Mexico Allows Outsourcing Only for Specialized Services & Works

Mexico's President Andres Manuel Lopez Obrador (AMLO) announced an agreement with unions and business representatives to regulate outsourcing.

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Besides granting companies three months to include outsourced workers on their payroll, the agreement only allows outsourcing of specialized services.

The Labor Secretary (STPS) will register subcontracting companies, and there will be profit-sharing modifications, including an increase in workers' wages.

Private sector representatives demanded changes on penalties for breaches of the new rules since the fines amount to US$200,000. They also urged for clear permit periods. 

The deal supports a bill submitted by AMLO to Congress in November last year. There is still no agreement on the issue in the Lower Chamber.

STPS chairwoman Luisa Alcalde highlighted that regulating outsourcing was a way to achieve a "more equitable" labor market in a country where at least 4.9 million workers are outsourced in precarious conditions.

Last year, Mexico suffered an 8.5 percent plunge in its gross domestic product, the largest economic drop since the Great Depression.