Social Security Reforms Extend Protections to Self-Employed

In a significant move towards enhancing social security, the Mexican Senate unanimously approved reforms to  labor and social security legislation expanding healthcare access to self-employed individuals. These legislative changes recognize the right of domestic and international self-employed Mexican workers to voluntarily affiliate with the Mexican Social Security Institute (IMSS), to ensure comprehensive coverage and benefits, including contributions to the National Housing Fund for Workers (INFONAVIT).

The reform received final approval after being passed by the Chamber of Deputies in November 2022, marking a watershed moment in Mexico's social security landscape.  Previously, many self-employed Mexican individuals lacked access to essential benefits, leaving them financially vulnerable in the event of illness or accident.

Under the new legislative framework, self-employed workers, including freelancers and small business owners, can voluntarily enroll in the IMSS to access medical services, workplace accident protection, and retirement benefits. Affiliation is determined based on a person's real monthly earnings, allowing flexibility in contributions, which can be paid monthly, bimonthly, semi-annually, or annually.

“Incorporating independent workers helps us avoid simulations and people suffering from fraud by companies or individuals offering false employment relationships. We do not want simulations," Norma Gabriela López Castañeda, Director of Incorporation and Collection, IMSS told El Economista. 

In response to the surge in self-employment following the COVID-19 pandemic, this reform holds immense importance.  Approximately 12.4 million Mexican nationals have transitioned to self-employment as a means of securing stable income, marking a 3% increase since March 2020. Similarly, data from the National Occupation and Employment Survey (ENOE) reveals that 13 million people are independent workers; of this group, 59% are men and 41% are women. In this way, one in five people who participate in the labor market today does so on their own.

“In the last 25 years, the characteristics and composition of the Mexican population have undergone significant changes. In particular, labor markets have evolved significantly thanks to the development of new information technologies that have made it possible to carry out work activities without a fixed schedule and remotely, generating new types of employment. [Therefore] having a social safety net that offers medical services, livelihood security, social services, and retirement savings is essential,” said a Senate Representative. 

The IMSS has been given 180 days to adapt its internal regulations to accommodate these changes, ensuring a smooth implementation process. The reforms are expected to significantly improve the financial and health security of millions of self-employed individuals, ushering in a new era of inclusivity and social protection in Mexico.