Exclusive: Mexico Seeks to Secure Social Security for Workers in the Gig Economy

The proposal would ensure platforms such as Uber, DiDi, Beat, Rappi and other apps provide social security benefits to their workers

Mexico's Labor Minister Luisa María Alcalde. (Photo: Bloomberg Línea/Daniel Hernández)
September 29, 2022 | 12:10 PM

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Mexico City — The Mexican government plans to send a reform initiative to Congress in October that, if approved, would require digital platforms such as Uber, DiDi, Beat, Rappi and other apps to recognize their collaborators s employees and register them with the country’s Social Security Institute (IMSS), the country’s Labor and Social Security Minuster Luisa María Alcalde told Bloomberg Línea.

Alcalde said the ministry has been working with various companies in the sector and with workers in the so-called gig economy to reach a consensus on a reform proposal to be discussed and eventually approved in the current Congressional session.

The objective is that by 2023 a new legal framework will be in place that regularizes and recognizes the labor relationship of half a million workers who are employed on digital platforms but who today work in the informal sector and without any social protection.

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“I would expect that next month [October] the discussion could be concluded, and then there could be a consensual proposal that could be presented to Congress, and then it would be up to Congress to give the green light.”

Luisa María Alcalde, Mexico's Labor Minister

Alcalde pointed out that, with a recognition of the labor relationship between delivery drivers and chauffeurs and the digital platforms that contract them, the reform will make it mandatory for Uber, DiDi, Beat and Rappi, among other companies, to register their workers with the IMSS.

The reform proposes creating a special chapter on digital platforms in the federal labor law where the recognition of labor relations will be established, and which would put an end to the practice of naming the people employed through such applications as partners or service providers.

“There would be an obligation on the part of the companies to incorporate workers into the IMSS and to provide them with social security protection. Not to do so would be to widen the margin of women and men who work every day and who do not have any kind of protection, which is why we believe it is so important that this discussion take place”

Luisa María Alcalde, Mexico's Labor Minister

On September 30, 2021, the IMSS signed an agreement with digital passenger transportation and food delivery service platforms Uber, Beat, DiDi and Rappi to disseminate and promote the participation of drivers and delivery drivers in the pilot test for the voluntary incorporation of self-employed workers into the mandatory social security regime.

Flexible labor scheme for digital platforms

Alcalde emphasized that, although there would be a recognition of the labor relationship between drivers and the apps, this would have different characteristics compared to that for other workers governed under the federal labor law, since for digital platform workers a flexible scheme is required.

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She explained that the labor relationship of the workers with the platforms is not a traditional relationship where there is a single employer, a fixed work center or a specific schedule, so a flexible scheme that adapts to the labor dynamics of the workers is being worked on.

The ministry, together with the IMSS and the respective companies are fine-tuning the details of the flexible scheme for social security purposes, with a mechanism being reviewed by the IMSS that would allow each of the platforms to respond proportionally with its insurance contributions.

“Workers define the hours and days they work, while even working for different employers at the same time. Therefore, the scheme must be simple and easy in order to be able to respond for the proportional part of the time that the worker spent to provide that service. It is necessary to have an adequate scheme in order to be able to pay what is fair.”

Luisa María Alcalde, Mexico's Labor Minister

Alcalde assured that the flexible scheme that is being devised will not be bureaucratic or complex for workers, nor is it intended to be an additional burden for companies, but rather a simple social security insurance procedure.

On whether digital platform workers will have the right to organize into a union, she said that collective rights are guaranteed, so it would be possible to form a union, although such unions already exist.