Written by: Alejandra Vidaurre Tugues

The labor reform bill has reached a key milestone with its approval in the House of Representatives, marking significant progress in its legislative process. The bill will now move forward in 2025 with debates in the Senate, where the approved provisions will be reviewed, and its viability will be determined. If it secures a favorable vote, it will proceed to a second debate before potential presidential enactment.

During discussions in the House, amendments were introduced to balance the interests of various labor stakeholders. This has sparked differing opinions regarding its impact on the labor market. Labor unions and workers' organizations support the initiative, arguing that it improves working conditions and promotes formal employment. In contrast, business associations and economic analysts have raised concerns about its potential effects on labor costs, competitiveness, and the sustainability of SMEs.

The approval of the reform will depend on key factors such as consensus between workers and employers, the economic feasibility of its provisions, and political support in Congress. Reaching balanced agreements will be crucial to finding a middle ground between safeguarding labor rights and ensuring business stability.

Companies should prepare for potential changes in contractual stability, adjustments to leave duration, the reduction of working hours, and stricter telework regulations. They may also face modifications in labor obligations, disciplinary procedures, and performance evaluation processes, necessitating a review of internal policies and staff training.

While the reform proposes significant changes to the labor market, it must still undergo two legislative debates and faces strong opposition, making its approval in the short term uncertain. Its future will depend on the ability to foster consensus and a thorough assessment of its economic and social impact.