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News > Mexico

AMLO To Regulate Outsourcing Despite Private Sector Refusal

  • AMLO seeks a deeper transformation in terms of workers' rights to social security, housing, and taxes.

    AMLO seeks a deeper transformation in terms of workers' rights to social security, housing, and taxes. | Photo: EFE/ Presidencia Mexico

Published 12 November 2020
Opinion

The measure will heavily impact the private sector as it is estimated that over 4.6 million workers are hired via outsourcing.

Mexico's President Andrés Manuel López Obrador presented a bill to regulate outsourcing on Thursday, which aims to prevent abuses carried out by employers through this hiring mechanism.

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The bill will regulate the outsourcing of staff, specialized services, and employment agencies. The measure will heavily impact the private sector as it is estimated that over 4.6 million workers are hired via outsourcing.

Outsourcing is the practice of having certain job functions done outside a company instead of having an in-house department or employee handle them; functions can be outsourced to either a company or an individual.

The authorities highlighted that this mechanism led to widespread abuse and exploitation of workers since employers use it to violate the worker's rights to severance pay, maternity leave, or social security in case of accidents. One of the most popular practices is to dismiss workers in December rehiring the following year, which damages seniority rights.

"We are committed to social and labor justice."

"The most important thing is that it allowed us to understand a modus operandi: for example, there is a business group that has 250,000 workers who are not engaged in any productive activity but instead transfer staff to other companies to avoid responsibilities," the president explained.

On the other hand, the private sector refused the measure. President of the Employers' Confederation of the Mexican Republic (Coparmex), Gustavo de Hoyos turn to Twitter to say that the bill "betrays the commitment to build this legal change based on consensus with the private sector."

However, AMLO seeks a more profound transformation in workers' rights to social security, housing, and taxes. "The comprehensive reform aims to cut the tentacles of the subcontracting octopus and harmonize laws: federal labor law, IMSS law, Infonavit, the tax code, income, tax law, and VAT law," the President remarked.

    

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