On December 24, 2024, the decree that reforms the Federal Labor Law ("LFT") focused on the regulation of employee rights of digital platform workers was published in the Official Gazette of the Federation. This reform significantly modifies labor relations in a sector characterized by flexibility to workers.
The reform adds Section VI to Article 49; Section IV to Article 50; Section IX to Article 127; and includes a Chapter IX Bis, called "Work in Digital Platforms", which includes Articles 291-A to 291-U. Article 997-B is also incorporated to the Federal Labor Law. This regulation will become effective 180 days after its publication.
Who will have legal recognition and new labor rights?
The reform establishes for the first time a legal framework that recognizes digital platform employees as subjects of labor rights. Article 291-A indicates that work on digital platforms will be regulated by labor law, and defines it as "a subordinate labor relationship consisting of the performance of remunerated activities that require the physical presence of the employee for the provision of the service, which are managed by an individual or legal entity in favor of third parties through a digital platform, using information and communication technologies to exercise command and supervision over the employee."
In what cases are Digital Platform Workers considered self-employed?
An employee of digital platforms is the person who provides personal, remunerated and subordinated services, and generates monthly net income equivalent to at least one month’s minimum wage of Mexico City for their work, regardless of the time actually worked.
On the other hand, that person will be considered as self-employed if at the end of each month she is not able to generate the aforementioned income.
Final salary, vacation, profit sharing, and other benefits for Digital Platform Workers
Due to the flexible nature of the work provided, the salary set for the task, service or work performed will already include the proportional payment of benefits. Such as weekly rest day, vacation, vacation premium, Christmas bonus and overtime, being expressly stated in the Law that the payment or recognition of an additional amount for any of these concepts will not be applicable.
What is the effectively worked time for Digital Platform Workers?
Pursuant to Article 291-D of the Federal Labor Law, work on digital platforms will be primarily flexible and discontinuous; therefore, it will be understood that an employment relationship exists during the time actually worked by the digital platform employee.
Work time effectively worked shall be understood as the time from the moment the employee accepts to provide a task, service, work, or job in the digital platform, until the moment in which such service is definitively concluded.
The period of time indicated in Section IX of Article 127 of the Law shall be computed by considering the work time in 45 minutes for each hour and 15 minutes of waiting time for the reception of tasks and services and works. This translates into a factor of 0.75 of activity actually worked for each hour.
Social security for Digital Platform Workers
Provided that the person complies with the requirement to be considered as a digital platform employee, i.e., that he/she generates a net monthly income of at least one minimum monthly wage, the employer is obliged to register him/her as an employee with the Mexican Social Security Institute and withhold and pay the corresponding employer contributions, including those payable to the Mexican Workers Housing Fund Institute (INFONAVIT).
The company through which the service is rendered at the time of any labor accident will be responsible for payment of the insurance under the social security system, which will be applicable to the effective working time in accordance with the calculations established in the LFT.
Fines and penalties
Article 997-B includes fines and penalties for non-compliance with labor protection regulations in digital platforms employment that can reach up to 25,000 UMAS (an economic measurement unit which as of this date equivalent to approximately US $66,000), historically, the second-highest fine that can be imposed on an employer for non-compliance with its obligations.
Reinstatement in case of termination.
Section VI of Article 49 of the Labor Law is added to include employees of digital platforms in cases in which the employer is exempt from the obligation to reinstate the employee in the event of termination of the labor relationship, except in cases in which collective rights of the employees have been violated.
International context for Digital Platform Workers
The modification to Mexico's labor law aligns with a growing global trend to provide better protections for digital platform employees. Here's a comparison with some other countries:
European Union: The EU has been proactive in regulating gig economy employees. The European Parliament passed a directive in 2019 that ensures that platform employees receive transparent and predictable working conditions. Some countries, like Spain, have enacting laws that classify food delivery riders as employees.
United Kingdom: The UK has a mixed approach. While some court rulings have granted gig employees employee-like rights, such as minimum wage and holiday pay, the overall regulatory framework still treats many as self-employed.
United States: The situation varies by state. California's AB5 law, for instance, classifies many “gig workers” as employees, but this has faced pushback and led to Proposition 22, which allows companies like Uber and Lyft to classify their drivers as independent contractors while providing some benefits.
India: India is in the early stages of regulating gig work. The Code on Social Security, 2020, includes provisions for social security benefits for gig and platform employees, but implementation is still evolving.
Argentina: Argentina has also started to recognize the rights of gig employees. In 2020, the government mandated that delivery platforms provide insurance and other benefits to their employees.
Overall, Mexico's new law is part of a broader movement to ensure that digital platform employees receive fair treatment and benefits, similar to traditional employees. This trend reflects a growing recognition of the importance of protecting employees in the gig economy.
How do you think these changes will impact the global gig economy?
This notice is for informational purposes only and does not constitute legal advice. A lawyer should be consulted before making any decision. If you have any questions, please contact us at contacto@dha.mx
