Saturday, December 28, 2024

New labor reform protects rideshare and other platform gig workers

More than 650,000 Mexicans got a little something extra in their Christmas stockings this year when President Claudia Sheinbaum signed into law labor reforms benefitting gig workers on digital platforms such as Uber, DiDi and Rappi.

The new landmark regulations in the Federal Labor Law were published Christmas Eve in the Official Gazette of the Federation, which serves to inform the public and ensure transparency. They take effect June 22, 2025.

The news of the labor law reform protecting gig workers was celebrated both here and outside Mexico by labor advocates.

The reform recognizes, for the first time in Mexico, gig workers as employees, making them entitled to worker benefits and protections under Mexican law — as long they generate a monthly net income equivalent to at least one daily minimum wage in Mexico City. 

For 2024, the daily minimum wage throughout most of Mexico is 248.93 pesos (US $12.31) per day, but it will increase by 12% to 278.80 pesos (US $13.78) starting Jan. 1. (The same increase will lift the daily minimum wage in Mexico’s northern border free zone to 419.88 pesos per day, or US $20.70.)

Gig workers earning below the threshold will remain classified as independent workers but still receive some protections.

Key provisions of the new regulations include:

  • Mandatory enrollment in the Mexican Social Security Institute (IMSS), which provides government-run health care to employees in the formal economy. The IMSS has been directed to come up with a plan to incorporate these workers.
  • Severance pay equivalent to three months’ salary, plus an additional 20 days of salary for each year of service rendered. 
  • Profit sharing for workers logging over 288 hours annually (an average of 24 hours per month). This calculation also considers an activity factor of 75% for each hour of connection, which is equivalent to six hours per day in an eight-hour workday.

All calculations will be based on time actually worked — which can vary greatly for gig workers. The time clock will start when a task is accepted and end when it is completed. 

Mexico's President Claudia Sheinbaum at her daily press conference, pointing and smiling.
“This does not exist in most other countries,” Mexico’s President Claudia Sheinbaum proudly told reporters. (Galo Cañas Rodríguez/Cuartoscuro)

There will also be proportional benefits, such as vacation pay and Christmas bonuses, although tips are excluded from salary calculations.

The law also requires digital platforms to issue unambiguous worker contracts and to submit payment receipts on a weekly basis.

Platform operators will bear legal responsibility as employers, while users of the apps will face no obligations. Companies can dismiss workers without reinstatement obligations unless collective rights — such as unionization or the right to strike — are violated.

Labor advocates hailed the reform as a milestone.

“This initiative maintains flexible working hours, a fundamental aspect that we have always fought for,” said Sergio Guerrero, head of the National Union of App Workers (UNTA). “The possibility of each worker to decide his or her own schedule remains intact — and this does not deny them from obtaining labor rights, as some have tried to make us believe.”

Over 658,000 platform workers in Mexico are expected to benefit, Guerrero said, adding that the reform will help curb job insecurity. 

“This reform is a victory for the workers,” he said.

Sheinbaum noted that the initiative was worked on jointly by her office, the Ministry of Labor and Social Welfare (STPS), IMSS and the homebuyers’ savings plan Infonavit, as well as workers and the digital platforms.

“This does not exist in most other countries,” she said of the new regulations, adding that their enactment is “part of what we conceive in the Fourth Transformation.”

With reports from Infobae, El Universal and América Economía

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