Background on the Issue
The Coparmex, led by Juan José Sierra, has raised concerns about the potential increase in informality and price hikes for consumers if the Mexican Congress does not consider reducing work hours through special regimes and flexible mechanisms by sector and industry.
Chile’s Reform as a Reference
Coparmex referenced Chile’s 2023 reform, which implemented a gradual five-year plan to reduce the workweek from 45 to 40 hours, allowing flexible models and formulas for work schedules.
“This experience confirms that successful processes are those accompanied by productivity policies, training, and differentiated adaptation schemes,” Sierra explained.
The International Labour Organization’s (ILO) Recommendation 116 outlines fundamental principles, including a gradual reduction without affecting income, support for vulnerable sectors, and balance between well-being and economic sustainability.
Coparmex’s Proposed Flexible Model for Mexico
Coparmex suggests that Mexico should create its own path, acknowledging its productive diversity and designing a flexible model that safeguards formal employment.
They emphasize the need for a strategic implementation based on evidence and gradualism, applying work hour reductions by sectors, prioritizing those with favorable conditions and conducting periodic impact assessments.
Additionally, they propose special regimes for continuous operation sectors like mining, manufacturing, private security, and logistics, where extended work hours are structural and necessary. The extraordinary work schedule and its payment method should be analyzed to avoid distortions harming workers and employers.
Complementary Measures for a Smooth Transition
To encourage the shift towards reduced work hours without affecting workers’ net income or overburdening companies, Coparmex proposes two complementary measures:
- 100% deductibility of labor benefits
- Review of the ISR and employment subsidy schemes
These actions will strengthen formalization and protect workers’ purchasing power while ensuring financial sustainability for productive units.
Impact on Small and Medium Enterprises (SMEs)
Coparmex highlighted that failing to implement flexible mechanisms would particularly affect SMEs, where over 7.3 million people work more than 40 hours a week.
“Any transition must start with these structural realities and avoid an implementation that leads to informality, layoffs, or deterioration of labor conditions,” Sierra stated.
Key Questions and Answers
- What is Coparmex’s concern? Coparmex warns of potential increases in informality and consumer price hikes if the Mexican Congress does not consider flexible work mechanisms.
- What is the reference case? Chile’s 2023 reform, which reduced the workweek from 45 to 40 hours gradually over five years, serves as a reference.
- What principles does ILO Recommendation 116 outline? The fundamental principles include a gradual reduction in work hours without affecting income, support for vulnerable sectors, and balancing well-being with economic sustainability.
- What flexible model does Coparmex propose for Mexico? Coparmex suggests a flexible model acknowledging Mexico’s productive diversity, with gradual implementation by sectors and special regimes for continuous operation industries.
- What complementary measures does Coparmex propose? Coparmex proposes 100% deductibility of labor benefits and a review of the ISR and employment subsidy schemes.
- Which sector would be most affected by the lack of flexible mechanisms? Small and Medium Enterprises (SMEs) would be significantly impacted, with over 7.3 million people working more than 40 hours a week.
