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Companies hiring in Mexico could soon have to make sure that 5% of people on their payroll are over 60 years old, after new legislation passed through the Senate unanimously.
The older adult quota is part of an effort to tackle unemployment and underemployment among people over 60 years old, whose lack of formal job prospects make them particularly likely to enter into the informal sector.
“This is a vulnerable sector that faces an unfortunate reality in which most of the time employers limit their hiring. Although the retirement age in the country is between 60 and 65 years of age, the reality is that in many cases people are forced to continue working because they have very low pensions,” said Senator Mayuli Latifa Martínez of the opposition National Action Party (PAN), according to Forbes Mexico.
The legislation involves a reform of Article 132 and 133 of the Federal Labor Law (pdf) that will compel companies with 20 employees or more to meet the 5% quote, which will effectively mean that when hiring in Mexico, one in every 20 will have to be at least 60 years old.
That will reportedly affect approximately 245,000 companies — around 5% of those registered in Mexico — with the rest not employing 20 people.
That will only affect direct employers in the country, with those who employ professionals in Mexico through an employer of record (EOR) or other type of outsourcing arrangement not having to worry about meeting the quota — though the EOR will have to.
SEE ALSO: Employer of record in Mexico: 6 easy steps to rapid, compliant hiring
Speaking ahead of the vote, the secretary of the Labour and Social Welfare Commission, opposition Senator Patricia Mercado, said that the labour market is “limited for the so-called third age”, because there are no spaces in the workforce to take advantage of the experience and skills of older people.
“The accelerated development of technology, digitalisation and automation has caused a displacement of older adults from jobs and the training deficit makes it more difficult for them to find employment in technology-intensive jobs, which are dynamic sectors, but they can be employed in personal services, care and other areas that benefit from their experience,” Mercado was reported as saying by El Economista.
If you are interested in hiring in Mexico without needing to set up a local entity or worry about compliance with unfamiliar legislation, contact us today.
Hiring in Mexico: law seeks to cut older adult unemployment
According to the discussions in Mexico’s upper house, the employment rate among the country’s over 60s stands at just 38%, with an estimated 85,000 people in the age range actively seeking work. Meanwhile, according to the National Survey of Occupation and Employment (ENOE), of the 5.9 million people over 60 who are employed, 57% are self-employed.
In many cases, that will be informal employment, meaning that those people do not enjoy the same benefits as formal employees, such as access to public health services.
According to the Economic Commission for Latin America and the Caribbean (ECLAC) and the International Labour Organisation (ILO), a high percentage of self-employed older adults may partly be linked to discrimination that prevents them from accessing salaried work.
In many cases, job seekers over the age of 60 experience limitations in accessing employment and social protection, with a high proportion of companies hiring in Mexico not providing opportunities for older adults, or only offering roles with limited job security.
The situation led to the reform currently passing through the Mexican legislature, which was first proposed by the congress of the northwestern region of Baja California, and initially included a 20% quota, later reduced down to 5% during discussions.
With the proposed legislation on hiring employess in Mexico passing through the country’s senate easily, it must now be discussed and approved by the country’s lower house, the Chamber of Deputies, before being sent for presidential approval, in the event it is passed without modification.
With the legislation enjoying cross-party support in the Senate, lower house and presidential approval appear to be little more than a formality. That means, adhering to the older adult quota is likely to become an important consideration for any medium- and large-sized companies directly hiring in Mexico in the near future.
Serviap Global can assist you with hiring in Mexico
At Serviap Global, we support companies interested in hiring in Mexico in multiple ways.
For anyone looking to quickly and compliantly hire team members without setting up a legal entity, we offer international PEO / EOR services, while we also support companies with hiring international independent contractors. For those looking to hire directly, we also offer global talent acquisition services.
We started out in Mexico in 2010, before expanding throughout Latin America and then arround the world, so that today we are able to assist companies in over 100 countries globally.
Contact us today to discuss how we can assist you. Or book a call with one of our consultants.
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