Mexico city, december 27, 2024
On December 24, 2024, a reform to the Federal Labor Law was published in the Federal Official Gazette that regulates work in digital platforms. This reform recognizes individuals who provide services through such platforms as employees, to ensure their employment rights and access to the social security system.
A digital platform employee will be understood as an individual who provides personal, remunerated and subordinated services through a digital platform, and who earns a net monthly income from their work equivalent to at least one minimum (monthly) wage in force in Mexico City (MXN $8,364.00 / USD $418.20 per month by 2025), regardless of the time effectively worked.
Individuals who earn less than one minimum (monthly) wage will be considered as an independent employee and companies that operate digital platforms must register them before the Mexican Social Security Institute to guarantee their coverage in case of occupational risks during the time effectively worked.
The key provisions of the reform include:
- Consider as working hours, the time effectively worked, i.e., from the time the employee accepts a task until it is completed or finalized.
- The salary per task or service performed must be paid on a weekly basis and include the prorated amounts that correspond to mandatory benefits such as rest days, vacations, vacation premium, Christmas bonus and overtime.
- The exclusion of tips for the calculation of social security contributions.
- The establishment of individual employment contracts, different from the terms and conditions commonly defined by digital platforms for the execution of tasks. These contracts must be registered and authorized by the Federal Center for Labor Conciliation and Registration. They may also be signed digitally and will include specific details on remuneration, work equipment, safety conditions and supervision mechanisms.
- The right to participate in the profit of such companies, provided that the time effectively worked during the tax year exceeds 288 hours. The reform sets forth a specific factor for its calculation and determination.
- Companies that operate digital platforms must implement an algorithmic work management policy that explains the operation of the algorithms used to assign tasks and activities. This policy must be communicated to employees from the start of the employment relationship, and any changes must be reported in a timely manner. This policy must be accepted and signed by the employees.
- The definition of new grounds for termination of the employment relationship without liability for the employer, which includes conduct that compromises the security or privacy of users of digital platforms, as well as unjustified failure to comply with assigned tasks or work-related instructions.
- The establishment of indemnities to be paid for the termination of the employment relationship with the digital platform employees.
- Mechanisms to be followed by the companies who operate digital platforms to address and review decisions that affect or interrupt the connection, linkage or access to the digital platform through which the services are provided.
- Express provision in which the employment relationship will be understood as automatically terminated when the employee stops their activity for a consecutive period of 30 calendar days.
The reform introduces new responsibilities for digital platform companies, which include these obligations:
- Set mechanisms to keep track of hours effectively worked and standby times.
- Issue weekly payment receipts for services rendered.
- Implement mechanisms to ensure the security of information and personal data of employees.
- Register employees before the Mexican Social Security Institute.
- Make the proper contributions to the National Workers’ Housing Fund in relation to the employees.
- Establish mechanisms to train and assist employees to ensure the adaptation and proper use of digital platforms.
- Provide information on occupational health and safety measures to be observed by employees in the performance of their work.
- Establish specific procedures to address and follow-up on internal complaints or claims raised by the employees.
- Provide information to the employees about the payment they will receive for each task.
Failure to comply with these provisions, companies who own digital platforms may be sanctioned with monetary fines that range from 250 to 25,000 Units of Measurement and Actualization, equivalent to amounts from MXN $27,142.50 / USD $1,357.13 to MXN $2,714,250.00 / USD $135,712.50.
The reform shall enter into effect 180 days after its publication in the Official Gazette of the Federation, that is, on June 22, 2025.
The Mexican Social Security Institute (IMSS) will have 180 calendar days to draft a proposal to reform the Social Security Law based on the results of the pilot test aimed to insure digital platform employees, to comply with the new obligations, set forth by this reform.
Finally, the National Workers’ Housing Fund must publish, within 5 days after the entry into force of the reform, the general rules that guarantee compliance with the special obligations of the companies that operate digital platforms.
This note was prepared with the support of Gabriela Guadarrama García and Ana Paola Guevara Martínez. The labor and employment lawyers of Basham, Ringe y Correa, S.C., remain for any further comments or questions.
Sincerely,
Jorge G. de Presno Arizpe
David Puente Tostado
Luis Álvarez Cervantes
lalvarez@basham.com.mx
