Employment Practice Group I November 19th, 2024

Current Labor Outlook

Potential Upcoming Labor Law Changes.

In recent congressional discussions, several labor law reforms have been proposed and are currently under consideration. These initiatives seek to address emerging workplace trends and to enhance employee protection. Below are key developments to watch for:

1. “Chair Law”: This potential reform intends to grant the employees the right to sit during intermittent periods of two hours during the work shift, especially those whose job is to be performed standing for long periods. This initiative aims at preventing potential health issues caused by prolonged standing.

2. Regulation of Digital Platforms: On October 16, 2024, an initiative was passed amending the Federal Labor Law (LFT) to extend certain labor rights protections to workers of digital platforms such as delivery drivers and ride-share operators.

3. Extension of Paternity Leave: An initiative has been presented to extend paternity leave from 5 to 20 paid workdays, with an additional subsequent extension for a total of 30 days in cases where the mother or baby present complications during childbirth.

4. Increase in Christmas Bonus (Aguinaldo): This initiative seeks to increase the Christmas bonus (aguinaldo) to one month of salary, benefiting employees with additional economic resources during the holiday season.

5. Reduction of Work Shift: This initiative intends to reduce the standard workweek from 48 to 40 hours, while recognizing two days of rest for every five working days.

Legal Changes Approved in Recent Years.

Along with the above-mentioned pending reforms, several significant legal changes have already been approved in recent years, directly impacting businesses and employees alike. Here is an overview of the most notable changes:

1. Vacation Days Increase: The Federal Labor Law now mandates a minimum of twelve vacation days after an employee’s first year of service. This allowance increases progressively based on the employee’s length of service.

2. Reform on Outsourcing: Passed on April 23, 2021, this reform regulates and limits the use of labor outsourcing. This new legislation was approved to prevent evasion of labor obligations and social security.

3. Federal Center for Conciliation and Labor Registration: This institution is responsible for mediating labor disputes through conciliation as a mandatory prior step before the parties may resort to labor courts.

4. Mandatory FONACOT Registration: Companies that fail to register with the National Workers’ Consumer Fund Institute (FONACOT) may be penalized. This registration enables employees to access additional credit and for consumers’ goods.

5. Recognition of Domestic Workers’ Rights: The 2019 labor reform made it mandatory for employers to register domestic employees with the Social Security Institute.

6. Home Office Regulations: Effective December 2023, NOM-037-STPS-2023, establishes health and safety standards for employees working remotely, ensuring that companies comply with safety and wellness standards for employees under home office format.