IMSS loses 34,000 employers

In the last two years, 34,385 employers were lost nationwide, going from 1,073,736 registered employers in September 2023 to 1,039,351 at the end of August of this year, according to statistics from the Mexican Social Security Institute (IMSS).

Javier Zepeda Orozco, vice president of SME Development at the Confederation of National Chambers of Commerce, Services, and Tourism (Concanaco Servytur), said that the cost per formal worker has increased by more than 50 percent in recent years.

"A worker who cost 100 pesos six years ago now represents an expense of between 168 and 170 pesos, including benefits and social security contributions. If we consider that an SME has 10 workers, where some will inevitably have to take vacations, leave, or sick leave, the cost becomes exponential. Many SMEs cannot bear this financial burden," he explained.

Micro, small, and medium-sized enterprises (MSMEs) are responsible for 68 percent of employment and represent 99.9 percent of the country's economic units, he explained.

The reforms of recent years include an increase in vacation days by law—as of January 1, 2023—which generates higher expenses for employers in vacation bonuses and replacements.

Also known as the Chair Law, a reform to the Federal Labor Law that requires employers in service, commercial, and similar sectors to provide chairs with sufficient back support for employees who work standing up, in addition to allowing periodic breaks during the workday.

Also increases of between 12 and 20 percent annually in the minimum wage over the last five years.

Juan Huerta, leader of the CTM in Jalisco, admitted that overregulation has affected formal employment.

"Our historical defense has been for the dignity of work and better rights, but we also recognize that the multiple regulations and costs have caused many formal businesses to disappear and pushed workers into the informal sector. Today, almost half of the working population is outside the formal sector," he stated.