Choosing the right Employer of Record (EOR) in Mexico can make or break your expansion plans. Mexico has strict labor laws, mandatory benefits, and tax requirements that must be followed without error. Partnering with the wrong provider — especially low-cost, non-compliant firms — can expose your company to audits, fines, tax liabilities, and even employee disputes.

This is why due diligence matters. The right EOR protects your business, ensures employees receive their full legal benefits, and keeps operations smooth.

In this guide, we shared the key questions every global company should ask before hiring an EOR in Mexico. Use this checklist to avoid mistakes and choose a trusted, compliant partner.

General Due Diligence Questions

1. Do you operate as the legal employer or use subcontractors?

Confirm whether the EOR is the direct legal employer in Mexico. Subcontracting creates compliance risks and weakens protections for the client company.

2. Do you have a proven track record and client references in Mexico?

Ask for client references and case studies. A reliable EOR should demonstrate years of experience and successful outcomes specifically within the Mexican market.

3. What is your pricing model, and are there any hidden fees?

Ensure the provider offers transparent pricing. Clarify whether costs are fixed or percentage-based, and confirm no hidden charges for payroll, setup, or compliance.

4. How strong is your in-country HR and compliance support?

Verify that the EOR has local HR experts in Mexico who understand labor laws, NOM standards, and compliance to avoid risks and ensure smooth operations.

5. What types of workers do you support (employees only, contractors, or both)?

Some EORs misclassify workers. Confirm they only hire employees under Mexican law and clarify contractor policies to avoid legal or tax issues.

6. What is your onboarding and offboarding process?

Ask how the provider manages contract signing, IMSS registration, and termination. A strong EOR ensures smooth, legally compliant onboarding and offboarding for employees in Mexico.

7. Do you provide employee support and responsiveness?

Check whether the EOR offers employee support, including payroll questions, benefits clarification, and HR assistance. Prompt responsiveness builds trust and improves employee satisfaction.

8. What technology or platform do you use, and how easy is it for clients?

Evaluate their technology for payroll, reporting, and compliance tracking. A user-friendly system improves transparency and simplifies workforce management for the client company.

9. How do you protect my company from compliance risks and employee disputes in Mexico?

Ensure the EOR takes full legal responsibility as the official employer in Mexico. This protects your company from penalties, payroll errors, or labor disputes by shifting compliance obligations to the EOR through IMSS registration, contracts, and indemnity clauses.

10. Do you offer additional services (benefits, immigration, HR add-ons)?

Clarify if the EOR supports extra services like benefits administration, immigration permits, or HR advisory. These value-added services may improve employee retention and compliance.

Mexico-Specific Compliance Questions

11. Do you issue valid CFDI payroll paystubs for employees in Mexico?

Ensure the EOR generates SAT-approved CFDI payroll receipts for every pay cycle. These XML paystubs validate wages, benefits, and deductions under Mexican tax law, protecting compliance and allowing employees to demonstrate income.

12. Do you issue CFDI service invoices for your EOR fees?

Confirm the EOR issues official CFDI invoices for its services to your company. This ensures your payments to the EOR are tax-compliant in Mexico and properly registered with SAT.

13. Are employees properly registered with IMSS?

Ask how the EOR manages IMSS registrations. Proper enrollment guarantees social security, healthcare, and retirement benefits while protecting the client company from penalties.

14. Are INFONAVIT contributions being made for each employee?

Verify that housing fund contributions (INFONAVIT) are calculated and paid correctly. Missing contributions can result in legal action and employee disputes.

15. How do you calculate and pay state payroll taxes (ISN), which vary by region?

Mexico’s ISN payroll tax rates differ by state. Ensure the EOR has processes to calculate and remit these payments accurately.

16. Can you show proof of ISR (income tax) deductions and remittances?

Request documentation showing how income tax is withheld and reported to SAT. Transparency reduces the risk of disputes or audits.

17. How do you guarantee compliance with 10% profit-sharing (PTU)?

Confirm the EOR manages PTU profit sharing each year, as required under Federal Labor Law. Employees must receive 10% of company profits.

18. Do you operate under your own Mexican entity, or via partners?

Ensure the EOR employs staff directly under its Mexican entity. Using third-party partners or shell entities increases compliance risks.

19. Do you maintain REPSE registration (mandatory under outsourcing reform)?

Ask if the EOR is properly registered with REPSE. This is required for legal compliance under Mexico’s 2021 outsourcing reform.

20. How do you ensure compliance with Mexico’s data protection law (LFPDPPP)?

Verify that employee data is managed securely and complies with Mexico’s Federal Law on Protection of Personal Data.

21. How do you manage audits and inspections from Mexican authorities?

Ask how the EOR responds to labor inspections, tax audits, or IMSS reviews. A strong provider will have clear processes and experience.

Termination & Employee Protections

22. How do you handle unjust termination claims in Mexico?

Ask how the EOR manages employee disputes. Unjust termination claims are common, and strong legal defense protects the client company from excessive liability.

23. Will you guide us before dismissals to avoid penalties?

A compliant EOR should provide legal guidance before termination. This ensures dismissals follow Mexican labor law and minimizes risks of penalties or lawsuits.

24. How is the 90-day severance managed in dismissals without cause?

Mexican law requires 90 days’ severance for terminations without cause. Confirm the EOR calculates and pays this correctly, including proportional benefits.

25. Do you manage cases where employees seek reinstatement instead of severance?

In Mexico, employees may demand reinstatement rather than compensation. Check if the EOR has procedures to manage this legally complex situation.

26. How do you calculate additional liabilities such as overtime, commissions, back pay in disputes?

Ensure the EOR accounts for extra liabilities like unpaid overtime, bonuses, commissions, or back pay, which can significantly increase settlement costs.

Service & Transparency Questions

27. Are there any hidden charges, deposits, or setup fees?

Confirm whether the EOR in Mexico requires deposits or setup fees. A transparent partner should only charge for ongoing services without hidden costs.

28. How quickly will you deliver a proposal and service agreement (e.g., 48 hours)?

Speed matters when hiring in Mexico. Ask how fast the provider delivers a formal proposal and agreement to avoid delays in onboarding employees.

29. Do you provide real human support for client companies and employees?

Many providers only focus on platforms and payments. A reliable EOR should guarantee employees have access to the HR services they need — from payroll questions to benefits and compliance issues. This ensures both your company and your employees feel supported by real people, not just software.

30. Can you support employees with resources like office space, cars, laptops if needed?

Check if the EOR can facilitate employee resources beyond payroll, such as office space, equipment, or allowances, depending on the client company’s needs.

31. Are your fees fully transparent, reflecting compliance and premium service rather than competing on cost?

Low-cost providers often skip compliance. Ensure the EOR offers clear pricing that reflects legal obligations in Mexico while prioritizing employee protections.

Strategic Fit Questions

32. Can you support a future transition from EOR to our own Mexican entity?

Ask whether the EOR can help transfer employees seamlessly when your company establishes its own Mexican entity, ensuring compliance and continuity.

33. Do you have industry-specific expertise in Mexico (e.g., tech, manufacturing, finance)?

Different sectors face unique compliance needs. Confirm the EOR understands your industry in Mexico and can tailor HR and payroll support accordingly.

34. Can your services scale as we grow from small pilot teams to larger operations?

Expansion in Mexico often starts with a pilot team. Ensure the EOR can scale services to support larger, long-term operations as your business grows.

Why Human Resources Mexico is the Best EOR in Mexico?

Human Resources Mexico stands out because we focus 100% on Mexico, unlike global providers that spread across many countries. With 16+ years of proven expertise, third-party compliance audits, and strict adherence to Mexican labor law, IMSS, aguinaldo, and PTU profit sharing, we provide unmatched reliability.

We never charge deposits or setup fees, and our transparent pricing reflects full legal compliance and premium service. With Human Resources Mexico, client companies gain a trusted partner for safe, rapid, and compliant expansion.

Get your custom proposal today and see how we simplify HR, payroll, and compliance in Mexico.