reliable, human-centered partner focused exclusively on Mexican compliance, payroll, and HR management.
  
  

• Native Teams, founded in 2020, is a relatively new global employment platform with limited experience in Mexico. It operates across multiple countries but lacks the in-depth understanding of Mexico’s labor framework, tax obligations, and daily administrative realities.
  
  

When it comes to real-world experience and proven compliance, HRM’s long-standing presence in Mexico speaks louder than global startups still learning the system.

8. Severance Handling

In Mexico, terminating an employee must follow strict legal procedures under the Mexican Constitution and Federal Labor Law. If an employee is dismissed without cause, they are entitled to 90 days of severance pay.

Managing these obligations requires local legal oversight to avoid disputes or penalties.

• Human Resources Mexico (HRM) fully manages severance and final settlements in compliance with Mexican law. The HRM team handles all calculations, documentation, and government filings to ensure the process is legally correct. The client reimburses the severance amount, but HRM oversees every legal step to protect both the employee and the company.
  
  

• Native Teams lacks an in-country structure or legal framework to process severance payments under Mexican law. Without local HR or labor specialists, it cannot manage offboarding, severance, or employee claims in compliance with national labor requirements.
  
  

By handling the entire severance process locally and lawfully, HRM ensures a smooth, compliant termination experience that global platforms like Native Teams cannot provide.

9. Client Fit

Choosing the right Employer of Record depends on your goals in Mexico. Companies hiring long-term employees under Mexican law need a compliant EOR with real legal presence, while platforms offering quick global payments are better suited for short-term or freelance arrangements.

• Human Resources Mexico (HRM) is ideal for SMEs, mid-size, and enterprise clients seeking legal, transparent, and human-centered employment in Mexico. Every white-collar company that wants to hire employees legally in Mexico fits HRM’s model perfectly.
  
  

• Native Teams may suit freelancers or companies needing short-term international payments, but not those aiming for full legal employment in Mexico. Since it lacks REPSE registration and operates through intermediaries, using it for regular employee hiring exposes clients to compliance, tax, and labor law risks.
  
  

For any business serious about hiring in Mexico the right way, HRM remains the only fully compliant, human-led, and Mexico-exclusive EOR solution.

10. Legal Risks

Compliance in Mexico is not optional — it’s a legal obligation. Working with non-registered or platform-based providers can expose foreign businesses to severe financial and legal penalties.

• Human Resources Mexico (HRM) operates with zero legal risk. It is fully REPSE-registered and compliant with all applicable Mexican regulations, including Federal Labor Law, IMSS (Social Security), INFONAVIT, SAT (Tax Authority), and NOM standards. Every employee under HRM is lawfully registered, protected, and paid through compliant CFDI payroll.
  
  

• Native Teams presents high compliance risk. Its global contractor model violates Mexico’s 2021 outsourcing reform, which prohibits hiring subordinated workers through non-registered entities. Since it has no REPSE registration or legal employer presence in Mexico, it cannot assume liability for employee rights, taxes, or benefits.
  
  

Only HRM provides full legal protection for both companies and employees — ensuring 100% compliance, zero liability, and genuine peace of mind in Mexico.

Final Comparison Summary

Here’s a clear side-by-side look at how Human Resources Mexico (HRM) compares with Native Teams under Mexico’s strict labor, tax, and compliance framework:

For companies seeking legal, transparent, and fully human EOR support in Mexico, Human Resources Mexico (HRM) remains the safest and most compliant choice.

Get a custom proposal today and hire confidently with HRM.

FAQ

Is Native Teams legally registered to employ workers in Mexico?

No. Native Teams is not REPSE-registered and has no legal entity authorized to employ workers in Mexico. It operates through intermediaries or fiscal partners, which means it cannot issue valid payroll receipts or register employees with IMSS, making it non-compliant under Mexican labor law.

How does HRM ensure compliance with IMSS and CFDI regulations?

HRM is a fully REPSE-certified Mexican employer that registers all employees with IMSS and issues official CFDI payroll receipts. Every payment, benefit, and tax contribution is reported directly to Mexican authorities, ensuring total transparency and compliance with labor, tax, and social security obligations.

Can I legally pay a full-time employee in Mexico through Native Teams?

No. Paying a full-time employee through Native Teams is illegal under Mexican law. The “subordination” rule classifies anyone working under direction or schedule as an employee. Since Native Teams is not an authorized employer, such arrangements expose companies to penalties and back payments for benefits and taxes.

Why do global platforms face risk under Mexico’s outsourcing reform?

Mexico’s 2021 outsourcing reform bans labor subcontracting by non-REPSE entities. Global platforms like Native Teams rely on contractor models or intermediaries, which do not meet these requirements. This creates legal exposure for clients, as only certified EORs like HRM can legally hire and manage employees in Mexico.