LatinNews Daily - 21 April 2021

In brief: Mexico’s senate approves new rules on outsourcing

* Mexico’s senate has voted in favour of a reform to the regulations surrounding the subcontracting of employees and outsourcing of services by Mexican firms. The reform, which was the result of a compromise between the government led by President Andrés Manuel López Obrador and the business sector in a rare display of consensus politics, was approved by the senate with 118 votes in favour, two abstentions, and none against, and now awaits sanction by the executive. The reform, which introduces stricter regulations for outsourcing, bans certain forms of the practice outright, and establishes penalties for firms who break these new rules, was welcomed by lawmakers as an important step forward in guaranteeing the rights and dignity of subcontracted workers, and celebrated as a fiscal victory as it should end attempts at evading tax through outsourcing. However, there are concerns that the new regulations will cause confusion amongst some firms and be difficult to put in place, as well as warnings that they might lead to job losses and informality as some companies turn to the informal sector to hire subcontractors.  

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