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INSIGHT-Inside Amazon's shadow workforce in Mexico

* Amazon reliant on staffing agencies to fill warehouses in Mexico

* More than a dozen workers outline mistreatment and dismissals

* Outsourcing reforms could force change in Amazon labor practices

MEXICO CITY, April 28 (Thomson Reuters Foundation) - After six months of shifts moving boxes at an Amazon warehouse near Mexico City as a contract worker, Jaime Hidalgo believed job security and brighter prospects beckoned when he received the company’s “blue badge” making him staff.

Hidalgo, 35, was convinced the mandatory overtime and 60-hour weeks had been worth it as he became a fully-fledged Amazon employee - but within weeks he was fired when a stomach bug meant more bathroom breaks and less time on the warehouse floor.

He is one of 15 former Amazon.com Inc workers in Mexico who told the Thomson Reuters Foundation that they were mistreated or unfairly dismissed after being recruited through labor agencies to work in warehouses for the e-commerce giant.

Interviews with workers, copies of pay slips, and WhatsApp messages from Amazon HR reveal that many had to work overtime beyond legal limits while others were let go without severance, forced to resign, or laid off after falling ill with COVID-19.

“I felt the world crashing down on me,” Hidalgo said of his dismissal by Amazon having initially been recruited by one of the third-party firms used by the company to grow its workforce.

“You feel betrayed and disappointed,” added Hidalgo, who was fired in December and now works for another online retailer.

In response to a list of questions, Amazon did not address individual worker accounts but said it complied with labor law in all the countries where it operates and “nothing was more important than the safety and well-being” of its employees.

Three labor lawyers, however, said several of the practices described by the former Amazon workers broke Mexican labor law, from excessive forced overtime to the use of contractors for non-specialized work and layoffs without severance being paid.

In an interview, the head of Mexico’s Ministry of Labor and Social Welfare’s Decent Work Unit, Alejandro Salafranca, said there had been no complaints about or federal labor inspections of Amazon facilities in recent years.

The conditions described by the former Amazon workers could be grounds for an inspection by labor officials, he said.

In response to Salafranca’s comments, Amazon said it was proud to contribute to the Mexican economy providing a wide range of jobs while complying with applicable legislation.

The findings come as a Mexican law to restrict subcontracting was passed this month which supporters say will improve labor rights and could force Amazon and other companies to hire most of their workers directly as staff.

The reform was designed to stop the proliferation of illegal subcontracting arrangements, which have become a “breeding ground” for labor abuse, Salafranca said in an interview.

Mexico’s workforce is mostly informal and low-paid and the coronavirus pandemic has cost millions of jobs, leaving more people competing for fewer positions.

While Amazon is facing labor battles in nations from the United States to Germany, there has been little scrutiny in Mexico, but the new subcontracting law could change that by prohibiting the subcontracting of jobs to third-party agencies except for specialized services.

“There’s a call to companies ... to really take on a bigger social responsibility, to accept that this system has to change,” said Senator Napoleon Gomez, who heads the Senate labor committee and advocated for the law.

Amazon said it had created at least 10,000 direct and indirect jobs in Mexico since opening its first warehouse in 2015.

“All our workers receive a competitive salary and legal benefits and we are clear with our workers about the expectations and work-related benefits that we give,” a spokeswoman for Amazon in Mexico said in an emailed statement.

More than two-thirds of Amazon’s Mexico warehouse workforce is outsourced to contractors - known informally as a “shadow workforce” - workers estimated. The company does not publish any such data and declined to give a figure when questioned.

‘THEY PRETEND IT’S GREAT’

When Amazon opened a major warehouse in Mexico State in 2019 - its largest in Latin America - operations director Luis Correa stood next to local officials and said the company had created thousands of jobs with comprehensive benefits “from day one”.

But the reality was different for the 15 former workers and one current worker interviewed for this story, who started work for Amazon as subcontractors without the perks of staff roles.

Most of those interviewed spoke to the Thomson Reuters Foundation anonymously to protect their jobs or due to fear of reprisals. Two were let go during the reporting of this story.

Only one worker among those interviewed had received a copy of their contract as required by law. Labor lawyers said the lack of paperwork and nature of subcontracting meant complaints were difficult to pursue.

Many of the workers - who got paid about 25 pesos ($1.25) an hour plus bonuses, above the minimum wage of about 18 pesos - said they were often forced to do overtime under the threat of losing pay or being fired.

According to testimonies from nine workers and WhatsApp messages from Amazon, overtime was often mandatory and beyond legal limits which cap extra work at 57 hours and only in extraordinary circumstances.

“NOTE: Remember that when it’s mandatory overtime and you don’t come it counts as an unjustified absence,” read a WhatsApp message from Amazon HR in one worker group. The same phone number was on the Facebook profile of someone listed as an Amazon HR employee.

Amazon said it offers workers the possibility of extra hours with higher pay in line with the law and many workers “appreciate this approach”, the spokeswoman said.

A former recruiter who worked for Kelly Services for three months in 2020 said the agency warned people they could be let go at any time but did not tell them about mandatory overtime.

The woman - speaking on condition of anonymity - said she had not been directly involved in hiring paperwork but also knew that the practice of making workers sign blank resignation papers before starting their job was common in the industry.

Two former Amazon workers - including 37-year-old Rafael Bobadilla - said they were required to sign blank resignation papers by the recruitment agencies before starting work.

“I knew in theory it was illegal,” said Bobadilla, adding that he signed the documents after finding Amazon work in 2019 with the recruitment agency DCH because he needed the income.

The staffing agencies referenced by the former Amazon workers - The Adecco Group, Kelly Services and DCH - did not directly address individual accounts or the general findings presented by the Thomson Reuters Foundation.

In response to emailed questions, a spokeswoman for the Adecco Group said it did not disclose information on working conditions or operations with business partners, but that it complied with labor law in all countries including Mexico.

Kelly Services said it was committed to complying with local laws where it operates, adding that it was policy to not comment on work with specific clients.

DCH said it could not respond to questions because the information provided was “sensitive and distorted”.

SUBCONTRACTING UNDER SCRUTINY

Many of the interviewed workers said they saw the difficult working conditions and long hours as a means to the end of potentially obtaining a Amazon blue badge and staff status.

But only two of the 16 workers were made staff.

The hope of becoming a full-time employee kept 32-year-old Nayeli Contreras going through eight months of night shifts.

“You can’t complain, you have to put up with it,” she said, recalling one month when she had to work overtime for four consecutive weeks beyond the limit permitted by law.

“You go in (to the warehouse) with the hope of a better future, a better job, better conditions.”

But Contreras contracted COVID-19 in May last year, taking four months off, and asked to do a less strenuous job than packing when she returrned in September. Outsourcing agency DCH refused and ultimately pressured her into resigning, she said.

“My last experience in Amazon was the most horrible thing that could have happened to me,” she said.

Four other workers who contracted COVID-19 last year said they were let go while off sick or soon after returning to work.

Amazon said all workers who contracted COVID-19 were given two weeks of paid sick leave.

Of 10 workers let go by Amazon, most said they received no severance pay, only wages owed. Several believed they were owed money, but never received a copy of paperwork to dispute it.

Amazon said it complied with all laws and had strict internal policies to ensure fair and consistent treatment of its workers, adding that they were encouraged to raise any issues.

“We’re proud to contribute to the Mexican economy through the creation of a wide variety of jobs with industry-competitive salaries with comprehensive benefits, as well as the possibility to develop and make a career at Amazon,” the spokeswoman said.

Amazon’s labor model in Mexico is part of a global trend as corporations try to avoid a direct relationship with workers, said Chris Forde, co-director of the Centre of Employment Relations Innovation and Change at Britain’s Leeds University.

But outsourcing the majority of a workforce to a staffing agency usually leads to a poor deal for the employees, he said.

“There’s a role for private agencies, but when they are being used to provide the core workforce for a firm there needs to be big questions asked about the motives,” Forde added.

But any labor reforms - whether imposed by the Mexican government under the new law or led by the e-commerce giant itself - will come too late for many workers.

“It was complicated just to be able to go to the bathroom,” said Indira Larrinua, a 30-year-old former Amazon worker.

"How can there be companies that treat people this way ... and no-one does anything about it?" (Reporting by Christine Murray and Avi Asher-Schapiro, Editing by Kieran Guilbert and Belinda Goldsmith. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers the lives of people around the world who struggle to live freely or fairly. Visit news.trust.org)

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