Labor reform proposal in Mexico

By Adina Moloman

Sources: The Mexican Business Coordinating Council, (CCE), Global Post, Forbes

The last month a proposal to reform Mexico’s Labor law, which is about legalize subcontracting (outsourcing) hiring and hourly payment has brought controversial reaction to different Interest groups around Mexico.

The Labor reform proposal was passed through the Chamber of Deputies with approval last month and must be ratify by the Senate by the end of this month.

Mexico Government is managing a policy to open its economy to foreign investors.

The government argument to propose flexible work rules is that these will boost employment.

According to Mexican Maquiladora representatives, the Labor Act related to flexible hiring and work-per-hour will provide a benefit for every Mexico Manufacturing Company. With a more flexible labor law, it will make it easier for transnational companies to subcontract workers. So far subcontracting (outsourcing) hiring was a practice in Mexico but was consider illegal. This new law will provide with judicial certainty for some subcontracting operations, which were already common among different national and transnational companies.

One of the arguments used in favor of workers is that payment per hour will encourage students to join the labor market during their free time.

Workers around Mexico are seeing in these proposed Labor low the lack of adequate labor standards with more disadvantages than advantages by not having a permanent contract. The impact that will cause the new labor law is instability and job rotation, mostly because subcontractors are held responsible for working conditions.

The effects on Mexico’s workers with a labor force more flexible is the increasing wage inequality and fewer rights at work.