This Week In Talent: Aguinaldo, December Layoffs, Labor Reform

This week, discussions around the Christmas bonus focus on extending it to 30 days. A proposed labor reform aims to ensure fair pay for service workers, guaranteeing a base salary alongside tips. Meanwhile, Mexico is preparing to offer job opportunities to migrants if large-scale US deportations occur. On an international scale, international migrants made up 4.7% of the global workforce in 2022, facing barriers such as language challenges and unrecognized qualifications. The ILO calls for targeted policies to promote inclusive labor markets.

This is Week in Talent! 

Mexico

Aguinaldo: Crucial Financial Boost During the Holiday Season

The aguinaldo, a mandatory Christmas bonus in Mexico, is a critical financial right that must be paid by Dec. 20. Employees are entitled to at least 15 days of salary for one year of service, with proportional payments for shorter durations. Congress is currently in talks about raising the minimum bonus payment to 30 days, reflecting ongoing efforts to enhance workers' rights and ensure that employees receive more substantial financial benefits. 

December Layoffs in Mexico: Cost-Cutting, Reputation Impact

Employers in Mexico lay off workers in December only to rehire them in January to avoid higher employment costs. This practice led to approximately 385,000 job losses between November and December 2023, primarily affecting permanent positions. The Ministry of Labor, along with IMSS and INFONAVIT, is addressing these practices to ensure compliance with labor regulations and protect workers’ rights. These layoffs can harm a company’s reputation by suggesting instability, which can impact consumer trust and brand strength.

Proposed Labor Reform to Ensure Fair Pay for Service Workers

Mexico’s Chamber of Deputies is reviewing a proposed reform to the Federal Labor Law (LFT) that aims to guarantee a base salary alongside tips for workers in restaurants, hotels, bars, gas stations, entertainment, and sports centers. Led by Pedro Haces of the Autonomous Confederation of Workers and Employees of Mexico (CATEM), the initiative seeks to amend Art. 90 of the LFT to ensure tips cannot replace the minimum wage. Workers would be entitled to a guaranteed base salary with tips as additional compensation, and employers would be prohibited from appropriating or using tips. This reform could reduce wage inequality and improve living standards for the 1.7 million service sector workers reliant on gratuities. It also grants inspectors greater authority to enforce fair tip distribution and workplace safety standards. If approved, the reform would establish a minimum wage of at least MX$278.80 per day for these workers.

Mexico to Offer Job Opportunities to Deported Migrants: CCE

Mexico is preparing to offer employment opportunities to migrants if the United States carries out large-scale deportations or other stringent migration measures, stated Francisco Cervantes, President, Business Coordinating Council (CCE). Over 5,000 jobs have already been created in sectors like mining, automotive, and manufacturing, with plans for significant growth next year. Cervantes highlighted the private sector’s responsibility to address the country’s unemployment rate of 2.7% and expressed concern about Mexico potentially being used as a conduit for US deportations. Carlos Serrano, Chief Economist at BBVA Mexico, noted that such mass deportations could hurt the US economy, making them an unlikely scenario.

International 

 International Migrants Represent 4.7% of Global Workforce: ILO

The International Labour Organization (ILO) report, Global Estimates on International Migrant Workers, shows that international migrants made up 4.7% of the global labor force in 2022, with 167.7 million migrants being part of the workforce across their destination countries. Most of these migrants, 68.4% or 114.7 million, were employed in high-income countries. Despite their economic contributions, migrant women face significant barriers such as language challenges, unrecognized qualifications, and limited childcare options, resulting in a lower employment-to-population ratio of 48.1% compared to 72.8% for migrant men. The ILO calls for targeted policies to support migrant workers and promote inclusive labor markets.