6 key elements in the reform that classifies long hours as labor exploitation

The changes that came into effect this month have the objective of eliminating the practice of inhuman and unfairly compensated working hours. The legal amendment considers that noncompliance may be punishable with prison and economic penalizations.

Note published on June 18, 2024 in eleconomista.com.mx. Human Capital section.

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It is a fact, working hours that exceed the legal limit without the corresponding payment can now be considered as a labor exploitation crime. Even though the reform was not made in the labor legislation, it toughens the penalties of one of the basic aspects of employment relations: the time that people allocate to these activities.

“The reform seeks to discourage the use of long working hours without proper compensation and poses a challenge for the labor market, particularly in the case of small and medium-sized companies that must adapt to comply with the new provisions and avoid penalties by the authorities”, EY says.

The legal amendment has sparked interest and a series of concerns both in workers and in companies. These are some of the basic aspects that must be taken into account:

» 1. Broadening of the definition of labor exploitation

The reform is made to the General Law to Prevent, Punish and Eradicate Crimes in Human Trafficking Matters and for the Protection and Assistance to Victims of these Crimes, and it broadens the definition of labor exploitation.

Before the reform, only three cases were considered to constitute this crime: work in unhealthy conditions and without protection, workloads disproportionate to compensation and salaries below the minimum wage. Working hours above those permitted by law are now added to these.

» 2. Penalties for noncompliance

Working hours as labor exploitation can be punished with penalties of between three and ten years in prison, plus a fine ranging from 542,850 to 5,428,500 pesos, according with estimations by the D&M Abogados Firm.

The penalty can be raised to a range of between four and twelve years in prison when the affected people belong to indigenous or Afro-Mexican communities, and fines can range between 759,990 and 7,599,900 pesos.

» 3. What is the legal limit of hours?

Although the reform does not specifically mention this, the ruling approved by the Federal Congress warns that the proper interpretation in this regard is in accordance with the provisions of the Federal Labor Law [LFT] on overtime.

“It must be interpreted in accordance with the labor law in force, which allows for a person to work overtime and receive compensation in exchange”,  the ruling states.

That is, the crime takes place when the limit of 48 hours and the maximum overtime are exceeded: up to three hours per day and nine hours per week. However, the D&M Abogados Firm, considers that “the law allows other instances that, being regulated, are evidently legal (…) while the rules and criteria deriving from the Labor Law are applied, no type of crime will be constituted.”

» 4. Bosses can be accused

There is jurisprudence that stipulates that the representatives on entities are also criminally responsible for the crimes committed in the name of the entities, EY specifies.

In this sense, “directors, managers, administrators and other representatives of corporations are personally liable for the criminal acts that they commit under corporate representation”, the Firm emphasizes.

» 5. Review of working hours

The legal amendment can apply to any employer or work center that fails to comply with the labor legislation. In this sense, the first effect, and recommendation, for all companies is to review their working hours.

In this exercise, EY points out, it must be verified that legal limits and overtime are also observed for management employees holding a position of confidence, “as well as informing and training workers on their rights and obligations in regard to working hours and the payment of overtime.”

» 6.  Is it filed through criminal law or through labor law?

Being a crime of labor exploitation, it has criminal implications, and it can be filed before the Attorney General. But an alternative is to report it to the Department of Labor and Social Welfare (STPS) through email at [email protected], so that the agency can verify the case and notify the judicial authorities, suggests Diego García Saucedo, Managing partner at García Velázquez Abogados.

In the opinion of the specialist, this could not only lead to the investigation of the possible crime of labor exploitation, but it would also generate a financial penalty for noncompliance with the Federal Labor Law.

What is the panorama of working hours in Mexico?

According to the latest quarterly data from the National Survey of Occupation and Employment  (ENOE), nearly 4.8 million subordinate workers have working hours of more than 56 hours per week. This universe represents 12% of the total number of salaried workers.

The legal framework of working hours and the payment of overtime is the second most recurrent noncompliance identified by the STPS through general working conditions inspections.

By economic activities, the services sector is the one with the most people with working hours above the legal limit. Of the population that exceeds the limits of working hours, 62% are found in these activities. By subsectors, commerce, transportation and professional and lodging services have the highest proportions of employees with working hours above what is established in the LFT.

In terms of working hours, Mexico is positioned as the economy with the highest number of working hours among those belonging to the Organization for Economic Cooperation and Development (OECD). In our country, people spend an average of 2,226 hours per year on work activities, which is 27% higher than the median of the economies that comprise the organization.

The excessive working hours have also been noted by the International Labor Organization (ILO) as the main occupational risk, almost four out of every ten deaths in the world relating to work are caused by long working hours and their effects on people´s health.

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