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News Article

Outsourcing Regulation, Not Prohibition: Industry Associations

By Jan Hogewoning | Thu, 12/10/2020 - 13:26

The National Chamber of the Transformation Industry (CANACINTRA), the National Agricultural Council (CNA) and the Employers' Confederation of the Mexican Republic (COPARMEX) have jointly expressed that they see President Lopez Obrador’s initiative to ban outsourcing as a threat to the creation and preservation of formal employment, report Forbes and La Jornada.

The ban, which is expected to be approved by February 2021, would seriously damage Mexico’s competitiveness and would lead to the closing of thousands of MSMEs, the different bodies contend. “We have decided not to sign the agreement proposed by the federal government in reference to this initiative, since it preserves the idea of ​​substantially prohibiting the activity of subcontracting, relegating this practice only to specialized subcontracting," CANCINTRA, COPARMEX and CNA pointed out.

The groups feel it is ‘absurd’ to stigmatize all business owners for the failure of a few to comply with fiscal and labor obligations. The failure to deal with this issue, they say, is a result of the lack of adequate supervision from authorities, such as the Tax Administration System (SAT), the Ministry of Labor and Social Welfare, Infonavit and IMSS. All three bodies said they are available for an open and frank dialogue with the executive federal powers and each chamber of congress to reach a law that is beneficial for all. “Regulation yes, prohibition no,” they say.

 

Negotiations on Ban Outsourcing on Hold, Says President

During the president’s morning press briefing yesterday, he stated he would ask congress to wait on his proposed outsourcing initiative so that it can be resolved through dialogue between businesspeople and the government. The goal is to reach an agreement that benefits both parties. Meanwhile, Luisa María Alcalde, Minister of Labor and Social Welfare, announced that the initiative would be held back until February 2021. If an agreement is reached, there will be a 30-day term to settle on a new proposal. “The new proposal to regulate outsourcing will be much better than the one originally presented. It is a subject that has been highly reviewed and discussed and with all this, we will reach very favorable conclusions,” said Carlos Salazar, Head of the Business Coordinating Council, as Mexico Business News wrote yesterday.

López Obrador’s outsourcing initiative was first presented in November. The plan called for the elimination of outsourcing to give employees more security when it comes to their job, reported MBN.

The data used in this article was sourced from:  
Mexico Business News, Forbes, La Jornada
Photo by:   USDA
Jan Hogewoning Jan Hogewoning Journalist and Industry Analyst