Inside Amazon's shadow workforce in Mexico

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 a member of 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.

ARCHIVE PHOTO: A view of the Amazon fulfillment center in Mexico City, Mexico, September 12, 2017. REUTERS/Edgard Garrido

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 largely prohibit subcontracting has been passed - which supporters say will improve labor rights and could force Amazon and other companies to hire most of their workers directly as staff.

The reforms were designed to stop the proliferation of illegal subcontracting arrangements, which have become a "breeding ground for labor abuse", Salafranca said in an interview.

"The phenomenon is a metastasizing cancer," he said.

ARCHIVE PHOTO: The logo of Amazon is seen at their new Amazon warehouse during its opening announcement on the outskirts of Mexico City, Mexico July 30, 2019. REUTERS/Carlos Jasso

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.

Since opening its first Mexico warehouse in 2015, Amazon has grown rapidly by relying on subcontracted workers. It has announced further expansion in line with a global spree that saw it hire 500,000 more people in 2020 to hit 1.3 million workers.

Amazon told the Thomson Reuters Foundation it had created at least 10,000 direct and indirect jobs since starting operations in Mexico, including both year-round and temporary workers.

"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.

'They pretend it's great'

ARCHIVE PHOTO: An employee is seen in one of the corridors at the new Amazon warehouse during its opening announcement on the outskirts of Mexico City, Mexico July 30, 2019. REUTERS/Carlos Jasso

When Amazon opened a major warehouse in Mexico State in 2019 - among 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 and one current workers interviewed for this story, who started working for Amazon as subcontractors without the perks of staff roles.

Prospective Amazon warehouse workers in Mexico are recruited mainly through a handful of staffing agencies. They find adverts on Facebook or stands on the street, and are usually contracted for four 12-hour shifts a week.

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.

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

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

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.

Another former worker said they refused to sign Adecco exit papers when let go after more than a year at Amazon. They tried to negotiate the severance they were owed and an Adecco staff member threatened to blacklist them from future jobs, they said.

ARCHIVE PHOTO: Amazon packages are seen at the new Amazon warehouse during its opening announcement on the outskirts of Mexico City, Mexico July 30, 2019. REUTERS/Carlos Jasso

Christian Montiel worked night shifts at an Amazon warehouse in Mexico State for eight months via staffing agency Adecco. He quit when he realized a staff job was unlikely to materialise.

"The schedule is really tough, it's 12 hours of walking ... they measure everything," said the 38-year-old, who quit in April 2020. "They pretend it's great, (but) once you're inside (and) you see the labor conditions, it's really difficult."

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 knew that the practice of making workers sign blank resignation papers before starting their job was common in the industry.

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

ARCHIVE PHOTO: An employee is seen at the new Amazon warehouse during its opening announcement on the outskirts of Mexico City, Mexico July 30, 2019. REUTERS/Carlos Jasso

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

The three labor lawyers told the Thomson Reuters Foundation that subcontracting non-specialized warehouse work and having staff and contractors in the same roles - which the Amazon workers described - was illegal even before the new legislation.

"Where's the humanity and respect for workers' dignity?" said one of the lawyers, Rafael Avante, who was previously head of inspections for the labor ministry.

"(Instead of) benefiting workers, they (Amazon) are trying to find a way of somehow haggling rights away from them."

While Amazon is facing battles over labor rights in several nations from the United States to Germany, there has been little scrutiny of its treatment of workers in Mexico, where government labor oversight has been hobbled by scant resources and data.

People protest in support of the unionizing efforts of the Alabama Amazon workers, in Los Angeles, California, U.S., March 22, 2021. REUTERS/Lucy Nicholson

The new subcontracting law - which was backed by President Andres Manuel Lopez Obrador and passed this month - puts the spotlight on the labor practices of major employers like Amazon.

The legislation prohibits the subcontracting of jobs to third-party agencies - which employ at least 4.5 million workers across Mexico - except for specialized services outside a company's main business.

"Social inequality is largely a product of these kinds of practices that have deformed the world of work in Mexico (and) have allowed exploitation," said Senator Napoleon Gomez, who heads the Senate labor committee and advocated for the law.

"There's a call to companies ... to really take on a bigger social responsibility, to accept that this system has to change," Gomez said in an interview to discuss the findings.

Asked how it would respond to the bill - before it was passed - Amazon said it complied with local laws and would continue to do so.

Mandatory overtime

ARCHIVE PHOTO: Amazon packages are seen at the new Amazon warehouse during its opening announcement on the outskirts of Mexico City, Mexico July 30, 2019. REUTERS/Carlos Jasso

In the warehouses, overtime was often mandatory - with employees made to work beyond legal limits - according to testimony from nine workers and WhatsApp messages from Amazon.

"Hi guys, good afternoon, letting you know that ALL OF YOU have MANDATORY overtime on Saturday," read a WhatsApp message from Amazon HR in one worker group. The same phone number is on the Facebook profile of someone listed as an Amazon HR employee.

"NOTE: Remember that when it's mandatory overtime and you don't come it counts as an unjustified absence," it read.

The Amazon workers' regular mandatory 60-hour weeks were likely illegal, according to the three lawyers, as labor law allows a 48-hour week with up to nine hours obligatory overtime only in extraordinary circumstances. Anything beyond that 57-hour limit must be agreed with workers, they said.

Several workers said failing to show up for obligatory overtime meant they lost punctuality and attendance bonuses and allowances for paid time-off worth more than 400 pesos ($20).

"They treat it as an unjustified absence, which they shouldn't ... and on top they discount (your pay)," said Indira Larrinua, a 30-year-old former Amazon worker, who said she was not told about the overtime when hired by Kelly Services.

ARCHIVE PHOTO: An employee applies a tape on a box after she packed at the new Amazon warehouse during its opening announcement on the outskirts of Mexico City, Mexico July 30, 2019. REUTERS/Carlos Jasso

"Because of the need to work sometimes you just say: 'Too bad, I'll put up with it'," she said.

Kelly said it was committed to doing the right thing and complied with all applicable laws, adding that it had no further comment in order to protect the individual's privacy.

Another worker said she was made to work overtime almost every week for more than two months during the pandemic.

Amazon said depending on demand it offers workers the possibility of extra hours with higher pay in line with the law.

"Our workers appreciate this approach as it gives them the option of additional income," the spokeswoman said.

'It was hell'

Former Amazon warehouse worker Nayeli Contreras, 32, poses for a photograph in Mexico State, Mexico February 3, 2021. Nayeli is one of 15 former Amazon Mexico warehouse workers who said they were mistreated in their time there. After getting COVID-19 in May 2020, she needed four months off. When she returned she asked for a less physical role and was pressured to resign, she said. Thomson Reuters Foundation/Christine Murray.

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

But only two of the 16 workers - one of them being Hidalgo - received the badge, which entails benefits such as a company savings scheme.

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 and took four months off work to recover. After returning in September, she felt weak and asked if she could do a less strenuous job such as packing items instead of picking them off the shelves.

Contreras was told by outsourcing agency DCH to either keep picking or find other work, and they 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. "There wasn't a single person who said: 'We can help you' ... it was hell."

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.

Other former workers described regular mass layoffs of dozens of staff and said they believed the high turnover was a tactic to prevent people building up the years of service that entitle them to larger severance payments.

ARCHIVE PHOTO: An employee looks for items in one of the corridors at the new Amazon warehouse during its opening announcement on the outskirts of Mexico City, Mexico July 30, 2019. REUTERS/Carlos Jasso

Of ten 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.

Two former workers hired by Kelly and DCH - who spoke on condition of anonymity - said they were forced to sign voluntary resignation papers in order to receive their last paychecks.

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.

Job or justice?

ARCHIVE PHOTO: A security guard checks an employee at the main entrance of the new Amazon warehouse during its opening announcement on the outskirts of Mexico City, Mexico July 30, 2019. REUTERS/Carlos Jasso

Workers across Mexico who have been mistreated or unfairly fired during the pandemic face years before their complaints are resolved due to a huge backlog of cases at labor tribunals.

Labor lawyer Manuel Fuentes has worked on cases against recruitment agencies and said he had also tried to help outsourced workers for Mexican companies unionize.

He said firms used various tactics to overwork and lay off workers and were savvy at doing so without leaving a paper trail that could leave them liable for compensation or face sanctions.

Winning such cases is difficult as labor tribunals give more weight to paperwork - which employees may have signed under pressure - over testimony and workers are reluctant to risk losing their jobs to seek redress, according to Fuentes.

"Right now, many workers prefer to give up their rights in order to keep their jobs," he 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 need to be big questions asked about the motives," Forde added.

ARCHIVE PHOTO: Jeff Bezos, president and CEO of Amazon and owner of The Washington Post, speaks at the Economic Club of Washington DC's "Milestone Celebration Dinner" in Washington, U.S., September 13, 2018. REUTERS/Joshua Roberts

Labor lawyer Carlos de Buen Unna said that under Mexico's new outsourcing law, Amazon would likely have to hire its contract workers as staff, although he added that the company's reaction remained to be seen.

Amazon's founder and outgoing chief executive officer Jeff Bezos said this month in a letter to shareholders that the company had to do more for its employees while pushing back at criticism that workers were treated "as robots".

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 the workers who said they were mistreated while in pursuit of a staff position at Amazon.

"It was complicated just to be able to go to the bathroom," former worker Larrinua said.

"How can there be companies that treat people this way ... and no-one does anything about it?"

Reporters: Christine Murray and Avi-Asher Schapiro
Text editing: Kieran Guilbert and Belinda Goldsmith
Illustration: Surasti Puri
Producer: Amber Milne