This reform classifies most workers who provide services through such platforms as employees, which entitles them to employment rights and access to the social security system.
Digital platform workers will be classified as employees if they provide personal, remunerated and subordinated services through a digital platform, so long as they earn a net monthly income from their work equivalent to at least the minimum wage in force in Mexico City (currently MXN 8,364 or USD 418 per month), regardless of the time effectively worked.
Workers who earn less than one minimum (monthly) wage will be considered as independent workers. They are not entitled to full employment protections, but companies that operate digital platforms must still register them with the Mexican Social Security Institute to ensure coverage for occupational risks during the time effectively worked.
The key provisions of the reform include the following:
- All of the time effectively worked is treated as working hours (i.e. from the time the employee accepts a task until it is completed).
- The salary per task or service performed must be paid on at least a weekly basis. It must include the prorated amounts that correspond to mandatory benefits such as rest days, vacations, vacation premium, Christmas bonus and overtime.
- Tips are excluded from the calculation of social security contributions.
- Employers must establish individual employment contracts, with mandatory terms and conditions that are different from those commonly defined by digital platforms. These include specific details on remuneration, work equipment, safety conditions and supervision. The contracts must be registered and authorised by the Federal Center for Labour Conciliation and Registration.
- Covered workers have the right to participate in the company’s profits, provided that they effectively worked more than 288 hours during the tax year. The reform sets forth a specific factor for the calculation and determination of this profit sharing.
- Companies that operate digital platforms must implement a policy that explains the operation of the algorithms used to assign tasks and activities. This policy must be communicated to employees from the start of the employment relationship, and any changes must be notified in a timely manner. The policy must be accepted and signed by the employees.
- Indemnities must be paid for the termination of the employment relationship with digital platform employees.
- Certain mechanisms must be followed by the companies who operate digital platforms to address and review decisions that affect or interrupt the employees’ connection, linkage or access to the digital platform.
- The employment relationship will be considered automatically terminated if the employee stops working for the platform for a consecutive period of 30 calendar days.
The reform also introduces new responsibilities for digital platform companies. They must:
- Set mechanisms to keep track of hours effectively worked and standby times.
- Issue weekly payment receipts for services rendered.
- Implement mechanisms to ensure the security of employees’ information and personal data.
- Register employees and independent workers with the Mexican Social Security Institute.
- Make the proper contributions on behalf of employees to the National Workers’ Housing Fund.
- Establish mechanisms to train and assist employees in properly using the digital platform.
- Provide information on occupational health and safety measures that must be observed by employees in the performance of their work.
- Establish specific procedures to address and follow up on internal complaints or claims raised by employees.
- Provide information to the employees about the payment they will receive for each task.
The Mexican Social Security Institute (IMSS) will have 180 calendar days to draft a proposal to reform the Social Security Law based on the results of a pilot test aimed at insuring digital platform employees, to comply with the new obligations in the reform.
Finally, the National Workers’ Housing Fund must publish, within five days after the entry into force of the reform, general rules to ensure digital platform companies’ compliance with their special obligations under the new law.
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This new reform gives considerable rights and protections to ‘gig economy’ workers in Mexico. The reform will enter into effect on 22 June 2025.
Failure by companies that own digital platforms to comply with these provisions may be sanctioned with monetary fines that range from MXN 27,142 to MXN 2,714,250 (USD 1,357 to USD 135,712).
*Basham, Ringe y Correa S.C.
