Yucalandia is pleased to welcome a guest author as a new contributor, Sr. Solomon Freimuth, who, along with his partners at Calderón & Asociados, has fine expertise in Mexican Law, focusing on key issues affecting expats. Solomon Freimuth and his counterparts have created a very good series of articles on expats rights and responsibilities in Mexico, on Buying Land, on Starting a Business in Mexico, etc on their website: Calderón & Asociados Blog. We welcome Sr. Freimuth’s contribution as a good fit with Yucalandia’s standards of publishing useful, accurate, and thorough articles on issues affecting expats living and visiting Mexico. We offer a brief bio for Sr. Freimuth below.** We look forward to your comments!
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Here is a list of the Major Sections in this Article: (click to Jump to a Section)
Basic Principles of Mexican Labor Law
Must domestic workers receive the same benefits as regular employees?
Employee Benefits Required for Domestic Employees
Who are Employees and Who are Non-Employee (Independent Contractors)
Vacation Pay and The Aguinaldo (Year End “Bonus”?)
How to Calculate the Aguinaldo:
Sidelights & Additional Insights to Common Pay Issues for Mexican Workers
Documentation is The Key!
Mexican Holidays:
Registering Your Employees with IMSS:
Remaining Odds and Ends: Severance Pay and ???:
Key References and Citations:
~ ~ Part Time Cleaning Ladies & IMSS: ~ ~
… To pay or not to pay, that is the question. …
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Basic Principles of Mexican Labor Law
What is an employee?
Mexican labor law says that anyone who performs a subordinated, personal service in exchange for remuneration is an employee. There is a jurisprudencia, or established legal precedent based on decisions of the Mexican Supreme Court, that defines subordination as being at the disposition of the employer during the employee’s shift. Remuneration means to be paid, or in exchange for payment. As a general rule, this means if there is subordination and remuneration, there is an employee-employer relationship and therefore the employee is entitled to certain benefits under Mexican law. 
Mexican labor law is notorious for its tendency to protect the laboring class, therefore the scales of justice are somewhat tipped in the employee’s favor. The burden of proof is always on the employer and as with any other legal process in Mexico, a labor trial can drag on for years. Even when the employer wins a labor case, he will have a large expenditures for lawyer and court fees, but if for some reason the court rules for the employee, the employer also ends up paying all the corresponding benefits owed to the employee and all of the employee’s lost wages from the time the labor dispute started.
This strong tendency towards protecting employees creates collateral reasoning that dictates that it is often a financially wiser decision to: give benefits to all employees when in doubt; and settle labor disputes that arise where employees think that they are entitled to a bonus or severance pay, as opposed to letting the case go to court, no matter how justified the employer may feel in his legal rights.
This part warrants clarification: The letter of the law says that all workers are entitled to labor benefits if the elements of remuneration and subordination exist. That is the law. The custom is something different from common practices, since many people get away with not paying their employees all of the benefits mentioned. In some cases it might not be necessary to pay the benefits (if there truly is no element of subordination, for example), but the author wants to reiterate that there is no clear, general distinction that can easily summarize whether or not a worker deserves labor benefits.
Must domestic workers receive the same benefits as regular employees?
The labor law defines a domestic worker as those workers who provide services of: cleaning, home assistance, and anything else within the home of a person of family. The law goes on to state that anyone that who provides these services for a hotel, bar, hospital, school or other like establishment is not a domestic worker, nor are doormen or concierges servicing multi-unit buildings.
The currently valid labor law has a separate chapter that deals with domestic employees, and mentions that some of benefits that they should receive are different than those given to normal employees. This chapter of the law also mentions that domestic employees are not eligible for profit sharing, which is understandable, considering that the family-home should not generate profit.
A major difference in the section of the law for domestic workers is the assumption that a domestic worker may live in the employer’s home, and therefore is entitled to food, boarding, and sufficient break periods to rest and eat. This is all very common sense stuff, but one consideration that the author finds most important is: The employee’s food and board are calculated as having a value of 50% of the employee’s salary, which can be important in terms of benefits such as bonuses and severance packages. 
Employee Benefits Required for Domestic Employees
Continuing, domestic employees are entitled to all of the other employee benefits given by the law, even IMSS (medical insurance and pension fund) and INFONAVIT (housing fund). Many employers are accustomed to not giving their domestic help these benefits, but in reality the law requires them for any employee. Notice, the author put emphasis on the word employee, again we can enter into the discussion about whether or not an employee-employer relationship exists. **
Here are the author’s opinions, mixed with some examples:
As mentioned above, in strict compliance with the labor law all employees are entitled to labor benefits in Mexico. In the author’s opinion, based on the research done for this article, the distinction can be made as follows:
Who are Employees and Who are Non-Employee (Independent Contractors)?
Employee – In the author’s opinion, a maid or nanny is an employee and therefore is entitled to labor benefits if: the maid/nanny is expected to be at the house from 8:00am to make breakfast for the kids until 4:00pm, receives a wage of $1,500.00 pesos per week, and during the aforementioned hours, the maid/nanny is at the beck and call of the Señora of the house.
Non-employee – The gardener who comes twice a week and for $75 pesos cuts the grass and trims the palm trees, in the author’s opinion, is not an employee and is not entitled to labor benefits.
One final aside: Now that we are in the realm of the author’s opinions, if you are not sure, then pay the annual year-end bonus (aguinaldo), or the severance pay, and get a written receipt for every payment. It has become custom in many parts of Mexico to pay a year-end bonus to employees who are not legally entitled to it, and many informal workers expect the bonus because it has become such a recognized tradition. In the interest of improving employee-employer rapport, why not make the domestic help’s lives a little easier at the end of the year and pay them a little bonus?
Author’s Bio
** Solomon Freimuth is a blogger, entrepreneur, businessman and for the last few years a student of Mexican law at the Universidad Interamericana para el Desarrollo en Playa del Carmen, Quintana Roo and will obtain his law degree in 2012. Sr. Freimuth has also taken business classes from the renowned Instituto Tecnologico Autonomo de Mexico and several law seminars here in Quintana Roo. While running his building administration company in Playa del Carmen, Sr. Freimuth has been involved with a several labor disputes and has successfully managed to avoid litigation in all instances. More articles by Solomon Freimuth can be found at the Calderón & Asociados Blog law firm website, his personal blog about living, working and becoming a professional in Mexico: My Mexican Lawyer, and on twitter at @SolomonFreimuth.
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Yucalandia Editor’s Notes, Alternate Understandings, and Appendices:
The following bits of information are meant to supplement Sr. Freimuth’s very good interpretations of somewhat overlapping rules and requirements. This Article’s title offers advice on “What we we must pay.” You’ve probably already figured out that this was not entirely true, since various clauses of Mexico’s employment law are overlapping and inter-woven, and not necessarily spelled-out in concrete un-ambiguous terms. Having made these disclaimers, Yucalandia’s Editor believes that there are some commonly held opinions on how much vacation pay and year end bonuses (aguinaldos) are owed to full-time and part-time workers.
Note: This article is not meant to be an all inclusive discussion or analysis of Mexican law governing employee-employer requirements or work rules, but it is a partial primer that briefly touches on some of the key issues expat employers and employees may face. We do not represent ourselves as legal experts, and we strongly suggest that you contact a legal professional in employment law on any significant issues.
Vacation Pay and The Aguinaldo: Year End “Bonus?”
Vacation pay is owed after one year of employment. Full time employees are owed 6 continuous working days of vacation for that first year, plus additional days for additional years of employment, listed below in the Appendices. Ley Federal del Trabajo, Articulo 76.
Aguinaldos: Here’s a slightly different interpretation of the law than Sr. Freimuth, but it is not meant to contradict his fine insights: Even though only some domestic help are required by law to be registered with IMSS (Mexico’s equivalent to a combination of the “Social Security” system, Worker’s Comp., Health Care, and Pension systems), according one common interpretation of the LEY Federal del Trabajo, Articulo 87
~ all regularly used employees must be paid their legally due annual aguinaldo(Christmas bonus) in cash before 20 December annually ~
According to the Ley Federal del Trabajo, Articulo 87.
How to Calculate the Aguinaldo:
The base aguinaldo (“Christmas Payment”) is 15 days pay of a full-time employee’s regular daily wage. It really is NOT a “bonus” (not an optional payment term as used in US & Canada) but is instead a required payment for every worker you have employed regularly throughout the year, like house-cleaners and gardeners. Part-time employees who work 5 days or less per week receive an aguinaldo of the equivalent of 15 days pay X (times) the part-time percentage determined from the days the worked by part-time employees. This is also the same percentage used for determining potential vacation time off for part-time workers (e.g 5 day a week workers).
The aguinaldo and vacation pay for part-time employees, working 5 days or less per week, are computed on their actualdays worked for the year (days worked weekly x 52), even if they are paid on a weekly basis. These days worked are then calculated as a percentage of 365, then that percentage is applied to the number of paid vacation working days that a full-time employee with the same number of years worked would have earned, per Ley Federal del Trabajo, Articulo 78 and Articulos 76 & 78. Vacation pay is paid before the vacation time off, or at the end of the year (for part-time employees who already have days off each week).
For example, a part-time employee working 3 days per week would have worked 156 days = 156/365 => 42.74% of the year. Therefore, after the first year of employment they would only have legally earned 2.14 paid vacation days or 42.74% of a full time worker’s aguinaldo => 15 days pay X 42.74% => 6.41 days pay. Re Vacation days: The law is unclear about whether a part-time employee qualifies under Articulo 76 for the continuous days provision, but conservatively one could stick to this provision for part-time employee who reached the 6 day level.
Sidelights and Additional Insights to Common Pay Issues for Mexican Workers:
Many poorer workers who want to earn a little extra commonly ask to work through their vacations. Since this is extra work, the employer is expected to pay
- the vacation pay and
- pay for the time worked during the vacation, and
- the aguinaldo
This approach keeps workers happy, but it appears to be against the law, since vacation can not be paid in lieu of the paid time off from work. Ley Federal del Trabajo, Articulo 79.
But there’s another wrench in the works:
If the worker is due more than 6 working days of vacation, then additional days can be assigned one day at a time via written permisos if the days are paid at 125% of the normal daily wage and recorded as vacation days. Clear as mud?
Why the 25% bonus on top of the normal daily wage?
If a full time employee works extra for you beyond their expected Monday – Saturday labors, like on a Sunday, then you must pay a 25% premium and because you have required them to work on their “day of rest” AND you shal also pay them “double pay” for the service on their normal “day of rest”. Ley Federal del Trabajo, Articulos 71 & 73.
Hopefully, these pointers from Sr. Freimuth and Yucalandia help you understand a bit more of what your workers expect, and why, and following these insights will help keep everyone content – and out of court.
Documentation is The Key!
Finally, DOCUMENT, DOCUMENT, DOCUMENT. Record the employees actual work dates every week on the same slip that documents their receipt of payment. Have them sign a copy of every receipt for your records. Describe the precise purpose(s) for every payment on each receipt:
Example Content for Receipt for Weekly Payments: “Esta $____ es el Pago por ____ a _____ Dias (dates) de Trabajo. ______________ Firma de Empleado” Also consider describing their duties for that week on the receipt.
Example Content for Receipt for Aguinaldos: “Esta $____ es el Pago por 2011 anual aguinaldo. ___________ Firma de Empleado“.
Example Content for Receipt For Vacation Days: “Los Dias de tus Vacaciones seran ________ a ____________ (insert dates) Por el Año 2011. ____________ Firma de Empleado. “
Why do this? Part-Time Mexican house-cleaners and gardeners have been known to file claims after the fact with the “Labor Board”, claiming that they were full time workers, and that they are owed $100,000′s pesos in unpaid back wages and aguinaldos. Once the claim is filed, if you do NOT HAVE DDCUMENTATION, it can take months of Lawyer’s fees to refute such claims, and you may find yourself paying settlement payments of $10,000′s pesos to end some past worker’s totally unfounded claims.
Mexican Holidays:
Workers are automatically give the following official national holidays off work (dias obligatorios, e.g.. legal holidays), which are the days when all government offices, all banks and most businesses will be closed.
Jan 1 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ New Year’s Day
First Monday of February* ~ ~ ~ Constitution Day Memorial
Third Monday of March* ~ ~ ~ Benito Juárez’ Birthday Memorial
May 1 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ Labor Day
Sep 16 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ Independence Day
Third Monday of November* ~ ~ ~ Revolution Day Memorial
Dec 25 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ Christmas Day
*These 3 days are established by the Mexican Legislature, and may be changed by (annual?) legislative fiat…
Registering Your Employees with IMSS:
If an employee meets the criteria described above by Sr. Freimuth, then you should enroll them in IMSS. Further, if worker who you employ specifically asks you to enroll them in IMSS, many accountants (L.C.P.s) recommend that you enroll them in IMSS. If you are unsure, contact an abogado, Notario, or accountant who specializes in labor law to advise you, because the difficulties caused by claims filed after-the-fact by disgruntled workers can be painful.
Enrolling employees in IMSS costs the employer less than 20% of additional costs and includes the additional benefits and protections of Mexican “worker’s compensation insurance” and also sick and disability pay for the employee. IMSS benefits include free medical for the employee, and a contribution towards a pension upon retirement. Enrolling an employee the first time may require the services of a good accountant.
Remaining Odds and Ends: Severance Pay and ???
Severance pay is a particularly complex area, and is best handled by a pro: ask an abogado or Notario for specific advice, because of the web of interlocking and interwoven requirements and exceptions. e.g. Under some circumstance, firing an employee without cause may cost the employer three months salary plus 20 days pay per year of service. e.g. If you have a well-constructed employment contract or the employee has been with you less than 1 year, you may be able to terminate them without compensation. There are potential rules about how much advance written warning they should be given, etc, and some disgruntled employees with more than 2 years of service may have the right to sue for reinstatement. – with back pay… Auuuugh!!! These are some of the reasons that some Mexican employers use 6 month employment contracts, rather than “hiring” an employee.
Still, temporary disabilities, controlled substance abuse, contagious diseases, et al may be justification for termination without severance compensation. Messy? very…
When in doubt on any employment law question: Contact a pro!
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Key References and Citations:
ARTICULO 87. LOS QUE NO HAYAN CUMPLIDO EL AÑO DE SERVICIOS, INDEPENDIENTEMENTE DE QUE SE ENCUENTREN LABORANDO O NO EN LA FECHA DE LIQUIDACION DEL AGUINALDO, TENDRAN DERECHO A QUE SE LES PAGUE LA PARTE PROPORCIONAL DEL MISMO, CONFORME AL TIEMPO QUE HUBIEREN TRABAJADO, CUALQUIERA QUE FUERE ESTE. Ley Federal del Trabajo.
CAPITULO IV , VACACIONES:
ARTICULO 76. LOS TRABAJADORES QUE TENGAN MAS DE UN AÑO DE SERVICIOS DISFRUTARAN DE UN PERIODO ANUAL DE VACACIONES PAGADAS, QUE EN NINGUN CASO PODRA SER INFERIOR A SEIS DIAS LABORABLES, Y QUE AUMENTARA EN DOS DIAS LABORABLES, HASTA LLEGAR A DOCE, POR CADA AÑO SUBSECUENTE DE SERVICIOS. DESPUES DEL CUARTO AÑO, EL PERIODO DE VACACIONES AUMENTARA EN DOS DIAS POR CADA CINCO DE SERVICIOS. Ley Federal del Trabajo
ARTICULO 78. LOS TRABAJADORES DEBERAN DISFRUTAR EN FORMA CONTINUA SEIS DIAS DE VACACIONES, POR LO MENOS. Ley Federal del Trabajo.
Loosely translated and frequently interpreted: ARTICLE 76 and 78 say workers must enjoy at least six continuous vacation days per year. Workers with more than one year of service shall enjoy an annual period of paid leave that is no less than six working days, and will increase in two working days, up to twelve working days total, for each subsequent year. After the fourth year, the holiday period is extended by two days for every five of services.
This works out to:
1 year = 6 days
2 years = 8 days
3 years = 10 days
4 years = 12 days.
ARTICULO 79. LAS VACACIONES NO PODRAN COMPENSARSE CON UNA REMUNERACION. SI LA RELACION DE TRABAJO TERMINA ANTES DE QUE SE CUMPLA EL AÑO DE SERVICIOS, EL TRABAJADOR TENDRA DERECHO A UNA REMUNERACION PROPORCIONADA AL TIEMPO DE SERVICIOS PRESTADOS. Ley Federal del Trabajo.
ARTICULO 71. EN LOS REGLAMENTOS DE ESTA LEY SE PROCURARA QUE EL DIA DE DESCANSO SEMANAL SEA EL DOMINGO. LOS TRABAJADORES QUE PRESTEN SERVICIO EN DIA DOMINGO TENDRAN DERECHO A UNA PRIMA ADICIONAL DE UN VEINTICINCO POR CIENTO, POR LO MENOS, SOBRE EL SALARIO DE LOS DIAS ORDINARIOS DE TRABAJO. Ley Federal del Trabajo.
ARTICULO 73. LOS TRABAJADORES NO ESTAN OBLIGADOS A PRESTAR SERVICIOS EN SUS DIAS DE DESCANSO. SI SE QUEBRANTA ESTA DISPOSICION, EL PATRON PAGARA AL TRABAJADOR, INDEPENDIENTEMENTE DEL SALARIO QUE LE CORRESPONDA POR EL DESCANSO, UN SALARIO DOBLE POR EL SERVICIO PRESTADO. Ley Federal del Trabajo.
**Part Time Cleaning Ladies & IMSS:**
To pay or not to pay, that is the question.
Has your part time maid requested that she be put on IMSS? If so, then you definitely should pay it. At the very least, it is cheaper to pay the IMSS benefits than it is to fight a claim further down the road.
If not, then the situation becomes a bit more complex.
If the worker has a regular shift, and they are at the disposition of the employer during the employee’s shift – and you pay them for the time they worked for you (the shift), then, they are an employee and are owed IMSS. If your maid were a instead part time non-salaried worker who is paid by the job (like mowing the lawn) or by piece-work, then you are not obligated to pay. If you pay her for the regular shift, and she does varying things at your request during the shift, (not a “piece-work” or “by the job” situation), then you owe the IMSS as if she were a full time employee. Article 20 of the Ley Federal del Trabajo describes that employees are owed IMSS if they subject to your authority and your direction. http://www.fredlaw.com/articles/international/Mexico.pdf
Do you now see the distinction between mowing the lawn (the guy is doing a single specific job – for a single payment) and someone cleaning your house on a per-hour basis, following your directions? If you had them in your home only to clean the floors – as a single job – and they were not paid for a shift of work, but paid for that one job (whether it took them 20 minutes or 2 hours => slow or fast), then they are not owed IMSS. If instead they are under your direction, and you sometimes tell them: “I want you to do this…. or to do that…” then they clearly are your employee, and they are owed IMSS.
Over in Chapala, the IMSS delegation Administrator Arturo Galindo says that the Ley de Seguro Social described domestic workers rights to be enrolled in the national social security program. He said that Article 13-II of the Ley de Seguro Social lists trabajadores domesticos (domestic workers) as eligible for obligatory IMSS coverage.
Applying this law is straightforward for full time live-in maids, but things get more complex with part time maids. Since part time often maids have many employers, it complicated for the IMSS to enforce the law. Galindo described that no mechanism exists within the IMSS to coordinate a group of employers to insure a single person. “What I suggested [during a recent meeting in the Villanova neighbor's association in Chapala] was that the employers take it upon themselves to find out who employs the worker and get together to pay for the insurance,” said Galindo. http://guadalajarareporter.com/news-mainmenu-82/lake-chapala-mainmenu-84/20885-imss-urging-foreigners-to-inscribe-domestic-workers.html
Another consideration for you is if she is injured on the job. If you are not paying IMSS, then in the event of any injuries, things get messy quickly. Also, if you sever her employment (even for cause) in a less-than-friendly parting, she can easily file claims against you likely lose.
Is there any chance to contact her other employers, and that you all chip in (proportionately) to pay the annual IMSS fee?
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***If you got this far, you may deserve a bonus… We have an Excel spreadsheet Aguinaldo and Vacation pay calculator provided by a talented friend. Please contact us if you are interested in this calculator, though we make no representations or offers of accuracy or how it should be used. *grin*
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Please Continue to Make Comments and Replies to Help Keep This Information Current!
Disclaimer: This information is not meant as legal advice. It is for educational and informational purposes only. Government policies vary between States and offices, and Mexican Government officials have broad discretion in how they individually enforce policies, so, your personal experiences may vary. See a professional for advice on important issues.
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Feel free to copy while giving proper attribution: YucaLandia/Surviving Yucatan.
© Steven M. Fry
Read on, MacDuff.
Pingback: Labor Law for Household Employees in Mexico – What must we pay? | Surviving Yucatan
We are trying to find a definition of Part-Time workers vs. Full Time workers. We fired a lazy gardener who was suppose to work 6 hours a week. He wants severance pay. Is he entitled? If so, how much. Many thanks for helping us out! C.G.
cyniangs@hotmail.com
Cynthia,
We don’t know the definitive answer to this question, because this area of the law has a number of practical pitfalls. One informal guideline that friends have described for part time household workers is roughly 1 month of severance pay for every year of work. In his case, that would work out to 24 hrs of pay for every year he worked for you, paid as a courtesy? If you pay this, we advise emphasizing to him that the he was an informal part-time garden helper.
Upon termination of the employer-employee relationship, some lawyers advise having every part-time employee sign a document that acknowledges that they were a part-time employee, their beginning and ending dates of employment, and that their signature verifies that they have received any and all compensation owed to them. There are reports of part time Mexican employees filing false after-the-fact legal claims that they were actually full time employees, and hence owed substantial wages and severance pay. As a result, the homeowners wound up paying $1,000′s in legal fees and extra payments to settle the disputes.
For these reasons, it is a very good practice to contemporaneously document the part-time (informal or formal) worker’s time and the wages paid in writing every time, and get them to sign a receipt each time that documents the payment, date, time worked, and type of service.
Official severance pay rules: The Guide To Mexico for Business, 4th Edition, an American Chamber of Commerce of Mexico publication reports: Full time workers are owed 3 months severance plus 20 days pay per year of service, for workers who were terminated for cause. The Commission for Labor Cooperation describes the same terms for Full Time workers terminated for cause. If the termination is found to be unjustified, the penalties become even more onerous.
http://www.naalc.org/migrant/english/pdf/mgmexmes_en.pdf
Readers should note that Mexican Labor law provides many more protections for Mexican workers than are found in Canada or the USA. Mexican labor law experts routinely report that it is very very difficult to legally fire a full time Mexican employee for cause, and that full time Mexican workers fired for cause are often subsequently awarded severance pay, awarded their jobs back, and awarded full back pay for the time missed.
As with all of these things, we are not experts and only pass along the reports of others, and we advise contacting an attorney for official advice.
steve
“The Nail that sticks Up will be hammered down.“
I have found you article to be very informative but it did not answer my question.
We have had a domestic in our employ for the last 14 years. We are selling our home and although we expect the new owner to keep her on we want to pay her in recognition of her
years of service. Is there a legal requirement? We will pay her regardless but would not want
to make a mistake.
Thank you for any help you may offer,
SK
Hey Sandra,
What is your question?
I scanned all of the recent comments on Yucalandia, and couldn’t find a question.
Solomon Freimuth’s law firm’s general advice seems sound (see article above):
“…give benefits to all employees when in doubt; and settle labor disputes that arise where employees think that they are entitled to a bonus or severance pay, as opposed to letting the case go to court, no matter how justified the employer may feel in his legal rights.
…the author wants to reiterate that there is no clear, general distinction that can easily summarize whether or not a worker deserves labor benefits.”
Continuing:
… domestic employees are entitled to all of the other employee benefits given by the law, even IMSS (medical insurance and pension fund) and INFONAVIT (housing fund). Many employers are accustomed to not giving their domestic help these benefits, but in reality the law requires them for any employee.
I think these items describe your requirements in your situation.
Do other expat employers or locals pay these benefits? – frequently not.
Will your employee demand their benefits? There’s no way for us to know.
Will your employee turn you into the authorities or sue you? There’s no way for us to know.
So, from our perspective, your situation seems to boil down to several points:
Do you prefer taking more general internet advice from legal experts like Calderon and Assc / Solomon Freimuth – or do you prefer hiring your own attorney to advise you on your specific situation instead?
Do you appreciate your employees service? (No intentions to fire her-.)
Do you generally follow laws – do you generally try to do the “right thing” ?
Do you generally choose lower-risk conservative options, or do you generally choose higher-risk options?
Give us a shout when you’re done with the process to tell the rest of us how it worked out.
steve
Question…. I have a part time housekeeper… less than 15 hours a week. Do I need to put her on IMSS….? She has other jobs also… Just want to make sure I am doing what is right. I had always thought that Part time domestics did not get IMSS… but I will do what is needed… Thanks
Victoria,
Has she requested that she be put on IMSS? If so, then you should pay it. At the very least, it is cheaper to pay the IMSS benefits than it is to fight a claim further down the road.
If not, then the situation becomes a bit more complex.
If the worker has a regular shift, and they are at the disposition of the employer during the employee’s shift – and you pay them for the shift, then, they are an employee and are technically owed IMSS. If your maid were a part time non-salaried worker, paid by the job (like mowing the lawn) or by piece-work, then you are not obligated to pay. If you pay her for the regular shift, and she does varying things at your request during the shift, (not a “piece-work” or “by the job” situation), then you owe the IMSS as if she were a full time employee. Article 20 of the Ley Federal del Trabajo describes that employees are owed IMSS if they subject to your authority and your direction. http://www.fredlaw.com/articles/international/Mexico.pdf
Do you now see the distinction between mowing the lawn (the guy is doing a single specific job – for a single payment) and someone cleaning your house on a per-hour basis, following your directions? If you had them in your home only to clean the floors – as a single job – and they were not paid for a shift of work, but paid for that one job (whether it took them 20 minutes or 2 hours => slow or fast), then they are not owed IMSS. If instead they are under your direction, and you tell them: “I want you to do this…. or to do that…” then they clearly are your employee, and they are owed IMSS.
Over in Chapala, the IMSS delegation Administrator Arturo Galindo says that the Ley de Seguro Social described domestic workers rights to be enrolled in the national social security program. He said that Article 13-II of the Ley de Seguro Social lists trabajadores domesticos (domestic workers) as eligible for IMSS obligatory coverage.
Applying this law is straightforward for full time live-in maids, but things get more complex with part time maids. Since part time often maids have many employers, it complicated for the IMSS to enforce the law. Galindo described that no mechanism exists within the IMSS to coordinate a group of employers to insure a single person. “What I suggested [during a recent meeting in the Villanova neighbor's association in Chapala] was that the employers take it upon themselves to find out who employs the worker and get together to pay for the insurance,” said Galindo. http://guadalajarareporter.com/news-mainmenu-82/lake-chapala-mainmenu-84/20885-imss-urging-foreigners-to-inscribe-domestic-workers.html
Another consideration for you is if she is injured on the job. If you are not paying IMSS, then in the event of any injuries, things get messy quickly. Also, if you sever her employment (even for cause) in a less-than-friendly parting, she can easily file claims against you likely lose.
Is there any chance to contact her other employers, and that you all chip in (proportionately) to pay the annual IMSS fee?
steve
Thanks Steve, I will talk to her today. She has never requested IMSS. Does she sign up for it and give me the bill? Or do I have to get an accountant?
As for her other employers I doubt they would help. One just let her go because she is single and ‘with child’. I will do anything for this young girl so will take care of this right away. I was also told if she was on Sequro Popular that she could not also be on IMSS.? I will ask her what she wants and try and get this settled quickly. Thank you .. Victoria
victoria,
The employer pays IMSS. I have not done this, but I understand it is a single annual payment. I don’t know about Seguro Popular, but IMSS covers things (like retirement) that go beyond medical care.
steve
Social Security as noted elsewhere includes IMSS, pension, INFONAVIT. It is paid monthly or bi-monthly. It takes time to set up and I believe requires registering with Hacienda. But when required by law, please do it. So many Mexicans are abused on this matter by non-payment or under reporting to save a few pesos. It not only affects healthcare coverage it affects their pension when seniors and the opportunity to buy a home with huge government subsidies. It can totally change their life. PLEASE, everyone, follow the law.
amen…
I have recently started to have my house cleaned on a casual basis by a Mexican neighbor. By casual, I mean that I may ask her to come once a week for 4 hours, or I may not need her to come for a couple of weeks. The most I would ever have her work is 4 hours once a week..This arrangement is fine with her, as she has young kids and other activities and wants the flexibility to cancel out, or change days, if she is needed at home. Would I be required to pay these bonuses, vacation pay, severance, etc? If so, according to what formula? I am sure she is not claiming her earnings to the govt. as income- it seems to me to be protected by labor laws, they would have to be legally, i.e. claiming their income, to the Mexican govt?
Hi Sarah,
Yes, as a regular employee who is clearly not an independent contractor (like a plumber or electrician), and as an employee whom you direct and tell what you want done, you do owe her vacation and the year-end aguinaldo and maybe the severance(?). Really, it is up to you to register the relationship with the government, since you are the employer, whether she reports the income or not.
The rules on employee rights are much stronger here than in the United States, and the burdens of proof are higher and fall on the employer. This is one of those TIM moments, where different countries have different rules than the USA. e.g. In right-to-work states in the United States, employers can fire employees at will, for no just reason, and pay them no severance, – even when the employee is fired simply because some manager does not like them.
Having said all that, many employers ignore the laws in Mexico – and it is your choice whether you consider yourself a law-abiding person, or if you are a person who follows the law basically when the threat of punishment is high. We have seen cases of occasional household workers, (cleaners and mozos), filing labor claims later, claiming that they were actually full time employees for years, and that they were owed lots of back pay and benefits. The cases like this that we know of took $25,000 – $120,000 pesos to finally settle – along with a lot of stress and hassling with lawyers.
Based on your earlier post, observing how you really expect people and systems (Aduana and Banjercito) to work as promised, and to work in just and fair ways, I assume that you similarly want to pay all that is owed, including registering and paying at IMSS. (by asking the questions, you show a desire to do what is right) If this woman has other employers, you might want to contact them, and arrange that you split the costs of paying IMSS what is owed for her to have the legal medical and pension coverage.
steve
Great comments Steve. Here in San Miguel many expats screw the workers and do not pay SS or under report it. This includes Via Organica who has not paid their bill all year.
Do you know anything about contracting workers for a specific time frame ?I heard its the better way to go to avoid any disputes in the future,
Valerie,
Are you directing them? or
Are they being hired as an independent contractor (like a plumber) who will work independently ?
If you are directing them? Giving them specific work hours with times that they must arrive to start working for you? If so, they are your employee under Mexican law.
If you do not direct them, but pay them for doing a specific project that they can do in the way that they want and in their timeframe, then they qualify as a contractor.
steve
Thank you for your response .. yes I do actually direct them but also I found a contrato der trabajo that may just fit what I need I am studying at this moment but i hope you dont mind if I have any more questions if I can be touch with you again
thank you
Valerie
Look forward from hearing from you again.
steve
I have had a housekeeper for 7 years. She came only weekly whether we were here or not. Knowing when we were not at the house she did very little or did not show up. I asked her to sign a contract. When I did that she became angry. Then quit. I never paid any IMSS for her. She quit so does she have a right to come back on me for past IMSS, vacation pay?
Travis,
Did you direct her cleaning activities? or did she act more as an independent contractor – domestic worker? If she were a domestic independent contractor, then you do not owe IMSS. Since she quit, by our crude understandings, she surrendered any rights to severance or back vacation pay. Still, we know of one instance where the domestic employee quit, but told a very different story to the local labor authorities. This person claimed they worked full-time, yada, yada, yada, … and because the gringo employer did not keep scrupulous thorough records, he wound up paying roughly $60,000 pesos to her, including legal fees to make the issues go away. If you are worried, contact a good labor attorney.
steve
Given that significant rights attach to the employer-employee relationship in favor of the employee, it becomes important how casual labor is utilized, and compensated, as well as how the relationship is documented, just as this article and the comments which follow it point out.
Soloman advocates giving extra money at year’s end, even if the relationship is not strictly that of employer-employee. If you agree, and you also think it a good idea to document that gift of extra money, documenting it becomes potentially problematic; for example, you could not use the receipts presented in this thread, as they would constitute conclusive evidence that the relationship was that of employer-employee- by designating the worker as an “empleador.”
Documenting the gift with a photograph, in front of the Christmas Tree, would make more sense to me- making it a close up so that it can easily be seen how much the gift was.
I should explain that I don’t consider that I have an employer-employee relationship with my maid. She comes to clean our condo once a week on average, when we’re in town, but she negotiates the day and time to find one that fits her schedule, and ours. She does not have a key and never has, so we must arrange to be home for her visits. We pay her a flat rate for cleaning the condo irrespective of how many hours she works, which varies from one to five, depending on how long she take with the job. She sets the daily rate we must pay.
It seems to me there is a suggestion in this thread that even under these circumstances it would be a good idea to document her visits, and pay, by having her sign written acknowledgements of these activities, and conditions under which they are occurring; or, perhaps as an alternative, by compiling contemporaneous written notes of her visits without asking that she sign it, thereby compiling evidence that she is not, in fact, an employee.
Like so many things in the law, people have to decide whether to bother with it, or not: then, having decided to bother with it, deciding how best to go about it.
Contemporaneous documentation of the payments and hours worked, could protect you from future legal complications if there is some future misunderstanding or labor board claims. A simple receipt book can do the job, where you ask the domestic worker to initial that the payment was received, and then you each have and keep copy of a receipt.
steve
I find your information very helpful.
I have a lady who comes to do cleanings once a week for the past two and a half years. My question, how do I pay her the year-end bonus ( like I pay her now 300 peso/time, so how much should I pay her as bonus? 300 peso?) Also, we will leave Mexico, how much should I pay for the severance to her? Thank you.
Yvonne
Yvonne,
I just sent you a copy of an excel spreadsheet for calculating the aguinaldo,
steve
May I have a copy of the excel spreadsheet for calculating the aguinaldo,
done
We have a housekeeper and manager who has requested a pension for her “old age” but does not want seguro de salud. She has worked for us for many years but only on a part time basis. We want to set up a bank savihgs account in her name and put in a lump sum to cover past years and then provide a deposit each year for her retirement. She doesn’t seem totally OK with that idea, but it’s our understanding that IMSS does seguro de salud and not pension. Can you explain? Also, are we totally legal with this? Should we also register her with IMSS? Also, do you have a format for an employment contract that we can use with our housekeeper that protects her and us? thank you for your help.
Hi Harriet,
Good Questions.
IMSS has both health insurance coverages and pension programs. The original article was written by a very good attorney, so, we defer to his expertise on employment issues, particularly since there is a NEW labor law, and we have not reviewed the new law.
Please contact Abogado Lic. Solomon Freimuth at “My Mexican Lawyer” and help support his very good efforts.
steve
Hi Steve may I also get a copy of the spreadsheet for calculating the aquinado.
done
Hi, can I also get a copy of this spreadsheet for calculating the aguinaldo? Do you have some spreadsheet for calculating the holiday bonus?
Thanks by advance!
Hi Laure,
Sent. The aguinaldo is what gringos call the “holiday bonus”.
steve