In a decision by the Supreme Court resolving two conflicting criteria by lower federal courts, published September 4th 2020, it was confirmed that wage payment stubs or receipts that contain the digital certification granted by the Internal Revenue Service ( Servicio de Administración Tributaria, or SAT for its Spanish acronym) need not be hand signed by employees to serve as evidence of payment for wages and or any labor benefit paid by employer.
This decision comes as confirmation of the Federal Labor Law, that included in its reformed article 101, the validity of the digital certification of paystubs as legal proof of wage payments, in leu of printed and singed receipts by the employee.
While we are still strong advocates for the physical execution of key documents such as the employment contract, we welcome any measure to reduce unnecessary use of paper, storage space and work time interruption.
As per Mexican tax laws, the digital certificate is a measure that grants both the employer and the employee certainty in the transaction, as it also serves to simultaneously integrate the electronic file that the SAT keeps for both parties and keeps track of payments and income that compose each party´s yearly tax filings and returns.
Through this decision, Mexico´s supreme court supports a paperless environment in a tendency to have printed receipts become the exception rather than the norm. For companies that have employee headcounts above 100, it will also prove to be an administrative relief by not having to keep years of storage and perhaps personnel dedicated to overseeing execution of receipts by employees.
For further detail on the Court´s resolution or for any labor and employment need your company should have, do not hesitate to contact one of our offices.
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