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Mexico - December 2020

Business leaders may limit outsourcing reform

Mexico’s President Andrés Manuel Lopez Obrador on 12 November sent a bill to congress that virtually bans all forms of outsourcing, which was regulated in the 2012 labour reform with the aim of introducing much needed flexibility into the domestic labour market. The motivation behind the bill is that the practice, which allows firms to reduce their costs by up to 50% by subcontracting workers that are not in a company’s payroll, is considered “abusive” by the government.  According to the tax prosecution office at the finance ministry there are more than 6,000 firms that engage in illegal subcontracting to evade some M$21bn every year.

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