Mexican President Andrés Manuel López Obrador (AMLO) sent a bill to the Chamber of Deputies on Thursday, Nov. 12, that is intended to cull outsourcing subcontracting schemes that shortchange Mexican workers of their rightful benefits and allows for tax fraud.

“Today we are going to present a bill to put order in everything related to subcontracting, generally referred to as outsourcing, which has been used as a form of tax evasion and to routinely violate basic worker rights,” AMLO said during his daily morning press conference at the National Palace.

Created initially to facilitate contracting procedures for large companies, fiscal outsourcing in Mexico opened a door for employers to avoid paying Christmas bonuses and health insurance to their workers.

Since the covid-19 pandemic hit Mexico in March, thousands of workers have been laid-off with no severance pay or legal recourse against their employers.

Outsourcing has also deprived Mexican workers of profit-sharing and other rightful benefits.

“This represents an abuse of a power,” said AMLO, who noted that the practice is most common among larger corporations.}

Luisa María Alcalde, head of Mexico’s Labor and Social Welfare Secretariat (STPS), said that “cutting the tentacles of outsourcing practices” would ensure that there are no loopholes that would allow companies to continue to exploit their workers.”

She went on to say: “We are proposing a comprehensive reform for the benefit of workers. As the president commented, subcontracting is a mechanism that has victimized workers as well as the public treasury.”

…Nov. 13, 2020

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