Agricultural Companies at Risk Due to Labor Reforms: COPARMEX

The Mexican Employers' Confederation (COPARMEX) has warned that SMEs could experience financial hardship due to changes made to the Federal Labor Law and the Social Security Law. "We believe that the laws and their implementation put SMEs in the agricultural sector at serious risk of financial hardship, non-compliance and vulnerability," said COPARMEX in a press release.

President of COPARMEX, Jose Medina Mora, said that when the law was passed, legislators did not consider the opinion of agribusiness stakeholders nor farm workers. "This is a delicate issue because the reform was published (Jan. 24) and was implemented the next day – companies were not given time to adapt to these new laws," said Medina.

Medina says these laws place companies and employers in a state of vulnerability because it is impossible to adapt their operations, hire personnel, and make investments to comply in such a short time.

Reforms Will Substitute IMSS Services

Changes to the laws add clauses that could jeopardize agricultural companies’ financial scheme, for instance, offering IMSS services to workers’ families if there are no nearby IMSS facilities. In addition, there are other pressing issues to be discussed. For example, some employers are expected to manage services that correspond to institutions like SEP and DIF.

"Certain obligations such as providing housing with land for raising barnyard animals, food for workers, medical assistance and prescriptions for workers and their families, life insurance, as well as disability payments for up to 90 days, are out of place and out of proportion," said Medina Mora.

"Regarding NOM-038-STPS-2023, we regret that the Ministry of Labor and Social Welfare has missed the historic opportunity to include 16- and 17-year-olds into the agribusiness formality," said COPARMEX.

Medina Mora explained these youngsters are already working informally in the agribusiness sector; they are paid in cash and do not receive social security benefits, profit sharing, bonuses, overtime pay, and basic legal assistance, leaving them in vulnerable situations.

"Individual work contracts should include adequate rest and break times, and mechanisms should be established to provide labor rights information to farm workers, as well as information regarding what social services authorities should be contacted in case their rights have been undermined,” said Medina Mora.