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Mexico’s Labor Department Plans to Add New Category of Workers

Mexico’s Ministry of Labor and Social Welfare (STPS) will submit a proposal to Congress to convert gig workers to formal employees, affecting the country’s estimated half a million platform workers. 

Unlike the United States’ proposed economic realities test or the rebuttable presumption in the EU, Mexico intends to create an innovative definition for gig workers, differing from traditional employees but still providing social protections such as social security. 

The reform proposes that platform companies will be obligated to recognize a formal labor relationship with their contractors and incorporate them into the IMSS, Mexico’s social security system. The proposal suggests creating a special chapter on digital platforms under the federal labor law and providing a definition for the relationship, instead of calling them “partners” or “service providers.” 

Lusia Maria Alcalde, Mexico’s Labor Minister, acknowledged that platform workers shouldn’t be treated as traditional employees who have a single employer, a fixed work location, or a specific schedule. The Ministry, IMSS, and the business community are collaborating on a flexible scheme that can adapt to the needs of platform workers and provide sufficient social protections for them. Alcade also stated that platform workers will have the right to form a union and collectively bargain. 

Outlook: STPS has not offered a specific timeline for the proposal. As the government is trying to tackle the new work format, it is also being criticized for only being interested in higher tax collection and increasing membership dues for the official unions, without dealing with workers’ real concerns.

Published on: October 21, 2022

Authors: Wenchao Dong

Topics: Employment Law, Latin America

Wenchao Dong

Director, Global Affairs, HR Policy Association

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Contact Wenchao Dong LinkedIn

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