Labor reform for digital platforms

On December 24, 2024, a Decree amending Articles 49, 50, 127 and 997-B of the Federal Labor Law (FLL) was published in the Federal Official Gazette, including new Chapter IX BIS regarding work in digital platforms. 

The purpose of the reform is to guarantee employment rights of people who provide their services through digital platforms by recognizing their employment relationship with the Companies that manage such platforms.

Key points of the reform

• Work on digital platforms is defined as the subordinate employment relationship of remunerated activities that require the physical presence of the person for the provision of the service, managed through a platform, to exercise command and supervision, and generate a monthly net income equivalent to a monthly minimum wage, regardless of the time effectively worked.
• Users, consumers or beneficiaries of the platform shall not be considered as employers.
• The work shift shall comprise the time effectively worked, i.e., from the time the employee accepts a task until it is fully completed.   
• Establish individual or collective employment agreements that include details on pay, work equipment, safety conditions and supervision, which must be registered and authorized by the Federal Center for Labor Conciliation and Registration, and may be digitally signed.
• Recognize the right of employees to participate in the profit sharing of the companies that own the platforms.
• In the event of litigation, the employer is not obligated to reinstate employees, except in cases of violation of collective rights.
• For the calculation of the severance payments, employers shall consider 20 days of average salary for the last 6 months, multiplied by each year of services, taking into account the time effectively worked.
• In addition to the grounds for termination set forth in Article 47 of the FLL, the following scenarios are established:
  • Submitting false documentation when registering data in the digital platform;
  • Recklessly compromising the security or privacy of the user or client of the platform;
  • Incurring in security breaches, acts of violence, threats, insults, harassment, and/or sexual harassment or any discriminatory act.
  • Repeatedly incurring in non-compliance of tasks.
• Article 997 - B is included, establishing as sanctions fines of up to 25,000 UMA, that is, approximately $2,714,250.00 MXN. or $134,568.66 USD.

Obligations for the digital platforms

• Payments to employees must be made within a period of no more than one week.
• Implement mechanisms to track worked hours and issue receipts.
• Register employees in the social security system.
• Ensure training and provide safety measures.
• Transparency of remuneration for each task or service.
• Establish mechanisms to prevent discrimination, violence and harassment in the workplace.

Obligations for employees

• Comply with health and safety measures and regulations.
• Comply with schedules and delivery points for the services and tasks.
• Use the mechanisms and systems determined by the platforms for monitoring, connection and communication.
• To comply at all times with data protection policies and mechanisms.
• Conduct themselves with probity, honesty and refrain from discriminatory conduct, workplace violence, harassment and sexual harassment. 

Prohibitions for digital platforms

• Charging employees for their registration, use, separation or similar concepts.
• Child or under-age labor.
• Withholding money in addition to the allowed concepts established in the FLL.
• Restrict employees from connecting to the digital platforms, except for those cases provided for in the FLL.
• Attempting to misrepresent the employment relationship through civil or commercial agreements.
• Outsourcing personnel.

Other considerations to take into account

• Set the salary per task or service, and include the proportional benefits of breaks, vacations, vacation premium and Christmas bonus, which will represent a significant administrative burden for companies.
• There is an important push by one of the unions that represents workers in digital platforms, requesting that the period in which workers are waiting for the application to assign them a route, task or client should be considered as time effectively worked.
• Explain how algorithms that assign tasks work; this shall be integrated into the employment agreements as well as in the algorithmic management policy, which could also reveal certain trade secrets of employers, so it is desirable to implement confidentiality policies.
• The Mexican Social Security Institute (IMSS) will launch a mandatory pilot program for companies to register workers on digital platforms.

When does it take effect?

The labor reform for digital platforms will come into force in June 2025.

Hogan Lovells is ready to help you prepare for these changes and ensure compliance.

Authored by Mary Carmen Fuertes, Hugo Hernández Ojeda, Regina Torrero, Juan Pablo Vazquez, and Almudena Cuesta,