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Mexico revamps labor law, with implications for U.S. firms

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in Employment Law,Human Resources

by Diana J. Nehro, Esq., Ogletree Deakins

For the first time in 40 years, Mexico has instituted significant labor reforms, a move that has far-reaching implications for its em­­ployers as well as U.S. companies doing business there.

According to Mexican officials, the reform legislation was designed to in­­crease productivity, create better-paying jobs and improve employment access for women and younger workers.

Outsourcing, subcontracting

Historically, U.S. companies with Mexican operations have managed labor obligations by outsourcing or subcontracting to service companies that provide workers for a fee. In this arrangement, workers are ­employees of the service company, which is contractually responsible for labor obligations.

This is important in all aspects of Mexico’s Federal Labor Law (FLL), but particularly in regard to the law’s 10% employee profit-sharing requirement. Under a typical subcontracting relationship, 10...(register to read more)

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