The recent amendments to Venezuela's Organic Law of Labor and Workers (known as the "LOTTT," for its Spanish acronym) generally prohibit outsourcing. Specifically, the LOTTT, which became effective on May 7, 2012, prohibits contracting through a third party for services to be performed on a permanent basis and carried out within the beneficiary's premises, when the services are directly related to the beneficiary's production process, and the beneficiary's operations would be affected or disrupted without such services. Where a company is found to have "outsourced" a worker, the company and/or its representatives will be liable for severe sanctions, criminal penalties, orders of "reenganche" (reinstatement) and/or orders of appropriation.

For more information on the scope of the amendments and recommendations for companies to ensure compliance with the law, continue reading Littler's ASAP, Outsourcing Under the New Venezuelan Labor Law (click here for Spanish version), by Emma Neher.