Earlier this year, on May 1st, the Mexican Senate approved a new labor law reform in Mexico, which was published in the Official Journal of the Federation (Diario Oficial). This reform includes important changes in labor law that deal with topics such as freedom of association, guarantees for domestic workers, and the creation of the National Conciliation Center.
What do companies need to know about labor reform in Mexico and what changes will they need to implement? This post presents key facets of the reform that has been passed in May of 2019 that will promote compliance with the new legislation.
What is Labor Reform in Mexico 2019?
The 2019 Labor Reform in Mexico regulated the nation’s Federal Labor Law (LFT). The Reform’s base initiative was presented on December 23, 2018, and was subsequently approved on April 11, 2019, by Mexico’s Chamber of Deputies. This was followed by the Mexican Senate’s approval on April 29th.
This Labor Reform arose as a part of the obligations that arose as a result of the country’s signing of the new United States–Mexico–Canada Free Trade Agreement. The changes that have been made to Mexican labor law and trade union matters were necessary to adapt to the terms of the new commercial trade agreement.
The Changes to Labor Reform in Mexico 2019
The new Labor Reform amends Article 3 of the Mexican constitution, which defines work as “a right and a social duty.” “It is not an article of commerce, and it demands respect for the freedoms and dignity of the person who lends it.”
Similarly, the Labor Reform in Mexico 2019 recognizes the differences between men and women in order to provide for their equality before the law, as well as to ensure “conditions that are conducive to decent living and health for workers and their dependents.”
Given the aforementioned concerns, various aspects of the Mexican Federal Labor Law (LFT) were adjusted and amended. These include:
Freedom of union membership: The Labor Reform of Mexico 2019 assures that workers will have rights of free affiliation and participation within trade unions, federations, or confederations. In this sense, no one can be obligated to join such organizations.
Likewise, the implementation of union votes will be in accordance with democratic rules and ideals, as well as with gender equality. The participation of union members in such activities will be personal, free, direct, and secret.
Functioning of trade unions: The registration of a trade union under Mexican Labor Law can be canceled if it is confirmed that its leaders have committed acts of extortion against their employers. Additionally, it has been established that the duration of policies cannot be undefined.
The disappearance of Conciliation Boards: Mexican Labor Conciliation Boards will be replaced with labor courts that depend upon the judiciary for the resolution of disputes between employers and employees.
Creation of the National Reconciliation Center: According to the Labor Reform of Mexico 2019, the National Reconciliation Center will be the first organization through which workers and companies will seek to resolve conflicts. An estimated 32 such centers will begin their function by 2021.
Guarantees to domestic workers: Employers must comply with the Labor Law Reform in Mexico of 2019 by registering their domestic workers with the Mexican Social Security Institute (IMSS), as well as pay fees or other obligations. Likewise, labor reform in Mexico also guarantees that such workers will be entitled to a day and a half of weekly rest, preferably on Saturday and Sunday.
Other responsibilities of the employers:
Protocol to avoid discrimination: In conjunction with the workers, companies must define and implement protocols to prevent cases of gender discrimination, as well as to avoid cases of violence, harassment, or sexual harassment. Additionally, they must work together to eradicate forced labor.
Delivery of copy of contract: Employers will be obliged to provide workers with a printed copy of any collective labor agreements that have been made within 15 days of the registering of the document with the Federal Settlement Center.
Review of collective agreements: Under the recently enacted Labor Law Reform in Mexico, collective agreements must be discussed a minimum of every four years.
Clear information about deductions: A receipt of payment must be delivered to each worker. It should provide detailed information related to any and all deductions that are made.
How should companies proceed under the Labor Reform in Mexico 2019?
A company that is operating in Mexico must always comply with the nation’s regulations. This is why, in the face of Labor Reform in Mexico, it is necessary to begin to implement changes progressively in order to avoid any breach of labor law. Recommendations for doing so are below:
Learn about the changes to labor law: Review the official documentation, investigate the impact of these changes, as well as the mechanisms to implement them in your company. If you have any doubts about any of the aspects of Labor Reform in Mexico, there are specialized employment advisors that can be contacted for advice.
Implement changes in the law: Once you have a clear understanding of the changes put in place by Labor Reform in Mexico you will have to take steps that include the process of ratifying any applicable collective agreement and making sure that all workers receive detailed receipts for each pay period.,
Establish direct communication with workers: It is important to open clear channels of communication to provide informative talks which explain what the labor law reform is and what it consists of.
The Labor Law Reform in Mexico 2019 poses new challenges for businesses as well as workers. This change in legislation redefines the concept of work in order to give greater prominence to its social function. The Reform also seeks to reduce cases of discrimination and/or conflict.
Under these new circumstances, both workers’ unions and employees will have to adjust to ensure a fairer and more transparent relationship. Companies should do their due diligence to make themselves fully aware of the implications of the Reform on their operations. When needed, they should seek out specialized assistance from labor advisors in order to ensure a smooth and successful transition.