Government of Mexico fights abusive outsourcing

The federal government of Mexico highlighted that it combats abusive outsourcing as part of the ongoing labor reform.

As a result, under the modalities of insourcing and outsourcing, 830,000 workers were hired, who have already been transferred and recognized by the companies for which they actually work.

According to data from the IMSS, increases were observed in the registration of salaries between 15 and 32%, in these cases.

On April 23, 2021, the Federal Labor Law was modified to limit the use of this type of contract.

With this reform, only certain specialized services and the execution of certain specialized works can be subcontracted, and said services must be provided by natural and legal persons who meet certain requirements and are registered with the Ministry of Labor and Social Security.

Outsourcing

Likewise, from September 1, 2020 to June 30, 2021, the following results were obtained:

• The reform proposal to the Federal Labor Law regarding this form of contracting was prepared, for this purpose, 125 meetings were held with the participation of the labor and business sectors, in which a consensus was reached regarding the scope of the reform.
• As a result of the above, on April 23, 2021, the Decree was published in the Official Gazette of the Federation through which various labor, tax, social security and housing regulations were amended, among which the following stood out:

• • • • The subcontracting of personnel is prohibited. This occurs when a natural or legal person provides or makes its own workers available for the benefit of another.
      • The subcontracting of specialized services or works that are not part of the corporate purpose or the predominant economic activity of the beneficiary of these is allowed.
      • Employment agencies may participate in the recruitment, selection, training and training of personnel, but in no case will they be considered employers, since this character belongs to those who benefit from the services.
      • There will be joint and several liability on the part of the natural or legal person that subcontracts with a contractor that fails to comply with the obligations arising from the relationships of the workers.
      • The creation of a registry and register for companies that outsource services or specialized works, which must demonstrate that they are up to date with all tax and social security obligations.