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As of 24 April 2021, the reform of the Outsourcing Law in Mexico will come into force. The main objective of the legislative reform is to eliminate all practices that threaten the labour rights of workers, as well as to prevent the evasion of corporate obligations and tax fraud.
What is outsourcing?
- Reducing costs and time in staff recruitment
- Obtain more related profiles
- Focus on your core business
- Improve your productivity without investing in training
How would you define a smart organisation in a nutshell?
The workplace is becoming increasingly demanding, increasing competitiveness and bureaucracy. Delegation allows managers to reduce their workload with the certainty that vital tasks will continue to be performed.
What is essential to consider in order to develop a smart organisation?
The main focus is on developing an organisation that responds affectively to the unresolved challenges of today's organisational world and achieves sustainable high performance in a number of ways:
- Sustainable over time: i.e. organisations that achieve their intended results on an ongoing and regular basis, rather than on an extraordinary and random basis.
- Sustainable for society: i.e. organisations that have a positive impact on the world, providing higher levels of fulfilment for all stakeholders involved.
On the other hand, gamification is a training methodology that facilitates the internalisation of knowledge in a more fun way, generating a positive user experience.
Reasons for reform
The need to reform the Outsourcing Law comes as the Ministry of Labour and Social Welfare (STPS) reviews compliance with the Federal Labour Law in early 2021. During this review, the STPS comes across worrying data related to the evasion of obligations through outsourcing. One of the most relevant is that 83% of Mexican companies subcontracted 100% of their workforce, or that 95% of companies obtained their workers through between 3 and 6 external suppliers (Source: Communiqué 0001/2021, Government of Mexico).
On the other hand, gamification is a training methodology that facilitates the internalisation of knowledge in a more fun way, generating a positive user experience.
Objectives of the new Outsourcing Law
Having identified the need for change, the reform of the Outsourcing Law in Mexico aims to:
- Regulate outsourcing or subcontracting except for those services or works that do not form part of the corporate purpose or economic activity of the contracting company.
- Impose mandatory registration of subcontracting, accrediting compliance with labour, tax and social security obligations.
- Prevent abuses and violations of workers' rights.
- Eliminate tax evasion and profit sharing, and comply with employer obligations.
- Stiffen penalties for non-compliance: these can be up to 4 million 481,000 pesos or 3 years imprisonment for tax fraud.
- Set deadlines for the reform: Mexican companies were given 3 months to regularise, and must update their registration every 3 years.
On the other hand, gamification is a training methodology that facilitates the internalisation of knowledge in a more fun way, generating a positive user experience.
Impacts of reform on business
El Economista's article of 4/10/2021 on Mexico' s outsourcing reform points out the impacts of the legislative change. Since April, 83% of the jobs of the outsourced workforce have been formalised. The rest, unfortunately, have been terminated by the IMSS.
On the other hand, gamification is a training methodology that facilitates the internalisation of knowledge in a more fun way, generating a positive user experience.
In terms of company operations, not all companies have been able to retain staff to compete in niche markets due to the financial impacts of the reform. Already during the first month of the reform, in a survey by the consulting firm Mercer called "Telework and Outsourcing Thermometer", 15% of companies with outsourcing schemes stated that they would shed their tertiary workers. In addition, 24% of businesses also indicated that they would decrease wage increases and modes in order to soften the financial impacts of the reform.
Fortunately, SMEs today are not alone, as software such as niikiis, positively impacts efficiency and employee satisfaction with a dashboard to track compliance with the law. Want to know more? Request a free demo and find out how our HR management solution can help you with outsourcing reform.
