MEXICO

On April 14, after being approved with modifications by the committees of Finance and Public Credit and Labor and Social Welfare of the Chamber of Deputies, the plenary of such chamber also passed the outsourcing bill. The text imposes a fine on those companies that do not allow inspection by labor authorities to certify compliance with the new provisions. The changes included by the committees do not modify, in general terms, the original spirit of the bill presented by the President, Andres Manuel Lopez Obrador (AMLO). The bill was sent to the Senate and is expected to be referred to its corresponding committee for discussion in the short term.

The initiative approved includes the following points:

• The prohibition to subcontracting is established in Article 12 of the Federal Labor Law and no longer in Article 13.

• The subcontracting of services within companies is not prohibited when these are not part of the company’s social objective or predominant economic activity. In order to subcontract these jobs, companies will need an authorization from the Ministry of Labor and Social Protection (STPS, in Spanish).

• Subcontracting companies will have to register and be part of a STPS registry. The registration will be renewed every three years.

• In case a subcontracting company does not submit the required information or prevents inspection by the labor authorities, it may be penalized with a fine of up to USD 22,400.

• A new article is included regarding the right of workers to participate in the companies’ profit sharing. This amount will have a maximum limit of three months of the employee’s salary or the average of the employee’s participation received in the previous three years.

• Once the reform is published in the Official Journal of the Federation (DOF, in Spanish), companies will have a term of three months to transfer their own subcontracted personnel to their payrolls.