Home Business-newBusiness Most relevant changes in the labor law reform

Most relevant changes in the labor law reform

by Yucatan Times
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With 417 votes in favor, 29 abstentions and one vote against, the plenary session of San Lázaro approved yesterday the labor reform. 

With various complaints that the bill was incomplete and will not have the resources to implement it, Lower Congress endorsed -with 417 votes in favor, 29 abstentions and one vote against the labor reform that meets the U.S. Congress’ demand to ratify the free trade agreement with our country, known as T-MEC.

This bill, will be sent to the Senate for discussion and eventual approval. With this reform, the “Conciliation and Arbitration Boards” are eliminated, the labor justice system is transformed, unions are democratized, collective contracts and the election of their leaders are democratized through the free, direct and secret vote of their members.

On April 2, the president of the U.S. House of Representatives, Democrat Nancy Pelosi, warned that the U.S. Congress would not endorse the latest trade agreement with Mexico and Canada until our country approved a labor reform.

After eight hours of debate, the deputies modified seven articles and endorsed in particular all the reservations; 258 voted in favor, 18 abstentions and 67 against, but 104 legislators anticipated their Easter holidays, as they left before the end of the session.

These are some of the changes that would be established if the new labor law (Ley de Transformación y Flexibilidad Laboral) promoted by the new government of López Obrador, is approved.

Less pay for working overtime or during meal time
– Hours worked by an employee during his or her day off shall be paid at one and a-half times the agreed rate for regular hours (instead of paying double, the current rate).

An employer who allows an employee to work during meal period shall pay a rate of time of half the agreed rate for regular hours (instead of the current double rate).

The employee is entitled to accrued vacation and sick leave by working 130 hours per month (not 115 as it is currently). The minimum monthly accrual for vacation shall be half a day for the first year of service; three-fourths of a day after the first year and until completion of five years of service; one day after five years and until fifteen years of service; and one and one-quarter days after fifteen years of service. The minimum monthly accumulation for sick leave shall be three quarters of a day per month. In addition, in the case of employers whose payroll does not exceed 12 employees, the minimum monthly accumulation for vacation and sick leave shall be half a day in both cases. (Currently, the worker accumulates one and a-quarter days of vacation per month and one day of sick leave per month.)

However, the new law establishes that the employee who worked for an employer before the new law came into force, will continue to enjoy the monthly accrual rates of vacation and sick leave that applied to him. In addition, it will be an illegal practice for an employer to dismiss or suspend an employee indefinitely in order to hire him or her again or replace him or her with a new employee so that the accumulation of vacation and sick leave is in accordance with the scheme established in the new law. In addition, the provisions of the new law will not apply to employees covered by a collective bargaining agreement entered into by a workers’ organization and an employer.

Less time to claim compensation after dismissal
– An action for an employee to claim wages against an employer shall be barred within one year after termination of employment with the employer (currently 3 years). This does not apply to claims for layoffs prior to the date this new law is passed.

Less money in the Christmas bonus
– The employer shall pay a bonus (Christmas bonus) to any employee who works more than 700 hours or 100 hours per year if a dock worker, in an amount equal to 6% of the total maximum wage of $10,000, or a total of $600. An employer who employs 15 or fewer employees shall grant a bonus equal to 3% of the maximum wage of $10,000, or a total of $300.

In the case of employees after the new law takes effect, an employer who employs 20 or more employees for 26 weeks within the 12-month period must pay a bonus to each employee who worked 1,350 or more hours in that year equal to 2% of the earned salary up to $600. If the employer employs 20 or fewer employees for 26 weeks or less within the 12 months, the employer must pay a bonus to each employee who has worked at least 1,350 hours in that year equal to 2% of the total accrued wage up to a maximum of $300.

The bonus will be paid between November 15 and December 15.

More time on probation
– The new law establishes a probationary period for employment of 18 months (contrary to the current 3 months or maximum extension of 6 months), unless otherwise stipulated in writing. However, in cases where the employee is represented by a labor union, the probationary period shall be that agreed to by the employer and the union.

Protection for breastfeeding mothers if employed part-time
– The new law establishes fixed periods to provide women employed part-time to breastfeed or express breast milk. If the daily part-time work exceeds four hours of work, the employee must be given 15 minutes for every four consecutive hours of work to breastfeed or express breast milk.

Alternate working day of four days with 10 hours of work
– An alternate work schedule may be established in which the employee completes a workweek of not more than 40 hours with daily schedules not to exceed 10 hours of work per day. This agreement may be revoked by mutual agreement, or it may be terminated unilaterally by either party after one year has elapsed.

More part-time hours
– The new law allows part-time employment for up to 130 hours per month (instead of the current 115 hours).

Other changes
– The new law establishes the differences between an “independent contractor” and an employee.

– The new law provides “employment contracts” that may be established by verbal or written agreement, unless otherwise provided in any special law. However, a claim for breach of an oral agreement or contract for a value exceeding the equivalent of three months’ compensation will not be recognized.

– The new law provides that severance pay or voluntary payments paid to the employee by reason of dismissal will be free from the payment of income tax.


The Yucatan Times



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