The reduction in working hours without flexibility in hirings can foster informality and unfair competition, warned the Restaurant Chain Directors (Dicares) organization.
In taking a position in regard to the reduction of weekly working hours from 48 to 40 hours, they stated that it is common for these establishments to hire people to work exclusively on weekends, but that they currently have to register them as full-time employees.
“It is essential that the IMSS [Mexican Social Security Institute] be modernized and hiring schemes are made flexible. In the restaurant sector, for example, it is very common to have personnel that works exclusively on weekends, but we currently have to register them as full-time employees. This rigidity does not adjust to the operational reality of the sector”, they emphasized.
They added that there is the risk that many small businesses be forced to operate outside the law, hiring personnel with no social security or with extended working hours without the corresponding payment for overtime if this situation is not modified.
“This creates unfair competition, where those who comply with the law are at a disadvantage compared to those that do not, thus affecting equity in a market that is already very competitive”, Dicares stated.
The organization requested that all parties involved be heard and it proposed that the change is made gradually, to enable companies to adapt without putting their viability at risk, particularly in the case of small and medium-sized companies.
For its part, the Mexican Franchise Association said that the reduction in the number of working hours should be accompanied by incentives for the brands, particularly in the service sector, which has very tight margins.
“Franchises contribute around 5 percent of the GDP (Gross Domestic Product) and we are a key driver of the economy, and, therefore, it is important to find a balance that allows it to continue to grow and create jobs”, it stated.
Hourly contracting is proposed
To ensure that companies do not lose competitiveness due to the reduction of working hours, hourly contracting should be reintroduced; it is already established in the Federal Labor Law, warned Oscar de la Vega, a labor lawyer.
He added that companies are still assimilating other labor challenges, such as the increase to the minimum wage and the increase to profit sharing, together with the uncertainty around trade relations with the United States.
“It is necessary to seek operational flexibility schemes that promote productivity and formal employment. This is why we consider that the Federal Labor Law must offer legal certainty in regard to the hourly hiring of workers, so that the eight hour reduction of their weekly working hours is restored. This manner of contracting is already accepted in Article 83 of the Law”, De la Vega said.
He added that while a reduction in the number of working hours has a positive impact on the workers’ well-being, it is also true that this modification will have significant consequences and economic effects both on productivity and on the increase of labor costs.
“The foregoing, together with the fact that employers in the last years have had to face significant labor costs, such as the increase to the minimum wage, substantial increases to the amount of the PTU [Employee Participation in Company Profits] deriving from the regulation on subcontracting, the increase to the number of vacation days, among others”, he considered.
Therefore, it is necessary to seek operational flexibility schemes that promote productivity and formal employment.
