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.
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 (register to read more)(FLL), but particularly in regard to the law’s 10% employee profit-sharing requirement. Under a typical subcontracting relationship, 10...