It introduced a general prohibition of outsourcing in all cases in which the activity to be carried out constitutes the “core business” (núcleo del negocio) of a company.

The core business is defined as the activities that are part of the “main activity of the company”. They do not correspond to specialized activities or work that can be outsourced.

These are the main criteria to identify the core business of a company:

• The corporate purpose of the company;
• What is the identity of the company in front of consumers;
• The special characteristic of the company within the market in which it carries out its activities;
• The company’s activity that generates added value for its consumers;
• The company’s activity that usually reports the highest income.

Companies will have 180 days, until 22 August 2022, to adapt to these new rules.

During this transitional period, outsourcing companies are not allowed to terminate the contract of the employees assigned to the core business, unless the main company engages those employees and register them in its own payroll.

The new regulation introduces therefore new cases of outsourcing’s denaturation (the invalidation of the outsourcing scheme, so the outsourced personnel must be included on the payroll of the company and be considered as permanent employees):

• When the purpose of the displacement of personnel is developing the core business;
• When companies do not implement to the new regulations after the 180 day transition period.

These changes may lead to an increase in labour costs due to the incorporation of new workers to provide services that cannot be provided by third party companies.

Moreover, it has to be considered that, to remedy the ban on outsourcing of core business activities, there could also be a reduction in formal employment and redundancies in companies that cannot sustain increases in labour costs.

The National Confederation of Private Economic Institutions (CONFIEP), along with several regional chambers of commerce, has called on the government to repeal the law: "[The law] is a blow to the country's formal workers, employed in this mode, who are now faced with the possibility of losing their jobs or switching to informality. Likewise, it is a detriment to small, medium and large enterprises, which hire various specialised services and will see their production costs increase," they said in a joint statement.

According to them, the main problem with the rule is that it establishes a general ban, assuming that all companies abuse the institute, rather than providing for greater control and supervision of the use of the institute. “Outsourcing is a tool to organise the production of goods and services more efficiently, which is reflected in better prices and more competition for the benefit of the consumer," they said.