Accrued Expenses and Other Liabilities

6 Months Ended

Jun. 30, 2022

Accrued Expenses and Other Liabilities

Accrued Expenses and Other Liabilities

9. Accrued Expenses and Other Liabilities

At June 30, 2022 and December 31, 2021, accrued expenses and other liabilities consisted of the following:

	As of		As of
	June 30,		December 31,
	2022		2021
	(in thousands)
Accrued royalty payments	$	2,145	$	1,743
Employee profit sharing obligation		2,113		1,888
Other payables		1,331		1,100
Total accrued expenses and other current liabilities	$	5,589	$	4,731
Accrued non-current labor obligation	$	1,105	$	920
Deferred stock unit ("DSU") compensation liability		671		206
Other long-term liabilities		160		826
Total other non-current liabilities	$	1,936	$	1,952

On April 23, 2021, a decree that reforms labor outsourcing in Mexico was published in the Federation’s Official Gazette. This decree amended the outsourcing provisions, whereby operating companies are no longer able to source their labor resources used to carry out the core business functions from service entities or third-party providers.

Under Mexican law, employees are entitled to receive statutory profit sharing (Participacion a los Trabajadores de las Utilidades or “PTU”) payments. The required cash payment to employees in the aggregate is equal to 10% of their employer’s profit subject to PTU, which differs from profit determined under U.S. GAAP. Prior to 2021, the Company was not subject to PTU payments, as it had been sourcing its labor resources through a third-party service provider.

As a result of the legislation, as of June 30, 2022, $2.1 million was recorded for PTU current liabilities. Additionally, $1.1 million is recorded for statutory employee severance benefits in other long-term liabilities.