Bonds
Labor Contingency
A Labor Contingency Bond guarantees that the contractor will fulfill all labor and social security obligations generated during the execution of a contract, both to employees and the corresponding authorities.
This type of bond protects the beneficiary (client/contracting party) against potential lawsuits, debts, or claims arising from their indirect relationship with the principal’s personnel. It ensures compliance with obligations such as salaries, employer-employee contributions, benefits, and severance payments.
When is it required?
It is commonly requested in contracts involving personnel outsourcing or subcontracting, especially in sectors such as:
- Construction and Infrastructure
- Services: cleaning, security, maintenance, logistics, and outsourcing
- Staffing: hiring temporary or project-based personnel
- Government contracts
It may also be required by the IMSS (Social Security), INFONAVIT (Housing Fund), or through specific clauses in contracts with public agencies and private companies.
Requirements for Issuance
To issue a labor contingency bond, the surety company will evaluate the profile and capacity of the principal. The following are required:
- Legal Documentation: Articles of incorporation, powers of attorney, official ID, proof of fiscal domicile, and tax status certificate.
- Technical and Financial Solvency: Tax returns and financial statements (certified, audited, or internal) for the last two fiscal years, as well as updated statements no older than three months. Credit history, company CV, and employer registration with IMSS.
- Base Contract: The underlying agreement establishing the relationship with the beneficiary and the services provided.
Additional Collateral (based on risk):
- Joint and several guarantees from partners
- Joint obligations from third-party companies
- Real estate property as collateral
