[Mexico] Does a new bill signal the end for outsourcing?

On November 12, President Andrés Manuel López Obrador announced a bill initiative that will reportedly have a significant impact on outsourcing and the use of service entities currently in use to minimise Mexican employee profit-sharing obligations, if it is enacted. The initiative includes amendments to the Federal Labor Law, the Social Security Law, the Mexican Tax Code, including changes to income and Value Added Tax regulations, and several others. 

President Obrador submitted the initiative to Congress and it is expected to pass more or less as proposed. A local paper reported Labor Secretary Luisa María Alcalde saying that outsourcing harms workers because it allows companies to avoid granting benefits to subcontracted employees. Ms Alcalde also cited other abusive practices the law aims to put a stop to, practices like companies firing workers before Christmas and rehiring them in the new year to avoid paying year-end bonuses. National Law Review breaks down the key details of this initiative.

On November 12, President Andrés Manuel López Obrador announced a bill initiative that will reportedly have a significant impact on outsourcing and the use of service entities currently in use to minimise Mexican employee profit-sharing obligations, if it is enacted. The initiative includes amendments to the Federal Labor Law, the Social Security Law, the Mexican Tax Code, including changes to income and Value Added Tax regulations, and several others. 

President Obrador submitted the initiative to Congress and it is expected to pass more or less as proposed. A local paper reported Labor Secretary Luisa María Alcalde saying that outsourcing harms workers because it allows companies to avoid granting benefits to subcontracted employees. Ms Alcalde also cited other abusive practices the law aims to put a stop to, practices like companies firing workers before Christmas and rehiring them in the new year to avoid paying year-end bonuses. National Law Review breaks down the key details of this initiative.