BajaNomad - Mexican Labor Laws--

Mexican Labor Laws--

Pages: 1 2

JESSE - 7-29-2009 at 04:01 PM

Quote:

Originally posted by Dave

Quote:

Originally posted by JESSE

They can collect the equipment in your business.

I don't own it. Owned by a separate corporation that leases to me.

Isnt spending the next 2 years fighting to get the equipment back from them, the same as losing it?

They wouldn't get out the door with it

Dave - 7-29-2009 at 04:16 PM

Quote:

Originally posted by JESSE

Isnt spending the next 2 years fighting to get the equipment back from them, the same as losing it?

They can only take listed assets owned by the owner/business. I have a friend who's been through the process.

The only thing I own is a lease. They're welcome to it.

JESSE - 7-29-2009 at 04:22 PM

Quote:

Originally posted by Dave

Quote:

Originally posted by JESSE

Isnt spending the next 2 years fighting to get the equipment back from them, the same as losing it?

They can only take listed assets owned by the owner/business. I have a friend who's been through the process.

The only thing I own is a lease. They're welcome to it.

Its not about who takes what, its about them not letting you or anybody take anything from the property, they can drag this process for ever and not even the Coca Cola guys will be able to get their refrigerators back until its over.

OK, let me rephrase

Dave - 7-29-2009 at 04:56 PM

Quote:

Originally posted by JESSE

Its not about who takes what, its about them not letting you or anybody take anything from the property, they can drag this process for ever and not even the Coca Cola guys will be able to get their refrigerators back until its over.

No authority can place a lien or take property that you or your business doesn't own to satisfy a judgment. Don't doubt that they can try but a good attorney will shut it down. Seen it happen.

And, not that I have any but why would I care if Coke ever got its equipment back?

JESSE - 7-29-2009 at 05:47 PM

Quote:

Originally posted by Dave

Quote:

Never in my career, have i ever seen anybody, and i mean, even large corporations, being able to get anything out of a building where there was labor problems.

Lets agree to disagree.

MitchMan - 7-29-2009 at 05:58 PM

I wonder if the reason Los Arcos hotel in La Paz is shut down is because of a stupid labor issue relating to one or two disgruntled employees who made a claim?

DENNIS - 7-29-2009 at 06:08 PM

Quote:

Originally posted by MitchMan
I wonder if the reason Los Arcos hotel in La Paz is shut down is because of a stupid labor issue relating to one or two disgruntled employees who made a claim?

Are people camped out in front of the door under large red and black banners?

Are we talking about seperate issues?

Dave - 7-29-2009 at 06:10 PM

Quote:

Originally posted by JESSE

Never in my career, have i ever seen anybody, and i mean, even large corporations, being able to get anything out of a building where there was labor problems.

Lets agree to disagree.

I'm talking about a disgruntled employee. Aren't you talking about unions?

JESSE - 7-29-2009 at 06:11 PM

Quote:

Originally posted by DENNIS

Quote:

Originally posted by MitchMan
I wonder if the reason Los Arcos hotel in La Paz is shut down is because of a stupid labor issue relating to one or two disgruntled employees who made a claim?

Are people camped out in front of the door under large red and black banners?

Yes. Somebody tried to get in a few months ago, and in just a few minutes, you had Wrestlemania 10 in front of the Hotel.

monoloco - 7-29-2009 at 06:12 PM

i think that the bottom line is that Mexican labor law stifles economic growth in Mexico. Maybe this is good for keeping Baja from becoming over developed but I suspect it's not good for the people who make their livings here.

MitchMan - 7-29-2009 at 06:15 PM

Dennis,
Several months ago I think that there were people out front, I don't remember reading banners in front, but I do believe there were some banners of some sort. Lately, I don't think there is anyone hanging around in front, but I only drove by quickly a few times in the last month. What do the banners typically indicate?

DENNIS - 7-29-2009 at 06:21 PM

I remember what I think was a labor dispute at La Fonda / La Misión. They occupied the entrance, more perhaps, for what seemed like years. Black and Red banners , Huelga/Strike, all over the place.
Don't know the details but, when it was all settled, the property was split up.
I'm not sure about the details. Maybe Dave can fill us in. It was in his territory up there.

Dave - 7-29-2009 at 06:36 PM

Quote:

Originally posted by DENNIS
I remember what I think was a labor dispute at La Fonda / La Misión. They occupied the entrance, more perhaps, for what seemed like years. Black and Red banners , Huelga/Strike, all over the place.
Don't know the details but, when it was all settled, the property was split up.
I'm not sure about the details. Maybe Dave can fill us in. It was in his territory up there.

Long story short...Joe had a labor union than was killing him. They demanded higher wages. Went on strike and black flagged the place. Joe got permits and licenses and was in back business in his home in two weeks. Basically said picket all you want the old place ain't gonna reopen. They were gone in a few weeks.

flyfishinPam - 7-29-2009 at 06:45 PM

Quote:

Originally posted by Dave

Quote:

Originally posted by JESSE

Isnt spending the next 2 years fighting to get the equipment back from them, the same as losing it?

They can only take listed assets owned by the owner/business. I have a friend who's been through the process.

The only thing I own is a lease. They're welcome to it.

well perhaps that's the way it worked in Rosarito but in other places not so. in my case both my company and me were named in the suit. they tried to take my house away and other things but to make a long story short these things they tried to take were not in my name. once the judgement is against you they can take three times worth of assets away until you pay up. I ended up settling out of court just to end it, it wasn't worth the fight. for a thousand dollars or so I'd rather just pay, or better yet avoid the situation in the first place such as ways that Jesse explained. Dave I understand you closed your business? maybe the way things were when you were running your business a couple of years ago changed? also those lawyers always tell you what you want to hear, you're protected, you'll win, etc ad nauseum but they do that to keep your encouragement up so youkeep fighting and keep paying them.

DENNIS - 7-29-2009 at 06:46 PM

Quote:

Originally posted by Dave
They were gone in a few weeks.

A few weeks? Seems like they camped out there forever. Every time I'd go to the states, they were still there. Seemed like a year or more.

monoloco - 7-29-2009 at 07:05 PM

Another thing to remember is Mexican court cases can take years, I have been involved in one for 3 years with no end in sight. Take my word for it, it's not worth it. Avoid the Mexican legal system at all costs, the only winners are the lawyers.

Dave - 7-29-2009 at 07:26 PM

Quote:

Originally posted by DENNIS

Quote:

Originally posted by Dave
They were gone in a few weeks.

A few weeks? Seems like they camped out there forever. Every time I'd go to the states, they were still there. Seemed like a year or more.

There were maybe one/two guys there for months. A token appearance. The main strike lasted for less than a month. It didn't matter. The restaurant was permanently closed. Joe sold the entire property a few years later.

Pam, we sold the deli location several years ago. For a while I coasted but got back in business in a big way about 10 months ago. Have a bar/restaurant in Puerto Nuevo. Also starting an unrelated franchise operation. I'm very familiar with Mexican labor law as my corporate attorney and accountant are specialists in the field.

I would never advise operating in Mexico unless one has intimate knowledge of corporate and labor laws...and how to use them to your advantage.

jls - 7-29-2009 at 07:50 PM

This has been a very interesting thread. Maybe we should have one called "doing business in Mexico". Then people would know of legit lawyers and practices.

DENNIS - 7-30-2009 at 04:58 AM

Quote:

Originally posted by bajaeng

That amount is in dollars at yesterday's exchange rate. Upon termination, have to pay 3 months salary, unused vacation, some profit sharing, prorated christmas bonus, and another load based on number of years of service.

I don't know what to say. I had no idea the structure was so...punative. You don't merely hire somebody....it's more like taking on a partner.
I would be curious to know how much of this nonsense has been negotiated away by the Maquiladoras. I can't imagine big business volunteering for this abuse.

And to think, on top of all this government control, there are unions to deal with.
A third world country is it's own biggest enemy.

DENNIS - 7-30-2009 at 07:53 AM

Here's some legal sounding info on the subject:
------------------------

http://www.fredlaw.com/articles/international/Mexico.pdf

oladulce - 7-30-2009 at 08:38 AM

I hadn't thought of this until this post. Our situation is more along the lines of Diane's original question.

The contractor we'll be using for home construction says that if we pay the SS ourselves for the 2 main albaniles, we can save the percentage he would have tacked on for this service. That sounds easy enough (ha ha) and will save us several thousand dollars.

But because he usually handles all the SS for everybody and gives us the receipts at the end of construction, we've never had to deal with it before.

So now I'm wondering- what about the guys who do the dump truck , tractor work, and the water truck? The receipt they've given us for work in the past had a Mex corp name on it so can I assume that their SS is taken care of? Do we need to question the guys delivering block or cement about their SS status before they enter our property?

DENNIS - 7-30-2009 at 08:45 AM

Quote:

Originally posted by oladulce
So now I'm wondering- what about the guys who do the dump truck , tractor work, and the water truck? The receipt they've given us for work in the past had a Mex corp name on it so can I assume that their SS is taken care of? Do we need to question the guys delivering block or cement about their SS status before they enter our property?

No. They work for the material yard or are private contractors.
What with the fear factor being raised here, it's easy to take all this nonsense to extremes. I think the government would like it that way.

Whaa?

Dave - 7-30-2009 at 09:35 AM

Quote:

Originally posted by oladulce

The contractor we'll be using for home construction says that if we pay the SS ourselves for the 2 main albaniles, we can save the percentage he would have tacked on for this service. That sounds easy enough (ha ha) and will save us several thousand dollars.

Whether he pays or you pay isn't it the same percentage?

There's a reason he wants you to pay. They become your employees, not his.

DENNIS - 7-30-2009 at 10:02 AM

Quote:

Originally posted by Dave
There's a reason he wants you to pay. They become your employees, not his.

Good point. It would, I suppose, follow that the owner, as employer, would be responsible for all gratuities owed the workers...vacation, severence, Christmas and maternity leave.
Besides, if a contractor told me he would charge me thousands of anything extra to do his job, he'd be out the door. You can see what he's going to do to you as often as he can.

DENNIS - 7-30-2009 at 10:58 AM

Here's another tidbit of pain for you who want to own a business in Mexico:
------------------------

mandatory profit sharing

Employers in Mexico are obligated to pay workers a share of the profits based on their annual tax declaration. This obligation is detailed in Chapter VIII of the Labor Law. Workers have the right to object to the annual declaration.

See: REGULATION OF ARTICLES 121 AND 122 OF THE FEDERAL LABOR LAW (Regulation for profit sharing)

CONSTITUTION

The right of workers to participate in the profits of a company is established in section IX of Article 123A of the Political Constitution of 1917. The Constitution establishes the following in order to accomplish this:
a) A National Commission made up of labor representatives, employers, and the government, sets the percentage that must be shared with workers. (10%)
b) The National Commission performs studies on the general condition of the National economy. This Commission is supposed to take into account industrial development, and reinvestment of capital.
c) The National Commission can review the percentage when the studies justify it.
d) The law can exempt new companies from the obligation of profit sharing during a limited number of years.
e) The amount of taxable income for purposes of profit sharing is arrived at by using the provisions in the current Income Tax Law (ISR). Workers can make objections to Hacienda.

The Federal Labor Law, Chapter VIII,
PARTICIPATION OF THE WORKERS IN THE PROFITS OF BUSINESS Articles 117 – 131 covers profit sharing details: calculation, criteria, and division of profits.

FAQ ABOUT MANDATORY PROFIT SHARING IN MEXICO

Who has the right to profit sharing?
All workers receive their share of the percentage determined by the National Commission for the Participation of Workers in the Profits of Business. (Art 117)

What is considered the base profit?
Taxable income according to the Income Tax Law (Art.120 of the Labor Law)

Do employers have to provide workers with documents describing how the calculation is made?
The employer has a period of ten days from the presentation of his annual tax declaration to deliver a copyto the workers . The copy is delivered to the Union, or representative of the majority of workers.

When does the Profit share have to be paid?
Profit sharing for workers must be paid sixty days following the date of the payment of annual tax declaration, even if the workers have filed an objection.
For companies the date to pay workers is May 31. For individuals (sole proprietors) that are not corporations the day is June 30. (Art 122 of the Labor Law)

What factors are taken into consideration?
The profit share is divided into 2 parts. The first part is paid equally to all workers, taking into consideration the number of days worked by each one during the year. The second part is divided in proportion to the wages paid during the year.

What employers are exempted?
New companies are exempted during their first year of operation. New companies are exempted who are manufacturing a new product during the first two years. Mining companies are exempted during the exploration period. Humanitarian non-profit organizations are exempted.

What are the general rules for profit sharing?
Directors, administrators, and general managers of companies do not participate in profit sharing. Workers of confidence depending on their salary are included. Women on maternity leave or disabled workers are considered to be active workers. Domestic workers do not participate. Temporary workers will have the right to receive a share if they have worked at least 60 days.

Thank God

Dave - 7-30-2009 at 11:24 AM

Quote:

Originally posted by DENNIS

Employers in Mexico are obligated to pay workers a share of the profits based on their annual tax declaration. This obligation is detailed in Chapter VIII of the Labor Law.

Not all business classifications are required to pay profit sharing nor are all employees qualified to receive them.

DENNIS - 7-30-2009 at 11:36 AM

Quote:

Originally posted by Dave

Not all business classifications are required to pay profit sharing nor are all employees qualified to receive them.

Yeah....I can't imagine Toyota obeying the letter of the law on that one.
I would be inclined to shop for a kick-ass accountant anyway.

vandenberg - 7-30-2009 at 11:48 AM

Wonder if Slim sets aside a sufficient amount to satisfy his workers. :biggrin:

Maybe he knows somebody higher up ? :lol:

vandenberg - 7-30-2009 at 11:52 AM

This whole thread comes down to the fact that moving permanently to Mexico is not for the fainthearted and you definitely need some of that old pioneering spirit and not get easily discouraged.

That said, you may croak a little faster due to the stress, but at least you do it in a beautiful setting. :biggrin:

oladulce - 7-30-2009 at 05:27 PM

Quote:

Originally posted by DENNIS

Quote:

Originally posted by Dave
There's a reason he wants you to pay. They become your employees, not his.

Good point. It would, I suppose, follow that the owner, as employer, would be responsible for all gratuities owed the workers...vacation, severence, Christmas and maternity leave.

As usual, I can't tell if Dave is kidding or not :spingrin:

But, nope they’re still his employees.

His accountant sets up the IMSS accounts for the job which is in our name so it matches our building permit, catastro info, and final building manifestation. Same as our previous construction projects with this contractor. The only difference is we’d be making the monthly SS payments, which I understand can be made online directly to the National Bank. In the past the contractor/his accountant made the payments from our general construction funds.

You’re right Kate, dealing with any snafus that arise would be a pain in the butt and not worth the effort. And I need to know more about the efficiency of the IMSS online bill payment system before we sign up for this. ayy yaa yaa

Rolly’s article discusses this topic:

If you hire a building contractor to build or remodel your home, he is responsible for the workers he employs. But the question of who pays the IMSS bills is a matter to be worked out between you and the contractor. Generally the contractor will register the job in your name, and you will responsible for paying the monthly bills.

DENNIS - 7-30-2009 at 06:56 PM

Oladulce..........You are tooo trusting. That may hurt you eventually. I hope not.

MitchMan - 7-31-2009 at 10:01 AM

Originally, I had aspirations of living in Baja full time and starting a restaurant and a rea estate sales office. But, after this thread together with my own experiences relating to real estate acqusition and ownership and related legal and administative challenges, there is no way in hell I will do anything that involves employees. NO way.

The only sane reason I can imagine for having a business that involves employees is if that business, for whatever reason, is wildly profitable in spite of the extra cost to maintain employees. For me, I would limit myself to consultation type work or administrative services that do not involve employees, OR, form a partnership with a few trustworthy souls wherein we do all the work ourselves as working partners/owners (most likely non-Mexicans) and not as employees of any entity.

That's it for me.

arrowhead - 8-1-2009 at 12:50 AM

Quote:

Originally posted by MitchMan
Originally, I had aspirations of living in Baja full time and starting a restaurant and a rea estate sales office. But, after this thread together with my own experiences relating to real estate acqusition and ownership and related legal and administative challenges, there is no way in hell I will do anything that involves employees. NO way.

This thread is only the tip of the iceberg. Wait until you find out all the illegal things you have to do just to stay in business in Mexico. And if you happen to have a very profitable business, in spite of all the obstacles, every inspector from every bureaucracy in the state will be in your place and find something terribly wrong that is going to cost a lot of time and money to correct. That is unless you happen to have some comprensión. You'll learn all about comprensión, it means to understand the situation the guy is in and grease his palm to go away.

Then when you think you are done paying all the public servants to leave you alone, you'll still have to deal with the extorsion from the gangs. You don't want your windows broken every night, do ya?

Pages: 1 2