Background on the Issue
In the face of a global talent shortage, a sudden reduction in working hours would lead to an average monthly increase of nearly 20% in labor costs for operational positions. Moreover, companies would need an additional 15% of operational staff to maintain current operations, according to Global Companies.
Proposed Solutions by Global Companies
To address these concerns, the private organization suggests flexibilizing the weekly limit on overtime hours and eliminating the strict daily cap for overtime within the labor hour reduction reform initiative. This approach would enable better salary compensation for workers without imposing excessive burdens on companies, especially during high-demand periods.
The organization also proposes reviewing the current overtime calculation and cost structure to adapt it to a reduced working hour context. This would ensure fair compensation for workers without overwhelming businesses.
Context and Relevance
Mexico has one of the highest overtime costs globally. Despite this, many employees voluntarily work additional hours to boost their income, even in companies offering above-standard legal benefits.
The 60 international companies forming the Council demand a reform that acknowledges this reality, allowing for additional work hours without compromising labor rights or the balance between professional and personal life.
Impact of Global Companies in Mexico
These Global Companies operate in more than 20 strategic sectors, representing over 40% of foreign direct investment in Mexico and contributing approximately 10% to the country’s Gross Domestic Product (GDP).
With a deep commitment to Mexico, these companies provide employment opportunities for 8 million Mexicans, contributing to family income and personal/professional development.
Proposed Aspects of Labor Hour Reduction
- Gradual implementation: The reform should be implemented progressively to allow businesses and workers to adapt.
- Differentiated schemes by sector and function: Tailoring the reduction to specific industries and roles.
- Flexibility in weekly hour distribution: Allowing companies and employees to adjust working hours within a week.
- Review of overtime regime: Adapting overtime rules to the reduced working hours.
- Adjustment of Sunday premium: Ensuring fair compensation for working on weekends.
- Legal certainty in inspection and supervision: Establishing clear guidelines for monitoring compliance.
- Strengthening talent and labor training: Investing in employee skills development.
Global Companies’ Perspective on the Reform
The Global Companies view this reform proposal as an opportunity to adjust the regulatory framework and actively contribute to a more just, modern, and competitive labor model. They believe that a pluralistic dialogue process based on shared responsibility is essential for creating solutions that benefit workers, businesses of all sizes, and the national economy.
