The Mexican Senate approved measures designed to empower Mexican workers, particularly those who work in factories. The new law loosens the country’s restrictions on collective bargaining, allowing labor unions to hold secret ballots and freely choose their representatives for the first time.
The legislation was part of the recent push between Mexico, the US, and Canada to pass a new trade agreement to replace North American Free Trade Agreement (NAFTA), which was signed in 1994. The new agreement, known as the United States-Mexico-Canada Agreement (USMCA), was signed last November but has yet to be ratified by the three countries.
The new law in Mexico was designed to give workers more power in the country so that American companies had less incentive to move their production facilities over the border. Under NAFTA, Mexican workers were often paid as little as $2 per hour.
In the past, the workers’ unions were often run by the same people who controlled the factories. Deals were often negotiated without the workers’ approval by union leaders chosen by the factory owners.
In addition to allowing for secret ballots – a step towards protecting workers from external pressure – the law also requires proof of worker consent on contracts.
The measure brings the rights of Mexican workers closer to those of American workers, giving them the ability to collectively oppose measure they consider unfair. The law received strong support in Mexico’s Senate, winning with a vote of 120-0, with two abstention. Mexico’s populist president, Andrés Manuel López Obrador, who placed improving conditions for Mexican workers high on his political agenda, also supported the law.
Business leaders in the country were less enthusiastic about the new terms for workers, feeling that the Mexican government allowed the US to pressure them into passing new measures with an eye towards the new trade agreement.
Make sure you’re up to date with all changes to avoid any compliance issues. For more details see our Mexico payroll and benefits guide.
For companies wishing to hire without opening a local entity see our PEO Mexico service