Nov. 4, 2015 Updates:
Re IMSS … The very talented & highly-reliable Chapala lawyer, Lic. Spencer McMullen notes that: “Domestic workers are an exemption in the law, for them IMSS is not mandatory.” … yet … “The law doesn’t distinguish between part time and full time employees.”
But … that exemption does not exclude/exempt us from paying Aguinaldos, Severance Pay, Vacation pay, etc.
Other key calculations:
Severance pay:
1. Severance
If the employee worked more than 28 days, it’s at least an automatic 90 days of salary. See the “Finiquito” section below for specifics.
2. Prima de antiguedad
12 days pay per each year worked.
3. Vacation pay
Vacation pay for current year worked. … Remember that this is the official Mexican Labor Law’s “Daily Rate” ** (see below) … and remember they should also receive this pay for all past years worked.
1st year – 6 days salary
2 years – 8 days
3 years – 10 days
4 years – 12 days
5 to 9 years – 14 days
10 to 14 years – 16 days
15 to 19 years – 18 days
20 to 24 years – 20 days
25 to 29 years – 22 days
30 to 34 years – 24 days
35 to 39 years – 26 days
4. Aguinaldo
The annual aguinaldo is the equivalent of 15 days of “Daily Rate” pay.
It is NOT a Christmas bonus. It is a mandatory wage payment that is due by the 20’th of December. The aguinaldo is equivalent to at least “15 days wages”, and may be pro-rated if the employee has been working for you for less than a full year.
** If a worker is hired to work by the week, the “Daily Rate” equals their weekly pay … divided by 7. If he / she is hired by the month, the “Daily Rate” is the monthly amount divided by 30.
**Daily Rate Simplest Example… If you have an employee who works two days a week ~ for the entire year ~ for $350 pesos each day = $700 pesos a week:
$700 pesos / 7 days = $100 pesos per day at their “Daily Rate”
$100 pesos “Daily Rate” x 15 days of Aguinaldo pay = $1500 pesos
Note that if they work only a part year:
An alternate way of calculating the aguinaldo is determined by multiplying the total days they worked in current year by 15, then divide by 365 days, and then multiply by the daily rate:
For a part-year worker coming in for 2 days a month for 9 months =>
18 days … x … 15 days of Aguinaldo = 270
270 / 365 = 0.7392 … 0.74 x $Daily Rate ($100 pesos?) = $ _____
Note. The “Daily Rate” is based on a full week. For example, if your maid only works two days per week, and gets paid $700 pesos per week ($350 pesos per day of work). You take the weeks salary of $700 divided by 7 = $100 pesos is the Daily Rate.
*** Finiquito:
Calculators for final severance benefits being paid to domestic and household help (muchachas y mozos):
http://www.nominax.com/CalculadoraFiniquitoLiquidaci%C3%B3n/tabid/132/Default.aspx
**If the employee quits, then the amount owed to them is small.
Under CALCULAR – select: ” SOLO FINIQUITO “.
LIQUIDACION + 20 DIAS … is for an outright termination without documented cause.
LIQUIDACION is a mutually agreed upon termination.
Salario Diario: Take the amount paid in a week and divide by 7 for daily rate.
For example, a person who works 2 days a week and makes $350 p / day. Take $700 pesos divided by 7 => a daily rate of $100 pesos.
Salario Diario Integrado: This is the same as the daily rate, unless you are paying extra for healthcare etc.
Área geográfica donde trabajó: generally “B”,
… unless you are in Zone “A” which includes Mexico City, Monterrey, Acapulco, Guadalajara, Puebla, etc and all of of Baja California and Baja California Sur.
As always: Prepare a termination letter + a copy. Be sure it is signed and witnessed.
Termination Pay:
It is best to contact a good labor lawyer to find out the latest rules and the local twists of your state, but for general information, consider these rules of thumb:
1. When an employee is terminated, he is entitled to termination pay; unless:
1a. The employment was for a specified period of time, such as the period of building a house, or for house sitting for a winter while the owner is out of town. It is best to have the time period stipuled in writing.
1b. Termination for “just cause”. This can be a very complicated issue. It is best to get the help of a labor lawyer, as the employee can wreak havoc by appealing to the labor review board. “Just cause” is spelled out in detail in the law.
Termination pay shall include 3-months of salary plus 20 days for each year worked plus prorated vacation and Christmas pay.
20 days of salary means 20 times the daily rate (which is 1/7 of the weekly rate).
Example: A maid worked 2 days per week for $50 pesos per day for 4 years. That is $100 per week. There are 13 weeks in 3 months. Her daily rate is $100/7 = $14.29.
Her termination pay would be ($13 x 100) + (20 x $14.29 x 4) = $2443.20 … plus any Christmas and vacation pay that may be due.
If the termination payment cannot be made at the time of termination, regular salary shall continue until the termination is paid in full.
If the employee quits voluntarily, termination pay is sometimes considered to be not required.*** (See the *** section above for calculating the finiquito .)
For this reason, a common tactic to avoid termination pay is to induce the employee to quit. … Be careful with this because Mexican Labor law describes what an employer cannot do to harass a worker and his family.
According to multiple lawyers, the severance pay package is negotiable … but it must be at the written agreement of both parties, and generally requires a good relationship with the employee, plus signed receipts and the signed & witnessed release.
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Original Article:
Yucalandia is pleased to welcome a guest author as a new contributor, Lic. Solomon Freimuth, of My Mexican Lawyer, who, along with his partners at Calderón & Asociados, has fine expertise in Mexican Law, focusing on key issues affecting expats. Lic. 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 at My Mexican Lawyer and on the socio’s website: Calderón & Asociados. 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!
**** LATER EDIT: Please note that Mexican labor law changed significantly in 2012, so this original piece was published under different legal principles. Please see a good Mexican labor lawyer with any current questions, Editor.
For those who enjoy reading the full law in Spanish, see: LEY FEDERAL DEL TRABAJO: 2013 ****
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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
** Lic. Solomon Freimuth is an entrepreneur, businessman, and lawyer who studied 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.
Surviving Yucatan 
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.
Click to access 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
Valerie, could you PLEASE send me a copy of your contract? I had to fire a maid who stole from us. We went the legal route and ended up bleeeeeeding, I’m not kidding. The attorney told us a contract would have eliminated some of that. marty_b_cpa@yahoo.com
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
May I also have a copy of the Aguinaldo worksheet, please? I’d like to see whether my previous years’ calculations come anywhere close to being correct!
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
May I get a copy of the spreadsheet for calculating the aguinaldo? Also if you have one for calculating the vacation pay I would appreciate that also. Our employee is part-time and doesn’t work every week of the year.
Thank you
Sent.
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
I had a gardener who came once a week and work 6 hours for 21/2 years with pay of 300 pesos a week plus the Aguinaldo in December. He wanted another day of work. I told him I barley had enough work for him once a week and he quit. Now he is asking for all the back pay which comes to over 38,000.00 pesos. Is there anything you can you do to protect yourself from this.
Yes, there are well-documented things that do work to stop these claims.
1. Keep contemporaneous dated records, where your INDEPENDENT CONTRACTOR signs to show he/she has received their payment in full, for every payment you give them.
2. Have a work agreement that describes that the worker does his tasks INDEPENDENTLY without you directing or supervising him/her – to show that they are NOT employees – but like carpenters and plumbers – they are independent contractors doing a specific task.
3. Know your State’s labor rules. e.g. Some states require that workers must file claims within 30 days (Jalisco)… Has your worker met all the legal requirements to file a valid claim, on time, with the correct authority?
This is just a starting list of items that past attorneys have advised.
Those things being said: Documentation and witness statements can make all the difference between having them leave quietly versus you having to pay some $$10,000’s pesos settlement to make the problem go away.
Talk with a good labor atty.
steve
Hi Steve, may I have a copy of your. Spreadsheet please.
Thanks
done.
May i please have copy of your spread sheet–I’m in a mess—Thanking you in advance
done
may i please have a copy of the excel spreadsheet? thanks!
done
Hi Steve, My maid has quit after 10years (you know the story–the mother of another employee and we gave her work!!!) Now she wants 30,000 for quitting, She never asked for IMSS and I never offered. Is there any formula for figuring her compensation?? She worked for 5 years 3 days a week for 200/day and 5 years at 2 days a week for 200/ day—I haave WAY overpaid alginauldo each year ( but of course have no record) .Would you think I owe her 30,000–because I don’t. Thanking you again in advanve
Hi,
This could be a tough one. … Did you direct her in her activities? Did you treat her like an employee or more like an independent contractor?
I would contact a labor lawyer, since there may be requirements that she has not met (to qualify for severance pay). e.g. If she wants to force the issue, there can be deadlines by which she must file a claim with the govt. Please come back and tell us how it worked out.
steve
Dear Steve, In reference to the above my maid of 10years has quit and wants me to pay her 30,000–she had worked 5 yrs for 3 days a week at 200/per day and for 5 yrs for 2 days a week at the same pay–is there a formula for figuring out how much i owe her?? I never paid and she never asked for IMSS and has not has it in her previous employments. I have paid alginaldos (WAY over what she should have gotten but never vacation pay because she always took her days during the holidays (she took 2 to 3 weeks), A labor law attorney said 5,000 is fair–what do you think?? Again, Thanks
May I please have a copy of your spread sheet. I do appreciate it.
done, steve
This question was asked in a post above, but not really answered. I plan to pay my part-time (very part-time, one day every 2 weeks for 4 hours) cleaning woman aguinaldo and vacation pay, However, I am quite sure she does not report her earnings to the govt, nor pay taxes on them. As a small business owner here in Mexico, who reports my income and pays taxes to Hacienda, and who has a hard time making ends meet, I feel it is quite unfair that I be required to pay aguinaldo and vacation pay to someone who pays no taxes on their earnings. Does a worker who does not register their earnings with the Mex. govt. really have the right to complain to labor relations if they don’t receive the year-end bonuses? Would they not then open themselves up to being forced to claim and pay taxes on their earnings?
Hi Sarah,
I don’t know how the law works with poor workers who do not report their cash earnings. I know of one case where the partime household cleaner was fired, without following proper protocols, and the cleaner claimed that they were a full time employee, owed severance, and months of back pay. The gringo homeowner ultimately had to pay the cleaner and the lawyers $40,000 pesos to resolve the problems and stay out of court, because the gringos did not keep records or receipts for the past work and past payments.
If you follow the formula for calculating aguinaldos, ~ from above ~ https://yucalandia.com/answers-to-common-questions/labor-law-for-household-employees-in-mexico-what-must-we-pay/#How%20to%20Calculate%20the%20Aguinaldo
” 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 (from 365 days) determined from the days the worked by part-time employees. ”
Some people claim that if you pay the worker the equivalent of 2 weeks pay, then you are OK, but that is not what the tax accountant advised.
steve
Thanks Steve, I agree, people should use the formula to pay exactly what is required by law, Keeps things straightforward. If people want to add a little more because they appreciate the quality of work they are getting, or feel the family needs it, that is optional, but workers should sign a paper which states the correct amount of aguinaldo and vacation pay they received.
2 weeks pay for my cleaning woman would have been 200 pesos (she gets 200 pesos for 4 hours work once every 2 weeks); using the correct formulas, it comes to just over 164 pesos alguinaldo, and about 82 pesos vacation pay.
May I have gtgis spreadsheet please?
Thank You
done
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This is scary. I’ve lived all over the world and had maids I. Every country I lived in. I’ve never fired anyone and no one has ever quit. Usually they cry when we leave and beg us to take them with us. Now I wish I had. I hired a live in maid 1 month after moving to Mexico City. She worked for me for 9 months. She worked Monday thru Saturday and left at 10:am on Saturdays and returned at 10:am on Monday. She stole 10k pesos on Saturday before she left. Then she returned on Monday morning and worked for 1 hour and told me she was quitting. She gave me 1 hour notice. Then she asked for severance pay. I told her no and asked for her keys. This was also 1 week before we were leaving for vacation,
Now, she has filled a claim with the labor board and hired lawyers. She claimed I fired her 6:pm Monday night. She claims I personally fired her that evening and was rude and disrespectful to her……I don’t speak a word of Spanish. Also, my driver and gardener were both here when she quit. She claims that she worked her Wednesday – Monday, having only Tuesday off and wants me to pay her for working on Sundays…..we live in a hated community with guards that note all the comings and goings of staff. She never set foot here on a Sunday. She also claimed that I made her do the gardening…..I have a Gardner….she also claims that she has a video on her phone (the phone I bought for her when hers broke) of me screaming obscenities at her. Two points here, 1. I don’t speak Spanish and she doesn’t speak English, so if I was screaming at her, how would she know that it was ugly. 2. I never raised my voice to her because I know she can’t understand me and it’s pointless. I’m trying not to worry about this video claim, because I never yelled at her, but maybe it’s just a voice and you can’t see a person and she is claiming it’s me when it’s not. I’m worried because I did document all of her time and pay. I have her sign a sheet each with with the amount I am paying her….we both sign it together and it’s dated. I also had her sign when I gave her money for doctor, medicine, a phone. She never asked for insurance, but she did ask for SS. So we looked into it and even though we were not obligated to provide it to her, we gave her 4,000. Pesos and had her sign for that too stating that it was for SS…..
My point is, we did document everything, we can prove that everything she claims is a lie. Even the lie that she claims we forced her to sign blank documents….we can prove when she worked here and when she didn’t, we can prove that she quit without notice and was not fired. And by her own admission she worked for us for less than a year. And we have very good lawyers that are telling us we should just settle with her because denying her will cause us to go to court and spend lots of money and it will be cheaper to just give her 5k pesos. I’m not cool with that. Basically we are being shook down by The Mexican government. I understand she is a poor woman. She had a good job, we paid and treated her very well. She took and took, literally and then walked out. I have a new maid and I am worried about her suing us, no matter what you document, what you have proof of, the bottom line is either you will have to give these kinds of dishonest people a small amount of money or you will have to give an attorney a large amount of money. It feels to me like a scam of mass proportions. With all the proof I have, my attorney should be able to write a letter and prove that she has lied to the labor board and her claims are false and the case against us should be dropped. But no, that’s not how it works here,…..also, I forgot to mention that she is also suing my husbands Canadian company too??? Really? What a messed up system, I’m all about helping the poor, but I’m not cool with promoting and helping liars to take advantage of someone else just because you have money and they don’t,
Hi Kimberly,
Did she file her complaints following official rules (on time, with the correct officials)? We know of one worker’s false-claims efforts that fell apart because they did not follow the rules.
The bogus claims she’s making, do occasionally happen. I know of 3 of these situations among 100’s of gringos over the past 8 years. In the worst case: One acquaintance did not have documentation, and he battled the false claims for 4 months (racking up big lawyer’s bills), and they finally settled for about $40,000 pesos.
I’d love to give some sage advice, but I’m not familiar on what it would cost to pay lawyers to fight her claims through the system – so, your lawyer may be correct – that it may be cheaper to just pay her to sign full waiver(s) and go away.
The acquaintance who fought his mozo’s y muchacha’s (a married couple) false claims really stressed over the mess – taking a mental and physical and psychological toll on him and his wife – so, I really have no advice, because it’s up to you – what’s important to you – and what lets you sleep at night.
One point to possibly take away from this is to follow the advice given above:
~ Make it completely clear to your cleaner that they are INDEPENDENT CONTRACTORS – like a painter or carpenter or plumber.
~ Make it completely clear to them that they ARE NOT YOUR EMPLOYEE.
~ Get them to sign a document verifying that they understand that you are not their employer – that there is NO employer-employee relationship — or find a new cleaning person who will agree.
As described above, the independent contractor role is different from an employee – e.g. You are not allowed to direct them in their duties…. just as you would not tell a plumber how to do his job. You can tell them what you want them to do that day, but they then execute the job, independent of you directly supervising them.
Be firm. Set clear boundaries. Document your agreements, their working, and payments to them.
steve
Great article. Can I please get a copy of your spreadsheet to calculate severance?
Hi Wendy,
I sent you a copy of the Aguinaldo spreadsheet. (That’s all we have)
steve
This is great info! Could I get the spreadsheet as well? Thanks!
sent
Hello, interesting article. My question is concerning a caregiver. A caregiver comes in my home 2 days a week, sometimes 3 to care for my mother. And they “normally” are the same 2 days each week. She is paid a set amount for each day…same hours each day. I have certain things that I expect her to do when she is here…ie..give my mother a shower..a blood test performed once a week…my mothers laundry. Besides dressing & feeding her. I am not present when she is here as she works when I leave the home to work. If I take a vacation from work or holiday, I do not have her come to care for my mother. She is told ahead of time that her services would not be needed that week etc. How would she be classified? Wouldn’t she fall under part-time? Would the vacation/year end bonus apply? I am getting really nervous after reading these articles (!!) that I am not in compliance with the law! Your thoughts? And can I have a copy of the spreadsheet? Thanks.
Hi Cheryl,
Your questions are very well described, but we don’t know the specifics of the law that apply to your situation.
I would think that she is owed the Aguinaldo payment (as it is a required part of wages – and really is not a bonus).
I’m glad to send you a copy of the spreadsheet, but I think you need to contact a good attorney who knows labor law for your area to advise you.
steve
I am a teacher.Now I badly need ajob in Mexico or canada.That is why I interestedthe job.
Hi, great information! May I have the spreadsheet? Thanks!!
done
Steve
Please forward your aguinaldo worksheet, Many thanx.
done
Hello Steve,
I have read that employees in Mexico are entitled to a half-hour rest period per 8 hour shift. Does that include domestic workers (specifically our handyman / gardner)? if so, is the half hour paid or unpaid?
thanks
Hi,
In Mexico, the general principle is that part time workers have the same rights as full time workers.
“Rest breaks
Employees are entitled to at least one fully paid day of rest every six days. If employees agree to work on their day off, they receive triple their wages for that day. In addition, employees are entitled to a rest break of at least 30 minutes during a working day. If the rest break given to an employee is only 30 minutes long or the employee is not entitled to leave the work facilities to rest, then that rest break must be determined as time actually worked and remunerated.”
http://us.practicallaw.com/3-502-9997?source=relatedcontent
steve
Hi,
My nannies have been with me almost 3 years and work between 6 and 7 hours 5 days a week. How much aguinaldo should I pay them? I understand 15 days is the minimum but what is the typical thing to do? One nanny is wonderful and I wish the other one would quit but I probably need to pay them both the same as they are sisters.
Thanks
Hi Elizabeth,
Good questions. The aguinaldo must equal 15 days of salary. To calculate the Aguinaldo for a part-time employee, divide the total number of days worked during the past year by 365, then multiply that figure (total days worked per year fraction) x the 15 day Aguinaldo x the daily salary to determine the amount of the aguinaldo.
Following Mexican legal accounting standards, Mexican tax accountants describe the 1 day a week worker calculation as:
(52 days/365 days) x 15 day Aguinaldo x $Pesos per day = Annual Aguinaldo payment … due by Dec. 20.
If you have an employee who works 5 days a week for $50 pesos for a day – they worked 52 weeks x 5 days a week = 260 days. That would seem to make the calculation work this way:
(260/365) x 15d Aguinaldo x $50 pesos = $534.25 pesos of Aguinaldo
That does not include any (2 weeks?) of vacation pay owed,
steve
Thank you Steve. I think I left out some words. The nannies work 5 days a week, approximately 6-7 hours per day (so 30 – 35 hours per week) and I pay them 50 pesos per hours, not 50 pesos per day + 200 pesos a week for food for those 5 days. I assume the calculation is the same as you indicated above (adjusting for the amount paid per day) but wanted to clarify with you.
I understand the law says 15 days but I hear some pay 1 month. Can you tell me what the norm might be for an employee that has worked for me for about 3 years? I will certainly plan to meet the legal requirements but would like to also meet the expectations of this area to keep my nannies happy without overpaying. We certainly have learned we have been too generous and too flexible in some areas thus expectations of our staff are high. We just want to do what is “right” not what is over the top.
Many thanks for your advice.
Elizabeth: I am also generous, I see no fault in that.
When I pay fees/wages I pay with a smile and say thanks.
When I do Pay Extra above agreed fee or wages I give it separately… and make sure it is clear it is a little tip for the service I enjoy… “este es poquito propina para ti, me gusta tu ayuda mucho”
Does anyone have a independent contract for domestic workers?
Did you ever receive a copy of an independent contract for domestic workers? I just got ripped off to the tune of 22,500 pesos for firing an employee who stole from me… Marty_b_cpa@yahoo.com
I do . I do not have it in writing but she comes when I need her. I’m not there . She has keys. She works usually on a Monday and comes usually in the afternoon. sometimes at 11 sometimes at 1 p.m. but she cleans and then locks up and leaves. I leave the 250 pesos there for her and she signs that she got it and the date and amount. I do not have her come after April . One year I did have her come all May. She is there about 2-3 hours. 4 at the very Most. I give her 500 pesos before Dec. 20 . She signs for everything. She works for about 5 other people. I don’t tell her what to do. She just does it on her own. Maybe 2 times a year , I will remind her to do the base boards and the front iron gate. That’s it. She works for others in the building. She usually works Nov or Dec until April . I never see her. I just leave the money. She signs. I would think she is contract labor . Would you send me a spread sheet please. Thank you. You are marvelous !
Hi Pat
Can i please have a copy of The contract and spreadsheet. I just moved to Mexico and need to set up a contract for my workers. Thanks
Selena
Hi Selena,
I have sent you a copy of the spreadsheet.
We do not have any employment contract verbage to share, because labor requirements do vary from state to state and any agreement needs to be custom fit to your situation and the worker’s situation. It’s best to see a labor-lawyer in your area to get an agreement that fits your local customs/agreements.
steve
could you please send me a copy of the severance spreadsheet? gracias!
Hi Dave,
I just now sent you a copy of the aguinaldo/vacation/etc spreadsheet.
steve
Hi Dave,
I just now sent you a copy of the aguinaldo/vacation/etc spreadsheet.
steve
Hi, just a question, so uf our maid who works one day a week for 4hours and gets 200 pesos requires IMMS and emplyee benefits, then should she not be registered, claiming taxes, and providing me with a factura?
Hi RV,
I think you have the cart in front of the horse:
It is the employer who registers the employee, and it is the employer who pays the IMSS & taxes. Employees do not provide facturas to the employer for receiving their wages & benefits.
Makes sense?
steve
Ok, so if she is an employee I have all the costs, if she is a contractor, she has all the costs and I get to write her off if I have rentals. Also, if one employer pays her IMMS, and she works somewhere else, she will not be covered. Because people are talking a out sharing the expense, but from my understanding from dealings with IMMS during my house building, it will only cover the employees at my place of employment. From what I am hearing here, it is about 8,000 pesos a year for an employee for IMMS. Can anyone confirm that. It seems too high for 6 months of labour at 800 pesos a season. I would love to do the right thing within reason. I would be happy to pay for her IMMS at 3000 pesos a year. Or even split that cost with all her other employers. Thoughts!
May I please have a copy of the spreadsheet. Thanks for all this valuable information!
Mary Ann
sent
Greetings. Would you mind sending me a copy of the spreadsheet as well?
hi can someone help me here – i have a friend in mexico who is working for a private fashion company, they said they would pay her after a month, but after 1 month they are saying 2 months. She really needs the money, is there anything she can do??
Hi sarah,
Have her talk with an attorney or Notario,
steve
I wish to make a comment which I know will be unpopular but I feel is necessary. It is about the wages most of you report that you pay your domestic workers for 4-5 hours of house work. Please look up Mexican minimum wage as it is by region in the country. The current going wage where I am for a trained construction worker is 200 pesos a day. This is for hard manual labor 10-12 hours a day. The maestro or leader of the construction team gets 300 pesos a day. In my experience most foreigners especially Americans overpay. They do this not out of altruism but as a way to show off their supposed financial wealth this can be proven because they always tell you how much they pay their help. This doesn’t really help the worker unless you plan on employing them forever. What it does cause is inflation, jealousy, a feeling of entitlement and unrealistic expectations. My niece is a college graduate school teacher who works in a public school and makes about $400 a month. My wife was a Doctor and made $1000 a month when we were married. If you think most workers think highly of you because you over pay you are wrong. The refer to you as el gringo pendejo. What you are doing in effect is pricing those with moderate retirements let’s say $1000-2000 dollars a month out of the market. Keep in mind that isn’t me however I firmly believe in not causing inflation and unnatural economic scenarios.
Hi,
Readers can note that the official minimum wage for each individual state can be different than the lowest allowed minimum wage for that region (group of states).
Tables of Minimum wages are listed by the Federal government for each different-job / different-professions.
Some states choose the lowest manual laborer wage as their minimum wage. Other states choose higher-paying jobs/professions to use for their minimum wage.
This means that Paul’s advice to pay only the minimum wage may not fit for your state (paying too little).
Also know that Americans and Canadians often are much more demanding, with higher requirements, about what they expect their domestic cleaner or mozo to do, so, it is often reasonable for Americans and Canadians to pay their cleaners & mozos more $$ due to their higher demands.
The differences between Mexican homeowners benefits for their workers (who feed their cleaners and mozos – pay them: the Aguinaldo – pay the IMSS – pay vacations, pay Infonavit – pay propinas – etc) versus the American/Canadian homeowners, can easily justify the Americans/Canadians paying their cleaners/mozos higher $$ wages, especially because most Americans/Canadians do not pay all the other legal-benefits that good Mexican homeowners pay to their cleaners…
???
Enjoy the day,
steve
Minimum Wage (the Law)
vs
Normal Wage (the amount people usually get paid)
Minimum Wage assumes that this includes payment for SS, Medical, Infonavit, Vacation, severance pay, Year End payment (aka bonus), etc.
If you are NOT paying all of the required payments, shame on you. People work “under the table” because they need to.
Normal Pay for the type of work and the area is often not related to Minimum Wage… sometimes it is the same, sometimes it is much more.
This applies to The US, Canada, Mexico, the whole darn world.
all the Excuses in the world for paying as cheap as you can are just Excuses, personal choices. The justifications: “doesn’t really help the worker”, causes “inflation, jealousy, a feeling of entitlement and unrealistic expectations”, “causing inflation and unnatural economic scenarios”… I declare BS on all of that!
People work for money. They Need money. Because your neighbor pays starvation wages does not make it right.
PS: I found your post heartless
I spend winters in a small fishing village in state of Campeche. When I’m not here I have the plants watered and the leaves raked as needed on the watering and 2 or 3 times a week on the leaves. It takes about 2 hours when doing both leaves and watering. This couple is very trustworthy. They clean my one room house and detached kitchen twice a year just before I come back. I consider this independent contractors, do you agree? How much should I pay for just the yard work?
Thanks for your help.
Hi Mary Ann,
Since we don’t know what the going rates are for yard work and watering in a small Campechana fishing village, I really can’t say.
People in Merida pay around $200 for 2 hours of light yard work in Merida, but a Coke costs $8 in Merida, while the same Coke in retornable bottles in a small pueblo costs $4 pesos.
???
steve
I just want to clarify one thing I didn’t mean to imply to only pay minimum wage. You do need to know what it is though to get an idea of what some individuals make. What is more important is to get to know what different individuals make per day. As an example if you don’t know what a plummer, carpenter, teacher, lawyer, doctor, or accountant typically make then how are you going to know what you should pay. As an example in the small town where I have a home there is a handy man who can basically fix or build almost anything. A the time the going wage for manual labor was 100 pesos a day, I always paid him 150 because he was very good and a hard worker. (I will always pay him 50% more than the standard wage because he is a very good and honest man) There was a Canadian who had the same man do a days worth of electrical work for him and I was present at the end of the day when the Canadian asked him how much do I owe you. The handy man said 2000 pesos. The Canadian said are you serious? He replied yes. The Canadian went in and got the money and paid him. This brings up several important things. Don’t request services if you haven’t agreed on a price before hand. Know the market rates for given work, and lastly don’t be an ass in a small village. This Canadian had yelled at this mans sister-in-law and made her cry the day before for breaking something while cleaning his refrigerator.
How paying more than the going wage will create issues. My half brother who is your typical gringo came to Mexico to go fishing with me. We were on our way out to the fishing area when I saw a small boat tending to a net. I told my worker who used to be a commercial fisherman to pull up to the boat. I asked the guy tending the net if he had a couple of small fish I could use for cut bait to get started. He said sure and threw two fish in my boat. My brother then pulled out his wallet and threw a 50 peso bill into his boat. At this time the going wage was 100 pesos for a days work. The fisherman looked sort of perplexed and insulted because my brother threw the money in the boat instead of handing it to him. Then I turned and my worker looked pissed because my brother had in effect given a man half a days wages for two throw away fish. My worker who has been a friend since we were both 13-14 barely talked the rest of the day. I had to pay him double the going wage at the end of the day based on my brothers actions.
I have been going to and had property in Mexico for about 25 years now. I am half Mexican and Speak fluent Spanish. In the last 20 years the cost of living has quadrupled. 20 years ago I could live well in Mexico on $1000 a month. 10 years ago it was $2000 a month, and now it is $4000 a month. I retire in June of this year and ultimately want to move to Mexico full time. I can stand one more double after that I will be priced out of the market. Let’s not hasten that possible eventuality.
Here is a good article put out by IMSS,
http://www.mexicogulfreporter.com/2014/12/yucatan-state-has-lowest-salaries-in.html
“Mérida, Yucatán –
The Mexican Social Security Institute (IMSS) has reported that Yucatán employers pay the lowest wages in the nation, averaging 211 pesos a day ($14.31 USD), or 6,541 monthly ($443.46 USD).”
When you pay your cleaning lady 200 pesos for two hours of work you are paying her the average wage for a whole day across all jobs.
Hi Paul,
You are free to quote federal government statistics. Your 25 years of visiting Mexico gives you background for what to pay in your area.
The information I offer is from my 35 years of visiting and living here, with confirmation from Yucatecan family, who have lived here, worked here, and run businesses here for over 150 years. I trust my brothers & sisters and suegra when they tell me what the going rates are for mozos and cleaners in Merida and Yucatan state.
The OP asked about the hourly wages for a mozo ~ garden-worker ~ which is what I quoted.
For readers to understand the validity of our explanations: The Pino side of my family (the “Sidra Pinos” – “Champagne de la Yucatán”) were the first soda pop bottlers and first Coca Cola bottlers/distributors for the Yucatan peninsula (1880’s – 1980’s), while the Loroños were the main road builders and civil engineers for Yucatan, Tabasco, Guerrero, and Quintana Roo.
We are working-professionals: architects, engineers, scientists, veterinarians and auto mechanics … who value our pesos as much as the next guy,
steve
Paul,
The federal government figures are likely not realistic.
For further context on wages: A typical albiñile (brick layer) gets paid $1,350 to $1,500 pesos a week in Merida.
e.g. We just finished building some apartments, a project that took about 8 months, and I can tell you that during the 8 months of 2014, the average worker’s pay was higher than $211 pesos a day.
Specifically, the reader asked about rates for mozos. If you re-read what I wrote earlier, I described the “$200 pesos for 2 hours of work” as for a mozo for yard-work – NOT for a cleaning lady (as you propose).
When people misquote things, it’s tough for the dialogue to jibe.
… Further context, a very good Maya mozo we know, who does painting and light concrete work, charges $300 pesos per hour for odd jobs, but he is unusual.
For the readers who asked about appropriate going wage rates, I stick to my advice to talk with neighbors and people in their area to find out what’s appropriate – because the rates we pay in Merida are clearly much lower than what’s paid in Cancun/Riviera Maya (where a construction helper makes $1,400 a week) … while Merida’s rates are much higher than what’s paid in small Campechana fishing villages,
steve
I am looking for a CONTRATO DE EMPLEO for a domestic worker. Where can I find one online?
Thank you
Hola – May I get a copy of the spreadsheet for calculating the aguinaldo? Also if you have one for calculating the vacation pay I would appreciate that also. Thanks!
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I would like your opinion.. We live full time in Baja California Sur “Zone A”. My wife has a house cleaning lady that comes every Saturday to clean the entire house which includes windows, floors, furniture, ceiling fans, walls and everything that needs cleaning. She has never asked for anything such as IMSS. When we first met with her to discuss what we wanted her to do for us we basically told her that we wanted to house cleaned every Saturday and she said she could come at 9am until 1pm as she had an opening then. We asked how much it would cost each time and she said 400 pesos per time. We said great. She has been working for us in June 2015. She cleans houses for 5 other people in our area that we know of. She is an excellent hard worker.
She is self directed and we stay out of her way when she is working. She uses our cleaning equipment.
We have at this time no written contracts etc.
We do keep track of when she comes and how much we pay her each time.
December 15th is coming and we want to make sure we do the right thing.
Hi Warren,
We love it when people try to do the right thing(s).
According to Lic. Spencer McMullen (a very good lawyer from Chapala), under the current Mexican Labor Law you are not required to pay IMSS for domestic workers, like your cleaner.
Still, many many fine people do pay their cleaners IMSS fees, especially when the group of 5 employers (like your) get together to share the costs.
IMSS is a combination of health insurance coverage and small retirement pension account, so you’d be giving her the gift of a bit more security now, and some security in the future.
Kudos,
steve
Steve, I didn’t see this situation addressed anywhere here. We just moved into a newly purchased home in Baja. The previous owner was American and he had a housekeeper who came one day a week. The day after we took possession, she showed up for her regular shift and I turned her away, telling her the previous owner had moved. He has moved back to the U.S., somewhere in Nevada, with no forwarding address. Now she shows up a week later with her english speaking friend, who explained she had worked here for 7 years for this guy, and he did not tell her that he was moving. I told them (truthfully) I have NO money to hire anyone to do anything for me, so as much as I sympathize, there is nothing I can do for her. So apart from the fact the previous owner is an a**, and she is out of a job as well as any severance, I am wondering if there is ANY way she can make our lives miserable, as in being on the hook for the previous owner’s obligations?
PS – no soy rico; mi nombre es Rico
Hey Rico,
She can file a claim with the local labor board … though I don’t know the merits or how the labor board would handle her claim.
There may be some deadlines she has to meet, to qualify (?), so it’s best not to say anything. Let her deal with meeting the formal requirements.
I’m assuming that you amicably explained your situation.
If she goes forward, you may find it worth contacting a good labor attorney who knows how things work in your locale.
steve
Hi Steve,
It’s the time of year when people come to me with questions on calculating the aguinaldo for part-time employees, and I give them the same formula: pro-rated daily wage x 15, where pro-rated daily wage is what you pay them on a work day times the number of days worked in the year divided by 365.
This morning for fun(?), I reread this entire page, and hit a big Whoa! It was from your Dec. 18, 2013 post where you wrote: “Note: You would calculate a full day’s pay by doubling what you pay her for 4 hours.”
Nowhere else have I read scaling up to 8 hours the pay a worker receives for less than a full day’s work. Our maid comes once a week for 4 hours and is paid $200. I compute her aguinaldo based on that as her daily wage: 200 x 15 x 52 / 365. By your statement, I’m off by a factor of 2.
If someone worked 2 hours, one day a week, their wage could be multiplied by 4 in the computation.
If true, just about everyone I know has been significantly underpaying aguilnaldos for part-time, part-day workers. I know the “two-weeks pay” bromide that some folks use is sloppy, but now they could be off by a factor of 2 or more. I don’t remember Rolly ever mentioning it, and his pages were the gold standard prior to Yucalandia assuming that role after his passing.
Your thoughts?
Mark
Mark,
You are a gem.
I wrote the current correct calculation up at the top of the article.
As our articles get updated over time (like the update above), sometimes I don’t find all the old out-of-date references and incorrect advice. I’m going to drink some coffee, eat breakfast, and then correct that old mistake.
THANKS,
steve
I pay by the day. When the work is done, it is done… anywhere from 6 hours to 9 hours, it all comes out in the wash.
Many jobs (regular mainstream jobs full time jobs) are paid by the day, sometimes that day is short, sometimes that day is longer than the magic US 8 hours/day.
First time I have heard of trying to convert scheduled short days into a Full day… logic tells me that factor would be included in the 365 day divisor ( 200 x 15 x 52 / 365 / 2)a.. and that would end up with the same as you have been paying.
so you paid $427 based on 52 days at $200?
I use a different formula but get I the same result… 🙂
PS: my people were quite happy that they got any aguinaldo, most casual workers get zip.
If I am being unfair Please let me know!
Hi SDI,
Yes, your approach works.
If they worked for you on some regular schedule – then you add in vacation pay … then you’ve completed your legal obligations for the year. (see table of values above for how many days pay you owe them – in addition to that 15 days of aguinaldo pay.
Also, if they choose to keep working through the holiday season, you then pay them again for that work – so they collect both their vacation pay plus their pay for working during the holidays.
Happy Holidays,
steve
Thanks Steve.
none work on a regular schedule, we just ask for assistance with house cleaning, construction, etc. as needed… so no Vacation pay, actually I never thought of that anyway.
We don’t keep records of the days worked, I just make a guess of the days worked and did some quick math in my head… 30 days of work is about 1 days pay for aguinaldo, so I just paid double the last time.
Thanks, it sure feels good to “do the right thing”
amen !
It’s truly nice that you treat your casual workers with such respect,
steve
Anyone recommend a good attorney for La Manzanilla area (Jalisco). We have been paying our employees very well but would like to do a bit better documenting. Thanks in advance
Please send me the Excel spreadsheet Aguinaldo and Vacation pay calculator.
I am new to Ajijic, Jalisco and plan to employ help.
Thank you,
Ilana
done
My brother-in-law lived in Mexico. He had hired the same family as housekeepers for nearly 28 years. He has now died. What are my responsibilities in regards to this. Her employer is now deceased; I think he has definitely been paying her well above the normal rate for a parttime worker.
Hi Barbara,
I would start with this link:
http://www.nominax.com/CalculadoraFiniquitoLiquidaci%C3%B3n/tabid/132/Default.aspx
For employees who work only part time… take the amount paid over a whole week… and divide by 7 to get the ‘daily rate’ for aguinaldo, finiquito, etc calculations.
Example, a person who works 2 days a week and makes 350 pesos / day is paid $700 pesos per week. That is 700 pesos divided by 7 for a daily rate of 100 pesos.
Sidelight: The calculator (in the weblink) may default to $100 pesos for daily rate but we simply type in our value.
Salario Diario Integrado should be changed to the same as daily rates (in this example it is 100 pesos) … unless you are paying extra for healthcare etc.
‘Área geográfica donde trabajó‘ is Zone “A” for all of Mexico per one accountant. (??)
To protect yourself from any future claims, you need to have the employee sign a letter that they formally agree that no additional future payments are owed – that all obligations have been met. This is typically drafted by an attorney or Notario.
steve
I’ve found your information invaluable over the years I’ve lived in Mexico (16 and counting in San Miguel de Allende.) I, now, have a disturbing situation. A trusted attorney has given us advice contrary to everything I’ve read here and at other sites on the Internet.
Our gardener of four years and four months quit on Tuesday to leave on Friday. He expects the same severance as if we fired him. Our attorney agrees plus adding vacation to date plus 25%, and the Aguinaldo. The gardener owes us 9720 pesos on a motorcycle we financed for him (it’s in our name) which he has paid back at 300 pesos per week. There are no extenuating circumstances.
So my question is what do we actually we owe him? And how do we handle the repayment of the bike. Can we keep it until he pays it off? Or do we trust him with it?
Thanks, Nicole
Hi Nicole,
I can offer no good guidance (other than what is printed above) on your situation.
We don’t know your specific rights, but if the negotiations with the employee (who quits) goes badly, he can file charges against you, and it can be costly to fight the charges, even if the charges are not true. For example, some bad employees make after-the-fact claims that they were full time (even though they were only part time), others will claim they were never paid aguinaldos nor vacation pay. Yet others additionally falsely claim to have worked more years & along with bogus ‘full-time’ mozo or muchacha claims.
=> it can be a mine field… where you wind up paying a lawyer $50,000 pesos to fight the bogus charges, and still have to pay $80,000 to settle the claims… *sigh*
Re the Motor-Bike payments, do you have a solid legitimate thorough written agreement describing the loan, payment terms, and legal consequences for non*payment or delayed payments? You may be fully within your rights to keep the bike for non-payment, but if that triggers lots of animosity, it could really mess up settling any $$ amounts you owe the employee.
This is all beyond our pay grade… and we are not legal authorities, nor experts, just folk who quote the law & quote the opinions of experts.
If you don’t agree with your attorney, check with a different local attorney (preferably one who specializes in Labor Law) for a second opinion.
Good Luck,
steve
don’t trust , you’re screwed, bien vivendos a mexico, kinda the way it always works
Thanks for your response(s). We decided to “gift” him the rest of the payments on the bike and call it quits. So we’re probably out $3000 +/- pesos. I guess ending things amiably with a signed release (and not that much money) is better than a fight down the road. I’m annoyed and need a gardener but . . . life is good.
Thanks, again.
Hi Nicole,
Comparing the processes & final results of Canadians & Americans in Yucatan who faced the same dilemmas, the people who paid reasonable settlements just to end it …
have ultimately paid less, and suffered far less stress than protracted legal battles.
NOTES:
If the employee did NOT file the proper papers with the local labor board…
or
If the employee did NOT file the proper papers ~on-time~ with the local labor board…
Then IT CAN BE A WHOLE OTHER KETTLE OF FISH…
When they do not file their papers with the proper authorities… or they make their claims too late…
If the deadlines have passed on the labor claims …
then… YOU WIN…
This is why I recommended checking with good lawyers, because good lawyers know:
~ how to check for these things,
~ which things to check for,
and
~ whether the employee’s claims/requests can be easily & safely ignored
???
steve
Please send me the Excel spreadsheet Aguinaldo and Vacation pay calculator. Thank you.
done
Please send me the the excel spreadsheet/calculator. Thanks so much!
Done
I had an employee who worked with us 5 months and I had to change her work hours as our business changed and needed better coverage. When I changed her hours she quit. She is now in here demanding liquidation. I was paying her 125 a day for 6 days a week. My question is do I owe her liquidation since she quit, refusing to work the new hours. Thank you.
Would you please send me the aguinaldo and vacation pay calculater? My email is cindymor3@yahoo.com.
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Would you please email me the aguinaldo and vacation pay calculator? My email is wrj@bajajorgenson.com
Thank you
Warren
Please send me a copy of your Christmas payment for maid. 1 day a week
Done
Question… do all the labor laws apply for employees of an Assisted Living Facility in Mexico, all employees will most likely be full time in order to improved controls for the facility, I am currently performing due diligence on a potential venture, thank you
yes
Is there a guide available of bullet points with short decriptions available? Powered by Cricket Wireless.
Thank you for the information, just wanted to confirm what I believed to be accurate. Question… would you personally know of any investors that would want to participate in an Assisted Living facility in Mexico?, thank you
Frank Dapena
USA
There are 2 groups currently woking on this right now.
Contact Gene Cirak.
Happy Trails,
steve
Where are your offices located?
Merida, Mexico
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Unfortunately my Domestic Help died of a heart Attack at her home. She has no dependents.
Do I owe Death Benefits???
I have read everything here and there is a lot of very helpful information. except the one thing I was looking for. I have a woman who cleans my rental house once a week for 3 hours only. if she calls in sick, do I need to pay her for that day, the next time she works? She didn’t request to come another day.
If we follow the advice of one Q. Roo labor abogado: If you do not direct her (supervise her actions, telling her what to do & how to do it) , and if she does not live on-site …. then she’s functioning as an independent contractor – like the guy who cleans your pool or fixes a leaky sink.
As a regular worker … You do owe her the year-end Aguinaldo 15 days of “daily rate” pay, plus annual Vacation pay.
Happy Trails, Steve
**Hint… This area of labor law is not clearly defined, so you could ask 4 different abogados, and get 4 slightly different analyses~assessments~explanations.
Unfortunately our wonderful domestic died of a heart attack at her home. She worked part time
2X week for 19 years. We loved and cared and miss her!!! We see her once a year.
Her Daughter, who we cared for….school, books, pencils, paper etc. is Suing us for “excessive work load”. Domestic, injured her ankle June 6, 2018 and died Aug. 19, 2018. We paid for medicine, August 20..we paid for her funeral. What are our rights under Mexican Labor Law?
Why would her Daughter, now 24, married with one child , have reasons to sue us?
Talk with a good labor attorney.
Steve
How to find a good labor attorney? Our wonderful domestic was paid the highest salary of any other domestic and contract to work 2 days a week, 4 hours if necessary. We loved Juanita. She loved ‘her’ home and was welcome to stay anytime. We would see her once a year for one week, she was our family. Her Daughter, now 24 years old and married, who we cared for since she was 4 years old, (School, clothes, supplies and would be with her Mother while she cleaned, filed claim with Labor Law, “Mother was ‘over worked’
NO… No persons in Condo for 4 months. NOT OVERWORKED. Do I have any rights? Ask for Death Certificate? Autopsy, Health history? Weight: 230 pounds, 56 years old.
Ankle injury on June 6, 2018, saw Dr. June 14: I paid for meds, visit: Ibrophen,
No one investigated if ‘work-related accident’. 74 days later, Juanita died of heart attack on Sunday, August 19, 2018, one year after her Father died.
August 20th, 2018 buried. I paid for funeral.
What is Possible?
Definitely find a talented labor attorney.
Each state has different filing deadlines & filing requirements that the claimants must meet. A good attorney knows those state requirements, and can determine if the claimants have filed a valid case – and can advise you on how to best proceed.
Steve
My brother is building a home in Puerto Vallarta and hired and independent construction crew to do it. He was told that he must provide the independent workers with health insurance. My question is why is this the case that he would have to pay instead of the company?
It’s simply 50 years of black-letter Mexican law.
Why would he not want medical protection for his workers??
Why would he not want accident protection for his workers??
Why would he want them to have their legally required retiremnent benefits?
Sure … He “saved money” by not hiring a contractor … but is than an excuse to not pay the … 3% … to make his workers lives just a little bit better?
???
Hard to understand,
Steve
Wow! Steve
You really went on a rant.
Sorry I asked.
One woman’s “rant” … is another man’s recitation of important critical facts.
?? Why not pay the 3% ??
?? Why cheat poor working-people ??
(by claiming ignorance??)
Reality: We’ve been dealing with the negative consequences of a few ~gringos~ (the bad entitled selfish foreigners) consistent choices to ignore Mexican law – because we ALL swim in the same community pool.
When foreigners act like gringos,
1. It creates an atmosphere & culture of lawlessness for foreigners
– where other gringos, especially newbies, imagine that Mexico is like DisneyLand for them … no rules… do whatever you want, based on the consistent bad acts of some foreigners.
2. I am a Mexican citizen, with a large extended Mexican family … and gringos are WRECKING many of our basic services needed by Mexican poor people … with the gringos cutting corners … decades of CHEATING my poor countrymen out of LEGALLY REQUIRED benefits.
3. Unless the foreigners … and English speakers … who have a voice … SPEAK OUT … then the rest of the gringo-community is encouraged & emboldened to continue acting badly.
So … Your perception of “a rant”
… actually is just a man who loves his country
… loves his people
and is tired of Americans & other gringos breaking our laws, just to save themselves a few $$
?? Why not pay the 3% ??
?? Why not follow ~simple clear~ established Mexican law ??
Happy Trails,
Steve
Alicia: you say he “hired and independent construction crew”… so what company?
I have no idea what the local custom is in Puerto Vallarta, but even if it is not direct employment (and it does sound like that to me) the minuscule cost would be passed on the the owner any way.
Where you come from must be different. People actually Depend on getting paid. (benefits are Part of they pay)
… The workers must be paid. Just encourage him do the right thing.
PS: I fully agree with Steve. I too am fed up with my family and friends getting screwed by the arrogant foreigners.
Hello – After having read ALL the comments from beginning, I realize that I underpaid my maid each year for her aguinaldo. That will be corrected since I now know the formula. Thank you.
But on another thought, I recently read on Mexican news, that the new minimum payment starting in June 2019, for domestic employees is 113.5 pesos, with a 10% increase in August, and another 10% increase in November. Please tell me if I understood this correctly, my Spanish is not yet perfect, but working on it. I live in Jalisco, and pay her presently 75 pesos. I will gladly raise her wage.
Thank you.
It’s not completely clear to us that these rules are finalized.
We typically wait until the bugs are worked out of new programs – waiting until the new policies have become clear established Black Letter law, before announcing the requirements.
This issue is particularly sticky because of the IMSS and SAT reporting requirements, where almost 4 out of 5 maids who do once a week house-cleaning are saying they prefer to be paid like normal ( ‘bajo de mesa’ ) … and NOT have their income reported to SAT.
???
Saying it another way:
The policies make sense for women who are full-time maids or live-in maids … but there are some significant bugs to be worked-out for the part-time cleaners, who act as independent contractors versus part-time domestic employees.
???
We prefer to hear some professional advice from a good labor attorney first, before reporting what people should do.
Steve
We have just sold a restrestaurant and new owners will be taking over. All three of our staff will remain on with same pay hours and current position. Are we required to them anything???
We don’t know business rules for when a business is sold. Contact a good labor attorney to determine if the Finiquito and Vacation pay are owed.
Will the new business owners be paying the workers for an entire year’s Aguinaldo (yr end payment) and an entire year’s Vacation time off and Vacation pay this coming December 20’th?
Will the new business owners be calculating their Vacation days off based on their total years worked at the premesis, or is the new owner a new separate entity, who will start their “vacation pay” calculator as the date of purchasing the business. … The same thing goes with the new business owners commitment to pay for ALL years worth of Finiquitos, if they lay off some employee.
If the new owners are planning to not pay the full years Vacation time (12 mo.) and not paying the full years (12 mo) of Aguinaldo, and any full past years of employment in any future Finiquito, then it would seem that you owe your employees both their Finiquitos, and your portion of this year’s Aguinaldos and your portion of this year’s Vacation days off.
Does that make sense?
Should employees be cheated-out of their legally owed Finiquitos, Aguinaldos & Vacation time, just because you (the owner) sold the business?
???
Best of Luck
WOW just what I was searching for. Came here by searching for
abogado extranjeria pontevedra
Hello,
Thank you for your article.
My specific question is about a pool service with many other clients that we have used for a year. He and his assistant come once a week for about 15 minutes and he gets paid a fixed monthly sum.
If I want to let him go, does he have a right to severance ?
Thank you,
Andy
The legal standard that one labor lawyer described says that an independent private contractors act-work independently, without instructions nor directions… versus domestic employees whom you direct or instruct.
A plumber, painter or electrician is generally an independent contractor … as you (hopefully) don’t tell the electrician how to wire the outlet … while a house cleaner is often given instructions & directions on how & when to do things.
Hello,
I have used a pool service for over a year. He and his assistant come once a week for 15 minutes and I pay him a monthly fee. He has many other clients.
If I want to let him go, am I required to pay severance ?
Thank you,
Andy
The legal standard that one labor lawyer described says that an independent private contractors act-work independently, without instructions nor directions… versus domestic employees whom you direct or instruct.
A plumber, painter or electrician is generally an independent contractor … as you (hopefully) don’t tell the electrician how to wire the outlet … while a house cleaner is often given instructions & directions on how & when to do things.
How does your pool guy act? … like an independent contractor …?
My weekly paid gardener is retiring after 10 years of service. Do I owe him termination pay AND a pension? …. just termination pay? … or just pension? What am I obliged to pay? Thank You.
You would likely owe him all of the above, if he qualifies as your employee.
Mexican Lawyers Bufete Sanchez Navarro say
“5.5.1 ADVANCED AGE AND SENIORITY
There is advanced age when the employee is deprived of remunerated job after he reaches the age
of sixty years.
There is seniority when the employee is deprived of a remunerated job after he reaches the age of
sixty five years.
In both cases the employees have the right to receive a pension and medical services. The pension
will proceed if the employee has 1,250 weekly contribution fees (24 years).
The difference between the advanced age and seniority consists in the percentage of the pension. In
the advanced age the employee will receive 80% of the pension, while in seniority the pension will
be of 100%.
The employer fee is 3.150% of the employee’s wage, and the employee fee is the 1.125% of his
salary.
5.5.2 RETIREMENT
This is provided by the recently established Retirement Savings Plan and is administered in
conjunction with the Workers’ Housing Fund (INFONAVIT).
The retirement savings plan is administrated by an account at the Retirement Fund Administrator
(AFORE) chosen by the employee, in which the employer has to make the corresponding
payments.
This account is integrated as follows:
Employer fee Employee fee
Retirement 2% of salary
Advanced age and Seniority 3.150% of salary 1.125% of salary
Housing 5% of salary
Voluntary contributions optional optional
Complementary retirement
contributions
optional optional
The employee may withdraw an established amount of money from this fund upon retirement at his
60 or 65 years and when he has become unemployed.”
See this link to see the table (page 17) for details…
Me?
I’d contact a good labor lawyer, in your area … to handle it.
Steve
Question regarding full time maid.
I have a full time maid and we have enrolled her in IMSS.
My question is in regards to days off for illness, surgeries (she did not use IMSS, and days off for sick child. We have been paying for these days off, but it seems to becoming excessive. Can any of these days be subtracted from her vacation pay or is there a limit to paid sick days. I know she depends on her wages to live and I really don’t want to withhold from her wages.
Thanks
Hi Phyllis,
Good questions.
I think it’s time to talk with a labor attorney, who knows your state’s rules.
For us? … With all the complications in our lives from COVID, we have personally chosen to give our housekeeper / medical-assistant the sick time off at ½ pay.
We do not know your legal responsibilities in this case, but it seems like a good time for people to support each other during this once-in-a-lifetime prolonged crisis.
??
Steve
Hi Phyllis,
Because I’m the treasurer of a registered, non-profit civil association with employees, I have forced myself to at least scan the labor laws, though we rely on a Mexican accountant/CPA to keep us legal. I use the July 2, 2019 edition of “Ley Federal del Trabajo” for background info before talking to the accountant. You can download it here:
Click to access Ley-Federal-del-Trabajo-legal-zone-m%C3%A9xico.pdf
I’m not giving legal advice, because I’m not a lawyer, but you might want to familiarize yourself with these sections:
Article 42 says work can temporarily be suspended without responsibility to pay if the worker has a contagious disease or a temporary incapacity caused by an accident or disease that wasn’t the result of an occupational hazard. Article 43 talks about IMSS’s role in determining the length of time they can be off based on the illness. And Article 47, clause X, says an employee can be terminated for more than three absences in a 30-day period without the employer’s permission or without just cause. (Requirements for putting the worker on notice appear are at the end of that article.)
None of these are exactly on point with your situation, but it might be a starting point to understand your responsibilities, as well as the worker’s.
The consequences for violating a worker’s rights can be severe, so Steve’s suggestion about using a labor attorney is sound (i.e., don’t rely on armchair internet non-lawyers like me).
We haven’t allowed anyone to enter our house since late March, and we don’t want anyone riding a crowded combi to get here, so we’ve continued to pay our maid and gardener full pay plus something extra even though we’ve told them not to come. I want to protect them as well as us. I understand that others may not have that option, but in these extraordinary times, we should try to put the safety and health of our loyal workers and support them as much as possible.
— Mark
“we’ve continued to pay our maid and gardener full pay plus something extra even though we’ve told them not to come.”
Kudos Mark
we have been doing the same
We have a live in houseboy. We pay him weekly. Do we also have to include room and board in his “salary”? Or do we deduct it from his salary, I’m not clear on this.
Calculate his annual total pay … 52 weeks(?) x $?? pesos of weekly pay = Total Annual Pay
Then multiply that Total Annual Pay times 15/365, to get his Aguinaldo (of 15 days worth of Daily Rate pay).
Total Annual Pay x ( 15/365 ) = his Aguinaldo.
= = = = = = = =
Then, if he as worked for you for you over any 365 day period in the past, he is owed Vacation time off and Vacation pay for that time: (see above)
For an employee who has finished 1 yr, you owe him 6 days of “Daily Rate” pay.
The quick way to calculate this is to divide his Aguinaldo by 15 (for the 15 days of Aguinaldo pay) to get his daily rate, and multiply that by 6 days:
Aguinaldo x ( 6 / 15 ) = 2020 Vacation pay… and he also gets 6 calendar days of vacation time off (during 2020).
If he wants to work those paid Vacation Days off, then you pay him both the Vacation pay, and his regular pay for those 6 days.
Happy Holiday… Steve
do we include room and board in calculating his salary?
We have a live in houseboy. i9n relation to Aguinaldo and vacation pay, how do we calculate the room and board, is it considered as part of his salary?
Do we include room and board as part of salary?
Just as you do no include IMSS payments nor lunches fed to employees, I understand that you do not include room & board, but that is just a personal opinion,
Talk with either a good accountant, or a good labor attorney,
Steve
What is the cost of IMSS insurance? I thought we were now all covered for tier I and tier II health matters by showing our ID/Visa?
Fees range from $310 USD a yr, up to $740 USD a yr …
0 – 19 yrs age … $ 6,200.00**
20–29 yrs $ 7,650.00
30–39 yrs $ 8,250.00
40–49 yrs $ 9,550.00
50–59 yrs $ 9,950.00
60–69 yrs $ 13,800.00
70–79 yrs $ 14,350.00
over 80 yrs $ 14,850.00
My Domestic RESIGNED-accepted Job with Government Social Security.
Domestic worked 2 X a month Received 1,050.00 per day = $51.64 USA
Total per month: $103.28 per month for 2 days a month.
She wants a “settlement”
Question: Why would I need to pay Settlement when she resigned?
Talk with a good labor law attorney.
Mexican labor law is very different from US or Canadian law – so it’s better to have a qualified licensed professional evaluate the specific details of you and your worker’s situation, to best protect you from annoying & stressful legal actions.
Could. Please have a copy of the Aguinaldo
and vacation pay calculators. Thank you for the valuable advise contained within this post. Clear and much appreciated.
Sent
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