Note published on April 22 in El Economista, Empresas [Companies] Section by María del Pilar Martínez.
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August 1 is the deadline for corporations to restructure their workforces and, after analyzing the company’s requirements, determine whether they will proceed to employer substitution or whether they will terminate the employment relationship with a direct impact on the worker.
August 1 is the deadline for corporations to restructure their workforces and, after analyzing the company’s requirements, determine whether they will proceed to employer substitution or whether they will terminate the employment relationship with a direct impact on the worker, according to the reform on subcontracting matters approved by the Federal Congress.
On the other hand, companies whose main activity is personnel subcontracting will now have to determine whether they can remain in the market, their only option being “the change of their line of business”, in the opinion of specialists. Even though the reform is waiting to be promulgated by the Federal Executive Power, labor specialists consider that the new rules are already clear and, the faster companies work, with all that the change implies, the better they will be able to comply with the new provisions of the Federal Labor Law.
“The decree is very clear, and the first thing that organizations should keep in mind is that if they decide to move the workers, move them from the company, they have until August 1 to conduct an employer substitution process and they can do it without the need for them to transfer the essential production assets. That is, they can transfer the workers only, without this causing the need for further compliance”, explained Ricardo Martínez Rojas, Doctor in Labor Law at D&M Abogados.
The second aspect that has August 1 as its deadline is “the obligation that they will have of registering in the Registry that will be created by the Department of Labor and Social Welfare, in the event of there being a contractor company that will provide specialized services or works; in that case, they will have this obligation”, said Germán de la Garza de Vecchi, leading partner of Labor Services at Deloitte México.
They recommended conducting an analysis of the objects of their contracts, with the objective of their becoming contracts for specialized services or specialized works. Armando Leñero, president of the Center of Studies on Formal Employment (CEEF), pointed out that the established timeframe for transition is insufficient.
Reform on subcontracting – Deadlines
- Direct hiring of workers must be complied with by August 1; subcontracting is prohibited.
- In June, the STPS must issue the regulations for specialized works and it must open the National Registry of Companies that remain specialized.
- In the case of Social Security migration, companies have 90 days from the publication of the law to comply.