New Labor Obligations Contained In USMCA Present Risks For Covered Employers

In effect since July 1, 2020, the United-States-Mexico-Canada Agreement ("USMCA") replaced the North American Free Trade Agreement ("NAFTA"). Although the worldwide COVID-19 pandemic largely overshadowed the effective date of this new international agreement, its new labor provisions should not go overlooked. While the USMCA retains most of the NAFTA commitments, it revamped the old agreement in key areas — including labor. Unlike NAFTA that included some labor commitments in a side agreement, the USMCA provides labor standards in the core text of the agreement (Chapter 23, Labor), making them fully enforceable.

The commitments on labor are not only relevant to manufacturers located in one or more of the USMCA countries, but also companies that rely on these goods as inputs into their supply chains. This article provides a broad overview of the labor standards contained in Chapter 23 of the USMCA — with a particular emphasis on the Facility-Specific Rapid Response