Outsourcing Reform: Stimulus for Job CertaintyBy MBN Staff | Thu, 11/19/2020 - 12:47
At the end of last week, President Andrés Manuel López Obrador presented an initiative to reform the outsourcing system in Mexico, referring to the fact that the current scheme is used by companies to avoid their obligations to workers, as well as taxes. López Obrador said that this initiative aims to "bring order" to labor subcontracting, which is estimated to affect at least 4 million workers. The law seeks to regulate three areas: the subcontracting of personnel, specialized services and works and employment agencies.
According to analysts consulted by Expansión, the reform initiative will improve working conditions in Mexico, as well as legal certainty for workers. “Workers will be fully aware of their benefits and wages and will contribute to their social security based on their actual salary. Many times, outsourcing companies were used to simulate acts and to mask social security contributions, both with IMSS and INFONAVIT," said Juan Cristóbal Ibáñez, an academic from the Law School at Universidad Panamericana (UP). Another benefit, he pointed out, is that workers will be able to access better-paid, higher-benefit jobs and will have greater legal certainty.
However, the prohibition to contract personnel under this modality will affect job creation, as companies will be forced to hire employees with full salaries and benefits.
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