López Obrador celebrates agreement on labor subcontracting in Mexico

RIO DE JANEIRO, BRAZIL – The President of Mexico, Andrés Manuel López Obrador, celebrated this Friday the reform to the law and eliminated subcontracting to workers country because with this, he said, it will be possible to put an end to abuses.

“It is an excellent agreement, excellent news,” said the president during his morning press conference from the National Palace, accompanied by businessmen and senior officials.

He indicated that with these reforms, “the simulation, the subcontracting that in almost all cases was carried out not to recognize the workers’ rights,” has been set aside.

At the beginning of the week, and after much tug-of-war with the business community, the Mexican Senate approved the bill that reforms various labor subcontracting or “outsourcing” laws in the private and public sectors.

The President explained that eight laws were modified and assured that these changes will serve “to put an end to the abuse of outsourcing” and establish clear rules not to affect workers.

He emphasized that the reform had the participation of the labor and business sectors.

He pointed out that this law will apply to the private and public sector “there will no longer be subcontracting in the Government”.

The President said that more profits would be distributed if the law is enforced, amounting to more than 154,000 million pesos (7,737 million dollars).

He indicated that this reform would be published today in the Official Gazette of the Federation (DOF), and companies will have 90 days to regularize.

THE REFORM

Luisa María Alcalde, Secretary of Labor and Social Welfare, commented that a historic agreement was reached between the sectors, eliminating illegal subcontracting and giving up to 90 days for profit sharing.

He explained that the practice of subcontracting, in addition to violating workers’ rights, damaged public finances.

“There was unfair competition among companies,” and there was an impact on social security institutions.

He explained that the changes in the law prohibit the subcontracting of personnel. However, it is authorized for specialized services and works.

Also, the companies dedicated to outsourcing must have a mandatory registration before the Ministry of Labor. Likewise, the companies that receive specialized services must respond to the workers in case of non-compliance.

Also, tax simulation will be avoided, and penalties will be stiffened in case of non-compliance.

Likewise, he explained that a term of three months was established for the companies to regulate themselves. Every three years, they will have to update their registration before the federal agency.

He also said that the Federal Law of Workers in the Service of the State was also reformed so that subcontracting no longer exists in the government.

Regarding profit sharing, he indicated that article 127 of the Federal Labor Law was reformed, which will result in a 154% increase in this item, and practically all sectors will benefit.

Carlos Salazar, president of the Business Coordinating Council (CCE), emphasized that the agreement to eliminate subcontracting is unique and an example of how the country’s problems can be addressed with dialogue, debate, information, and transparency, achieving the best decisions.

Fernando Salgado, general secretary of the Confederation of Mexican Workers (CTM), said that it is an important agreement for the sector because it updates its rights commitments.

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