Mexican president presents bill to ban outsourcing of jobs

MEXICO CITY (AP) — President Andrés Manuel López Obrador said Thursday that he will propose legislation to Mexico's congress that would ban subcontracting or outsourcing of jobs by private companies, except with government authorization.

The proposal says personnel, staffing or temp companies can help private firms recruit, select or train workers, but cannot be listed as their employer.

The bill would allow subcontract workers to provide “specialized services or carry out specialized projects that are not part of a company's line of business,” but only with approval from the Labor Department.

Labor Secretary Luisa Maria Alcalde estimated the outsourced or subcontracted workforce in Mexico grew from about 1 million workers in 2003 to about 4.6 million by 2018.

The government says the practice has been abused to avoid paying employees’ the benefits they are due by law.

Alcalde cited the case of a hotel in the resort of Cancun that had 802 workers, but only two registered as its employees. Many of the other workers were kept on fictitious three-month contracts, then were rehired every three months by a different front company to prevent them from accumulating seniority, she said. She said other workers had their salaries falsely registered at the minimum wage, reducing the amount of benefit contributions owed by the employers.

The secretary said some companies fire workers before Christmas and re-hire them in January or February to avoid paying year-end bonuses. In 2019 alone, authorities say that appeared to have happened to over 380,000 workers.

Alcalde said the bill's provisions would be enforced by fines or tax evasion charges.

The proposal drew criticism from business groups when López Obrador first mentioned it in late October. They said the change...