(Bloomberg) -- Mexico’s Lower House of Congress approved the general text of one of the most aggressive labor reform bills in the world, which would give additional rights and benefits to gig workers employed at digital apps like Uber Technologies Inc. and Didi Global Inc.
The reform, proposed by President Claudia Sheinbaum, passed on Tuesday with 462 votes in favor, none against and no abstentions, according to a Lower House post on X. Lawmakers will continue the discussion of individual articles of the bill.
The proposal, which now goes to the Senate where the ruling party also has a large majority, would establish that drivers or couriers who earn Mexico City’s minimum monthly wage working for these apps, 7,468 pesos (around US$370), must be considered employees and receive all legal benefits, “regardless of the time actually worked.”
Workers that earn less than the monthly minimum wage will be considered self-employed and won’t have access to all of the benefits, but the companies must offer accident insurance. The plan prohibits companies from manipulating workers’ contracts to maintain their status as independent workers.
Social security
The reform requires that companies register and cover their employees’ social security benefits, including health services, work risk insurance and housing credits.
Another key element of the proposal would grant app workers the ability to form unions and collectively bargain to change their working conditions, which would be enforceable by government authorities. Companies that defy the law may be punished, including financial penalties proportional to the level of non-compliance.
The bill also allows workers to participate in company profit-sharing programs, provided they have worked more than 288 hours during the year.
The proposal was inspired by similar laws approved in other countries, such as the so-called Riders Law passed in Spain in 2021, requiring digital platforms to hire delivery drivers who previously worked as independents; and a 2022 law in Chile that gave gig workers the right to social security, insurance against damages and the right to unionization and collective bargaining, among other benefits.
About 658,000 people work on digital platforms in Mexico, of which 272,000 earn more than the minimum monthly wage, according to government data.
Sheinbaum’s administration said there will be no tax increase for workers and all the companies have agreed to pay social security contributions, so the impact on workers’ income will be small. In addition, workers won’t be obliged to join a union, according to a government document.
President’s promise
The plan to improve rights for courier and driver app workers was among the 100 promises Sheinbaum made in her inaugural speech on Oct. 1. Congress has already approved a series of constitutional changes proposed by Sheinbaum’s predecessor, Andres Manuel Lopez Obrador, including a controversial judiciary reform, changes to give priority to state-owned power companies over private ones, and a constitutional reform that guarantees increases to the country’s minimum wage.
Last week, an association of courier and delivery providers, Alianza in Mexico, which represents companies including Uber, Didi and Rappi Inc. called on Congress to continue a dialogue on the proposal that includes the government, lawmakers, representatives of digital platforms and workers. The group said that several topics require further analysis, including greater clarity on the taxes that will be applied to the digital platforms and details on social security guidelines.
©2024 Bloomberg L.P.