BajaNomad - Mexican Labor Laws--

Mexican Labor Laws--

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DianaT - 7-25-2009 at 02:20 PM

This is not about ex-pats, it is about hiring Mexican Citizens. I have read and heard so many different opinions about this, that I hope someone like Jesse who has a business can clarify these questions.

What are the rules for paying the worker's social security under the following situations.

1. You hire a person to do major construction, or work for you on a regular basis, I assume you are responsible for the social security???

2. You hire a contractor to build for you and he hires the workers and he pays the social security, what are your responsibilities??

3. You hire a person who calls themselves a contractor, he hires the workers but does NOT pay their social security, what are your responsibilities??

4. You hire a person for a small job, let's say a plumbing repair, and that person is fully employed elsewhere where they receive social security, what are your responsibilities??

5. You hire a handy-man who makes a living doing small jobs and has no social security. What are your responsibilities?

What are the labor laws?

Thanks
Diane

Dave - 7-25-2009 at 03:16 PM

Unless you have a written agreement that specifies a contractor or independent will pay SS then you are responsible.

Quote:

Originally posted by jdtrotter

1. You hire a person to do major construction, or work for you on a regular basis, I assume you are responsible for the social security???

<Unless that person has a taxpayer ID and assumes written responsibility you are obligated.>

2. You hire a contractor to build for you and he hires the workers and he pays the social security, what are your responsibilities??

<The contractor must provide his taxpayer ID, documentation that they are his employees and that he pays workers SS. You must have a written contract stating he will pay their benefits. My accountant requires I issue a separate check made out to employee benefits listing each worker.>

3. You hire a person who calls themselves a contractor, he hires the workers but does NOT pay their social security, what are your responsibilities??

<you're stuck>

4. You hire a person for a small job, let's say a plumbing repair, and that person is fully employed elsewhere where they receive social security, what are your responsibilities??

<You're required to pay your portion of SS. Again, it's best to issue separate checks. You can cash them yourself but you'll have a written endorsement.>

5. You hire a handy-man who makes a living doing small jobs and has no social security. What are your responsibilities?

<Short term? Then see above.>

JESSE - 7-25-2009 at 03:35 PM

Dave is right, but one thing to consider is that Baja California Sur, is far worst than Baja Norte concerning labor laws. I have seen things here that i never saw back north.

1.-Locals here consider suing their boss for whatever they can think of right or wrong, the estate sport. This is unfortunately having serious repercussions for the locals. Nobody wants to hire them and prefer to bring people from other states.

2.-Unions here are extremely stupid and corrupt. Right now here in La Paz, we have a case where a union is threatening a business with closure, unless the business becomes unionized. Problem is, neither the business, nor the workers, want a union.

So if you hire a contractor, make sure there is a document that makes it very clear he has responsability for social security, infonavit, insurance, and local, estate, and federal taxes and requirements. Its going to cost you more, but when the thieves come, you will be semiprotected.

Dave - 7-25-2009 at 03:52 PM

Quote:

Originally posted by JESSE

1.-Locals here consider suing their boss for whatever they can think of right or wrong, the estate sport. This is unfortunately having serious repercussions for the locals. Nobody wants to hire them and prefer to bring people from other states.

<That's why it's important to protect your assets. Winning a suit only matters if there's a reward.>

2.-Unions here are extremely stupid and corrupt. Right now here in La Paz, we have a case where a union is threatening a business with closure, unless the business becomes unionized. Problem is, neither the business, nor the workers, want a union.

<No white unions down there? My employees belong to a union...Mine.>

DENNIS - 7-25-2009 at 04:05 PM

The northern end of Baja won't have stringent enforcement of laws regarding labor between U.S. expats and employers. North Baja allows for the fact that tight labor laws might be enforced in kind in the US. They wont take that chance.

[Edited on 7-25-2009 by DENNIS]

noproblemo2 - 7-25-2009 at 05:59 PM

Quote:

Originally posted by DENNIS
The northern end of Baja won't have stringent enforcement of laws regarding labor between U.S. expats and employers. North Baja allows for the fact that tight labor laws might be enforced in kind in the US. They wont take that chance.

So in Norte these rules/laws do not apply?

[Edited on 7-25-2009 by DENNIS]

DENNIS - 7-25-2009 at 06:07 PM

I didn't say that. Read my post.

labor laws

irenemm - 7-25-2009 at 06:31 PM

the labor laws are the same in the north and the south as the laws are federal. even if you have seguro (social security)
they can still sue you for lots of stuff. try and fire one even if caught stealing your gonna have to pay them off. been ther done that.
the union can come in if you have more than 14 employee and you are pretty much screwed. if you have no money and you need to close your business your employee can get the inventory and sell it so they will be paid all monies owed to them. they have the right to vacation owed to them, profit sharing, christmas bonus, time worked. which is after 28 days are your for life. after 5 days they must have social security. severance pay is either 12 or 15 days pay for every year they worked for you and on that the vacation is added by the yeard they worked also.1st year 6 days 2nd 8, 3rd 10 4th12 up to 14 days with 25 to 30 20 days. with additional bonus for the vacation. if the US had most of these laws most business would have a hard time staying open .have been in business here for 30 years. we never go over 14 employees. we stick with the law it is better than being sued by the worker as I have been many time . they told my husband to keep me out of the business as i have a pretty bad temper. don't like lazy or dumb. so i read this so we can keep our stuff.
good luck if you hire someone. get the contract looked at by a lawyer spend the money be safe.

labor laws

irenemm - 7-25-2009 at 06:33 PM

oh i forgot with the servance pay it is 3 months pay plus the days for the years worked with you

squid - 7-25-2009 at 08:52 PM

o.k., I do understand the issue (I guess). One question remains to me anyway:
You hire the workers > you pay for everything (labor, benefits, Insurance, SS etc)
You hire a general contractor > he pays for everything if the contract says so > and charges you.
What's the difference? Other than you have to pay the general contractors profit on top?
One more issue: No contractor, YOU gotto supervise all workers.
Is a contractor responsible for any mistakes made by his workers (let's say: building a house)
What are the responsibilities of an architect? Just making the plan and that's it, or what? Does it depend on the contract as well?

monoloco - 7-25-2009 at 10:42 PM

If your contractor is the one paying the benefits to the workers don,t just take his word that he has paid them. Ultimately you are the one responsible, if he has not paid they will come back to you no matter what agreement you had with your contractor. They have been known to come back and demand payment long after the job is finished.

osoflojo - 7-25-2009 at 11:16 PM

I cant say what the state of the law is now but in the 90's when I had a small bus, my accountant had a "contract" for employees to sign that waved their rights for employer contribution to SS in exchange for a different pay scale. I have no idea if this is still the case.

JESSE - 7-25-2009 at 11:27 PM

Quote:

Originally posted by irenemm
the labor laws are the same in the north and the south as the laws are federal.

Yes, but judges, people, corruption, vary widely from state to state. It would be unwise to think its the same everywhere.

jls - 7-26-2009 at 10:09 AM

I still don't understand what if it is just a small job being done for you...like putting in a water line, laying some tile, etc. If they are only working for you for a day or a week how do you handle the ss and insurance ?

monoloco - 7-26-2009 at 10:17 AM

If it is something small I don't worry about it too much. You can be on the hook for a lot though if you have a crew building a house or you have a gardener or a maid that work for you over a long period.

squid - 7-26-2009 at 10:25 AM

Quote:

Originally posted by jls
I still don't understand what if it is just a small job being done for you...like putting in a water line, laying some tile, etc. If they are only working for you for a day or a week how do you handle the ss and insurance ?

On a regular base the guy working for you just for a day or two, is employed elsewhere. He might come also for several days or weeks, but then he comes mostly 'after hours'. Which is an indication that he is employed elsewhere. So there is no SS or such things for you to pay.
The issue under this topic is focused on guys working for you as their main job -- as far as I understand this topic.

DianaT - 7-26-2009 at 10:39 AM

Some of my original questions have been answered differently by different people.

Seems to be agreement only on if a person works for you full time or doing a big job, then the ss has to be paid, unless one hires a contractor who is paying the ss.

The questions about small jobs by people not receiving ss elsewhere and small jobs by people receiving ss benefits from a full time employment have more than one answer.

I suspect that some of it is a matter of practice---not necessarily the law.

vandenberg - 7-26-2009 at 10:52 AM

Even if you do business with a contractor who "CLAIMS" that the S.S is taken care off by him, make sure to check with the appropriate office to make sure.
Heard of more then a few folks who, at completion of their project, got stuck for many thousands of dollars in S.S fees. The government is fairly adamant in pursuing this matter and the project owner, usually gringo, is liable.

Dave - 7-26-2009 at 11:03 AM

Quote:

Originally posted by squid
On a regular base the guy working for you just for a day or two, is employed elsewhere. He might come also for several days or weeks, but then he comes mostly 'after hours'. Which is an indication that he is employed elsewhere. So there is no SS or such things for you to pay.

Then you'd better pray he doesn't get injured on the job. :rolleyes:

LB - 7-26-2009 at 11:04 AM

There are cases of "housekeepers" going after their SS. How do you pay SS
for a gardener that comes once a week and your paying in cash?

The Government SS squad is checking on permits acquired from 2004 and up to check that SS was paid and leaving summons on front doors of boarded up houses, giving 6 days to provide proof of payments or a hefty fine. This is from La Paz To Cabo, Gringo or Mexican.

I find it in my best interest to have all my t's crossed. Who knows when my gardener
gets to old to work and finds himself with no SS and reports all his years of
prior work...I'd hate to see the bill. Guess it is another trip to the account
to cover my bases.

We have to pay SS to our household hired help, so why not Mexico. Can't
be to much at 250.00 pesos a day once a week. :saint:

vandenberg - 7-26-2009 at 11:23 AM

We have a gardener who works for us one day, 5 hours, a week. He works for other folks for the rest of the week and we collectively pay his SS for him and his family.
Had domestic help for several years. Same there, once a week for 5 hours. Was almost like one of the family. Donated lots of new clothes, bicicles, bedding and whathaveyou, and after a tearful farewell ( she quit ) was notified by the authorities a few weeks later, that I owed this girl severance pay. I think it amounted to several weeks pay for every year of employment. Amazing !! So, got stuck for $ 400.00. This doesn't take into account all the times she didn't show.
Needless to say I got recruited as assistant housekeeper by a severely aggravated boss. No severance pay for me, and it seems I have a job for life. :biggrin:

[Edited on 7-26-2009 by vandenberg]

jls - 7-26-2009 at 12:11 PM

I worry about this alot but just do not know who to go to about it. The guys always say "no problem", "don't worry" but I do and know that I should pursue this...but how? They want the money now they do not want me to give it to someone else for their future and or medical insurance.

LB - 7-26-2009 at 01:24 PM

I like the idea of going together and collectively paying the SS. There is four of
us. Vandenberg did you use an account?

DianaT - 7-26-2009 at 01:27 PM

Quote:

Originally posted by jls
I worry about this alot but just do not know who to go to about it. The guys always say "no problem", "don't worry" but I do and know that I should pursue this...but how? They want the money now they do not want me to give it to someone else for their future and or medical insurance.

Yes, I just love the no problem and don't worry answers and that is what we hear all the time----so

So for big jobs, while not always the best price we hire the only contractor in town who pays his workers benefits---or at least that is what his workers have told us! Have not seen it in writing. We thought we would be safer that way and it does seem to be safer from the answers here.

For small jobs, we try to hire guys who work full time and have benefits---but does not sound like that is totally safe from the answers here.

We do not have a clue as to how someone would pay for these things in our town and wish we did! If you find out, please let us know.

DianaT - 7-26-2009 at 02:23 PM

Quote:

Originally posted by morgaine7
Here's some info that may be helpful:
http://www.rollybrook.com/employee-pay.htm
Seguro Social showed up at my door one day with a summons to produce evidence of payment for the workers on my construction project. I had to sign that I received it. I explained that my contractor was paying and would provide the information.

Kate

THANKS Kate---that site is quite clear!

Diane

jls - 7-26-2009 at 02:36 PM

Yes, thank you.

Barry A. - 7-26-2009 at 02:40 PM

My Mom and Aunt ( sister's) had a house built in Punta Banda back in about 1975--------

--------they named it "MUCHOS PESOS"

--------they sold it 10 years later, for a big profit.

After reading this thread, I now have some understanding of why they named it that. :no:

Barry

LB - 7-26-2009 at 02:40 PM

Thanks for the link, great information. I still will talk to my accountant.

DianaT - 7-26-2009 at 03:12 PM

Quote:

Originally posted by LB
Thanks for the link, great information. I still will talk to my accountant.

Hope you will ask lots of questions and share that conversation. :yes:

Thanks
Diane

LB - 7-26-2009 at 03:32 PM

will do,, buy wait until I get back to my Baja in November than I will update!!

vandenberg - 7-26-2009 at 06:24 PM

LB check your u2u

UnoMas - 7-26-2009 at 08:19 PM

When I built my house in B.C.S. I had a contractor that was new in the business and was told not to worry about the social security and the federal housing, no problemo! Being in the construction industry in the U.S. I thought better as I knew that an injury would be a major problem and I wanted everyone on my job to be covered, so the contractor and I set up an account and I paid it.
Since the social security comes due every month and the Federal housing is due every other month, and I was not going to be in Mexico when the latter was due, I went to the accountant to settle up to be sure that all dues were paid in advance. A couple months later my neighbor who was also using the same contractor informed me that he was told that I had not paid my last payment and paid it for me, good neighbor. Just so happens that I had a gut feeling that something like this would happen and dropped off a copy of the receipt with my engineer before I left and he was able to establish that all was paid in full. My point is to just Cover your A$$ as best you can when dealing in Mexico. :light:

mtgoat666 - 7-26-2009 at 08:26 PM

Quote:

Originally posted by UnoMas
When I built my house in B.C.S. I had a contractor that was new in the business and was told not to worry about the social security and the federal housing, no problemo! Being in the construction industry in the U.S. I thought better as I knew that an injury would be a major problem and I wanted everyone on my job to be covered, so the contractor and I set up an account and I paid it.
Since the social security comes due every month and the Federal housing is due every other month, and I was not going to be in Mexico when the latter was due, I went to the accountant to settle up to be sure that all dues were paid in advance. A couple months later my neighbor who was also using the same contractor informed me that he was told that I had not paid my last payment and paid it for me, good neighbor. Just so happens that I had a gut feeling that something like this would happen and dropped off a copy of the receipt with my engineer before I left and he was able to establish that all was paid in full. My point is to just Cover your A$$ as best you can when dealing in Mexico. :light:

can't you make contractor provide certified payroll with his invoices. no certification of payroll and taxes paid, no payment!
or keep retainage until you got end of year proof of taxes paid!
sounds like mex needs a contractors licensing board, and bonded contractors :lol:

monoloco - 7-26-2009 at 09:10 PM

Quote:

This is very good information.

UnoMas - 7-26-2009 at 09:13 PM

mtgoat;
You are so far out there! Do you think that all the contractors are going to print you out a statement every month to show your balance :lol:

If you don't like the way the job is going they will just give you that international sign of peace and love and walk, as they are usually paid well in advance, Sounds good but doesn't work

DENNIS - 7-27-2009 at 07:40 AM

Quote:

Originally posted by UnoMas
mtgoat;
You are so far out there! Do you think that all the contractors are going to print you out a statement every month to show your balance :lol:

If you don't like the way the job is going they will just give you that international sign of peace and love and walk, as they are usually paid well in advance, Sounds good but doesn't work

You've got a point but, it puts the owner in a precarious spot. The contractor may agree to pay SS for his workers but, should he neglect to do that, the responsibility will fall on the owner.
The owner must have assurance that the payments are made because he is ultimatly responsible. To ignore that is to leave himself wide open for problems in the future.
It's the ol' rock and the hard place.

bajalou - 7-27-2009 at 08:49 AM

If the contractor is working on more than one project and is paying SS, you still have to make sure the payment is applied to your project. Until you get your Letter of Liberation from SS than all has been paid and is OK, you, the property owner, are the one responsible.

Pescador - 7-27-2009 at 10:04 AM

Geez, and they are wondering why there are not more jobs and opportunities in Mexico. Talk about restrictive practices for the contractor who is either you or someone else.
I had a friend who hired a woman to come once a week to water her trees and shrubs. After a year or so she decided that she was going to have someone else do it since the woman was very irresponsible about coming on a regular basis. That is when the woman doing the watering filed a complaint and was able to get termination, back SS, aguinaldo, and vacation pay.
Sure sounds like a successful "Free Enterprise" situation to me.

monoloco - 7-27-2009 at 12:59 PM

Mexican labor law has definitely put a damper on business creation. After listening for years to the stories of friends who have businesses in Mexico I would not even consider any venture requiring employees unless the profit margin was extremely high.

MitchMan - 7-28-2009 at 01:36 PM

I wonder how the concept of "Burden of Proof" applies here. What if someone bogusly files against you for labor that they did not do? Don't the agencies require some kind of proof of the allegations made by the ostensible "employee".

I get the impression you can't fire someone at will, you can't easily fire someone for poor or even dishonest performance or, for that matter, non-performance.

Also, it sounds to me like the best way to go about having ANYONE do any work for you, whether it is for a fixed short period, for a fixed short period for a specific definable small project, occasional yet few ongoing hours per week, is to have a written contract (well written) signed by the worker. You, as the payer, make sure that you stick to the terms and that the worker sticks to the terms of the contract. Since all the workers must be paid in cash, a well written dated receipt for each and every payment that contains cum-to-date and current payment and balances be required and these records meticulously filed and maintained by the payer. Also, this receipt should contain verbiage that the payee acknowledges that there are no other payments made not reflected in the receipt. The labor contract should also stipulate that the worker agrees to not accept payment UNLESS he gets and signs a receipt for all payments made to him/her.

"Independent contractors" do not require the payer to pay seguro. But, how does the payer prove satisfactorily that the worker was in fact an independent contractor if the payee reports otherwise to the IMSS while asking for severance pay, vacation pay, Christmas bonus, etc.? How does the payer prove that they didn't pay someone certain amounts, since payment is always in cash? The only way I can think of is to structure a receipt as I described above wherein the payee signs and acknowledges that the only payment they ever recieved is reflected in the current and cum-to-date amounts on the receipt.

irenemm - 7-28-2009 at 05:02 PM

mitchman you pretty much right
had a girl steal some stuff from me she confessed on a video it is not legal she won the suit in baja north. ended up paying her equal to 2000. dlls because she counter sued us for slander . we won in san quintin but lost in enseanda lat due to fog by 3 minutes.ensenada is a large county if you win against the employee say in san quintin they have the right to take it to enseanda as that is the county office. if you win in ensenada the employee still has the right to take it to mexicali the state capitol. during this you can not have a lawyer just them as the law looks at it as you being the boss or owner of the business you have lots of money to defend yourself and they do not and you can get a better lawyer then them.
had someone else admit he took something we where told may it easy on your self pay them off now. your trips and time to do this cost.
you can take your contract to the delagado office for witness. it must be in spanish. have another witness mexican sign it also. they do have to prove that they worked for you. we had a contractor do a really poor job have not seen him since the job was done and really don't want to see him again
check out some of the work and some of the people they have worked for. most try to do a really good job for the gingos because they know it needs to be done right to get another job with another gingo. gingos pay better than the mexicans. they want it done faster.
if when you pay them you include all the extra in the daily pay it should state that. if they make a certain amount then you must keep taxes and pay that for them. you can also take your changes too. how did a job and how long will it take.
good luck

rob - 7-29-2009 at 08:40 AM

Quote:

Originally posted by MitchMan
The only way I can think of is to structure a receipt as I described above wherein the payee signs and acknowledges that the only payment they ever recieved is reflected in the current and cum-to-date amounts on the receipt.

. . .and even that will not be sufficient if the employee files against you.

bajalou - 7-29-2009 at 08:50 AM

I was told by some Mexican friends that almost no one will work for the legal minimum wage. If a worker is unsatisfactory, inform them that in the future you will only pay minimum wage. 99.9% will quit. Make sure you've kept up on the SS payments.

DENNIS - 7-29-2009 at 08:52 AM

Never leave to a Mexican worker that which you can do yourself. If you don't know how to do it, buy a freakin' book.

monoloco - 7-29-2009 at 08:58 AM

A lot of people I know will pay a worker the minimum wage with the associated seguro and taxes on the books then pay them the rest of their wages in cash under the table.

MitchMan - 7-29-2009 at 09:12 AM

Dennis, not to be overly fastidious, but I think that an American foreigner can't do their own work, legally. Personally, I have a big block fence all around my baja house and do my own work "out of site". I agree with you, if you can do it yourself, you'll be better off.

Rob, are you implying that there is no way at all to pay these people following the law and still not be protected? If I come to the determination that there is no way on earth by following reasonable and legal procedures and thereby avoid having to pay off these people based on bogus claims and lawsuits (as stated above, you, as the American defendent, can not have a lawyer defend/represent you in Mexican court!), then I will rethink my entire presence in Mexico immediately.

BajaNuts - 7-29-2009 at 09:25 AM

Quote:

Originally posted by MitchMan
Dennis, not to be overly fastidious, but I think that an American foreigner can't do their own work, legally. Personally, I have a big block fence all around my baja house and do my own work "out of site". I agree with you, if you can do it yourself, you'll be better off.

WHAAAAT?!? Why in the world would you not be able to do your own work? Taken to the extreme, then theoretically, you wouldn't even be able to do your own housework, cooking, etc.

I know there's stuff about hiring yourself (as a foreigner) out and getting paid to do work a Mexican can do, you can't take business away from the locals, but not being able to work on your own place? That just doesn't seem possible, even for Mexico.

DENNIS - 7-29-2009 at 09:29 AM

Quote:

Originally posted by MitchMan
Dennis, not to be overly fastidious, but I think that an American foreigner can't do their own work, legally.

Sorry, Mitch, but that's just plain wrong. You can do as you please on your property. Now....if you want to go across the street and build your neighbors fence, you could have a problem. That is if there's a predatory government dip-sht hiding in the bushes.

bajalou - 7-29-2009 at 10:05 AM

You can always work on your own place. Just don't have your neighbor come over to help you. You both will be in trouble if you get caught.

BajaNuts - 7-29-2009 at 10:07 AM

Quote:

Originally posted by bajalou
You can always work on your own place. Just don't have your neighbor come over to help you. You both will be in trouble if you get caught.

Even if it's just a neighbor helping neighbor and no money changes hands?

bajalou - 7-29-2009 at 10:13 AM

Yes - Your own property - that's all anyone can work on.

That said, getting caught is rare. But Immigration does make sweeps through areas from time to time.

[Edited on 7-29-2009 by bajalou]

DENNIS - 7-29-2009 at 10:15 AM

Quote:

Originally posted by BajaNuts
Even if it's just a neighbor helping neighbor and no money changes hands?

Yes...but, to follow that to the letter would be to quit an important part of living. We can't, regardless of these constrictive laws, deny a neighbor or friend a hand when it's time to give one. If that were the case, it would only give me one more reason to believe I made a mistake moving here.

DENNIS - 7-29-2009 at 10:20 AM

Quote:

Originally posted by bajalou

That said, getting caught is rare. But Immigration does make sweeps through areas from time to time.

It probably wouldn't be the random sweep through the neighborhood. It would more likely be the worker down the street who knows he has the power of unqualified accusation who dropped the peso on you. Some areas are worse than others and Lou is right......it doesn't happen often. Not in my area anyway.

MitchMan - 7-29-2009 at 10:29 AM

Thanks Dennis and BajaNuts for the responses.

I thought that you couldn't do your own construction work on your own house because, on a couple of occasions, when talking to Mexicans about doing my own work and construction on my own lots in Loreto, they said that that was not legal and that I could get into trouble and be subject to huge fines unless I secured certain work permits/permissions. One of these people was a well respected Loreto realtor (recently deceased) and the other is a Loreto accountant who has done work for me in the past.

I believed them. But if you guys are right and they are wrong, then I guess I can begin visible construction on that cinder block wall I want around the lots and not experience any repercussions with regard to my doing the labor out in the open.

I wonder if the American owner of a Mexican Corporation (99% ownership interest in the corp) can do construction labor himself out in the open on the baja lots owned by the Mexican corporation so long as there are no other Mexican employees employed by the corp, just the 99% owner wherein the 99% owner doesn't draw a salary?

[Edited on 7-29-2009 by MitchMan]

BajaNuts - 7-29-2009 at 10:31 AM

OK- let's muddy the waters even further.

You are working on your own project on your own property and an American friend comes down on vacation to visit you and does some work. No money changes hands. Are you in trouble for not hiring a Mexican to do the work?

I suppose if anyone ever asks, you could claim they are family.

[Edited on 7-29-2009 by BajaNuts]

DENNIS - 7-29-2009 at 11:02 AM

The law has no restriction for you to work on your property. Your friend isn't you. Neither is your brother.
The authorities arn't there to give you the benefit of any doubt so, the "I didn't pay him" thing won't work.
Just do what you want to do without making a spectacle of it all and you'll be alright. If the police jump out of the bushes and yell at your friend for helping you paint your garage, claim stupidity.

DENNIS - 7-29-2009 at 11:15 AM

Quote:

Originally posted by bajaeng

Instead of firing, it may be easier to frame them for a crime and get them arrested

I hope you're kidding about that. Just when I'm feeling rightously indignant about the predatory labor laws in Mexico, I see this.
What is it? If you can't beat 'em...join 'em?

I know you were kidding.

bajalou - 7-29-2009 at 11:46 AM

Quote:

Originally posted by MitchMan

I wonder if the American owner of a Mexican Corporation (99% ownership interest in the corp) can do construction labor himself out in the open on the baja lots owned by the Mexican corporation so long as there are no other Mexican employees employed by the corp, just the 99% owner wherein the 99% owner doesn't draw a salary?

[Edited on 7-29-2009 by MitchMan]

The work that the owner of a Mex. Corp. can do MUST be specified in the papers filed with Immigration. Had a friend who had a restaurant and had to go back and get permit to cook, original papers said he was a overseer. Whatever you want to do has to be specified.

DENNIS - 7-29-2009 at 12:31 PM

Quote:

Originally posted by bajaeng
of course I'm kidding ... just feeling frustrated ... I have a slug that I need to can, but it will cost me about $7k to do so

Pesos or dollars?
How could he be that far into you? I don't get it.
Anyway, it'll only get worse.

irenemm - 7-29-2009 at 12:36 PM

The best way to get rid of someone is to make changes the the business that they will not like. we had a waitress who took to to labor board 2 times. So I was going to put her into uniform that she would not like she left only had to pay what was due. nothing more.
we have slugs to what is job description? look in labor law book have someone explain it to you if you do not read spanish. if they had taken upon them selfs to do other things that that is part of the job. how long has this person worked for you?
You need to be careful because they will sue you and you could win but still lose

DENNIS - 7-29-2009 at 12:40 PM

Well...there you go, bajaeng. Insist that your gardener or whatever wear nothing more than a jockstrap and a pushup bra. If he complys and likes it, your troubles will have just begun.

irenemm - 7-29-2009 at 12:42 PM

you must supply them if it is a uniform

MitchMan - 7-29-2009 at 12:43 PM

I would think that if there is no reasonable/legal and absolutely effective way to fire a poorly performing employee without the American employer being subject to having to pay the EMPLOYEE off, then there is no hope and it is absolutely unsafe (if not illogical) to have any employees at all. If the employee can always come out ahead and get paid off for resisting his being fired, then there is every incentive for Mexican employees to resist...so they will resist and make legal claims... why not? It's a good "business" decision for him/her and he/she has nothing legally to lose and can and will always come out ahead financially, albeit immoral, illogical and unfair. If this is so, I wouldn't hire anyone that isn't an easily provable typical independent contractor. I wouldn't start a business there in any event. That means that the only thing Mexico is good for is to visit and fish there. That's it.

DENNIS - 7-29-2009 at 12:45 PM

Quote:

Originally posted by MitchMan
That means that the only thing Mexico is good for is to visit and fish there. That's it.

No arguement from me.

irenemm - 7-29-2009 at 12:50 PM

also if they don't do the job that is in the job description you can write up a letter for them to sign have a witness too and take it to the labor board and after three you have more of a right to get rid of them without paying an arm or leg.
theyget 3 months and 12 or 15 days for each year they worked for you plus any vacatin, christmas, and profit sharing due them if you are a business. not a business no profit
good luck

DENNIS - 7-29-2009 at 12:58 PM

One thing I've heard hasen't been brought up here. I didn't see it anyway.
I'm refering to restaurant business because that specifically is what I'll talk about.
If a restaurant owner hires an employee, until thirty days pass by, the employee is not considered permanant and covered by the overly protective laws. They'll hire a waiter and lay him off after less than thirty days or get a written, signed contract that the job has a time limit.
I recently watched a cook almost cause a restaurant to close their doors because he had all of the protections and would come and go as he pleased. He'd walk out in the middle of the dinner hour and if he offered any excuse, the restaurant had no recourse. Couldn't fire him.
Is anybody aware of this? Does it apply to other fields?
Dave....Are you out there? You would know.

MitchMan - 7-29-2009 at 12:58 PM

Since there is no necessity or legal requirement to pay any benefits (severance pay, vacation pay, dick time, Christmas bonus, or other 'seguros') to/for legitimately recognized independent contractors, I wonder if always having a contract (stipulating the work and the fact that they are thereby agreeing to being recognized as an independent contractor in the arrangment) and requiring them to issue you a formal "factura" for each specific job done as spelled out in the contract (let's say for work done on a house or a lot), that that should protect you as the payer or the "dueno" in the contract.

Any thoughts on this?

jls - 7-29-2009 at 01:10 PM

"If you directly hire construction workers to do some repairs or remodeling on your house then you are self-contracting, and you are suppose to register them with IMSS. In reality, for a short job, registration is usually not done. To be sure of avoiding trouble, you should pay the workers by the job rather than by the day or week. That makes them independent contractors -- non-salaried workers -- and exempt from IMSS. (The voluntary rule still applies; so if they ask to be registered, you must do it.)"

This is from the previously noted document.

JESSE - 7-29-2009 at 01:11 PM

Quote:

Originally posted by DENNIS
One thing I've heard hasen't been brought up here. I didn't see it anyway.
I'm refering to restaurant business because that specifically is what I'll talk about.
If a restaurant owner hires an employee, until thirty days pass by, the employee is not considered permanant and covered by the overly protective laws. They'll hire a waiter and lay him off after less than thirty days or get a written, signed contract that the job has a time limit.
I recently watched a cook almost cause a restaurant to close their doors because he had all of the protections and would come and go as he pleased. He'd walk out in the middle of the dinner hour and if he offered any excuse, the restaurant had no recourse. Couldn't fire him.
Is anybody aware of this? Does it apply to other fields?
Dave....Are you out there? You would know.

A permanent contract or contrato, basically means if you want to fire the guy, you have to pay him severance pay and vacations and other stuff. If you want to pay, you can fire him on the spot. There isnt a law that forces you to keep an employee that you don´t want, unless your doing it because he is gay or something like that, then we would get into discrimination but thats something entirely different. Having said that, when you make your employee sign a contract, the contract clearly has to point to his responsabilities, his working hours, his superiors, and the things he is expected to do in case of an emergency. For example, a waiters contract might include a clause that gives you the right to get him to clean the restrooms and wash dishes.

Now, if your employee is not performing well, or he is late, or he leaves work without permission. You start a process of PUTTING IT ON PAPER. That means, if the guy is late, you writte a letter adressed to him, where you warn him that he has been showing up late, and that he needs to be on time according to his contract. This letter is signed by you, two other witnesses, and him. Then you go to Secretaria del Trabajo and simply ask to have the letter filed. In time, if your employee keeps screwing up, more and more letters will pile up, until you have the legal right to get rid of him based on him not fullfilling his part of the contract. or basically, he is not good for the job.

In Mexico, if you want to fire someone on the spot out of nowhere, it will cost you. But if the employee is bad, you can fire him legally for not doing its job, but it takes a little time and patience.

jls - 7-29-2009 at 01:13 PM

The men that work for us always do it by the job and not by salary or day rate. They call themselves contractors....so far all is good. The only problem with a by the job is sometimes it takes a very long time for the job to be done and we have to pony up a fair start up fee keeping our fingers crossed.

DENNIS - 7-29-2009 at 01:24 PM

Quote:

Originally posted by jls
The men that work for us always do it by the job and not by salary or day rate. They call themselves contractors....so far all is good. The only problem with a by the job is sometimes it takes a very long time for the job to be done and we have to pony up a fair start up fee keeping our fingers crossed.

Again, contractor or not, you are responsible to see that Social Security is paid for the workers. All of them including the contractor. It all falls on you. And, unless your passport has an eagle and a snake on the cover, it will fall even harder. You, the owner, cannot pass off the responsibility to anyone else. One complaint from one of the workers and you will know of what I speak.

BajaGringo - 7-29-2009 at 01:25 PM

One important point I haven't seen mentioned here is the value of only working with individual contractors who come with several excellent references from well known and trusted sources. If they need additional help on your job, follow the exact same process and pay for all work per job, not per day/week.

These types of workers know they get good / regular work because of these referrals and are highly unlikely to do anything to lose that source. Typically they will charge a little more because they are good / reliable at their trade / job performance but in my book it pays for itself. Going this route on a long number of projects in Mexico over the years has helped me to avoid any of the problems some of you have had and I have been very satisfied with the work they did.

(Knocking on wood as I post this...)

Cheapest is often more expensive in the long run. I prefer to go with the best referrals...

DENNIS - 7-29-2009 at 01:28 PM

Quote:

Originally posted by JESSE
Having said that, when you make your employee sign a contract, the contract clearly has to point to his responsabilities, his working hours, his superiors, and the things he is expected to do in case of an emergency. For example, a waiters contract might include a clause that gives you the right to get him to clean the restrooms and wash dishes.

Thanks, Jesse. My reference was to an employee who didn't sign a contract. The operator of the business wasn't aware of this detail. He learned.

Dave - 7-29-2009 at 01:32 PM

Quote:

Originally posted by DENNIS
I recently watched a cook almost cause a restaurant to close their doors because he had all of the protections and would come and go as he pleased. He'd walk out in the middle of the dinner hour and if he offered any excuse, the restaurant had no recourse. Couldn't fire him.

If my cook did that, I'd have him out in the parking lot over a cheap charcoal grill in the hot sun... Just standing there. I'd be in the kitchen. The key is not placing yourself in the position where your employees think that they're not expendable.

I've never had a problem getting rid of dead weight. Of course, the best way to get rid of bad employees is to reward the good ones.

JESSE - 7-29-2009 at 01:36 PM

Quote:

Just think about this.

If a worker dies in your property, are you 100% sure the contractor will take all the responsability? because if he doesn't, its your responsability, your life, your money.

DENNIS - 7-29-2009 at 01:48 PM

Quote:

Originally posted by JESSE
In time, if your employee keeps screwing up, more and more letters will pile up, until you have the legal right to get rid of him based on him not fullfilling his part of the contract. or basically, he is not good for the job.

Just curious....mas o menos, how many letters will be in that pile before the hammer drops?

MitchMan - 7-29-2009 at 01:55 PM

We've already established that if you fire an employee and they make a claim, you have to "pay him off" with benefits and maybe a fine. But do you have to pay benefits to someone who has voluntarily quit?

Also, if you don't actually fire him, but he voluntarily stops coming to work AND files a claim against you for firing him, DO YOU STILL HAVE TO PAY BENEFITS and a fine ("pay him off") in spite of your representing that you have not and are not firing him and that his job is still open to him and in fact allow him to come to work to continue to work.

DENNIS - 7-29-2009 at 02:09 PM

Quote:

Originally posted by MitchMan
Also, if you don't actually fire him, but he voluntarily stops coming to work AND files a claim against you for firing him, DO YOU STILL HAVE TO PAY BENEFITS and a fine ("pay him off") in spite of your representing that you have not and are not firing him and that his job is still open to him and in fact allow him to come to work to continue to work.

Jeezo...Who knows? The case which I mentioned, the cook just said he had to leave during more than one shift because his ride was leaving. He, as I would have thought, quit his job. Wrong. Since he gave reason, he was within his rights.
I'm freakin' speechless. All of this defies logic.

JESSE - 7-29-2009 at 02:13 PM

Quote:

Originally posted by DENNIS

Quote:

Just curious....mas o menos, how many letters will be in that pile before the hammer drops?

With 3 you have something to work with, but 4 to 5 is best.

monoloco - 7-29-2009 at 02:20 PM

Quote:

Originally posted by JESSE

Quote:

Just think about this.

If a worker dies in your property, are you 100% sure the contractor will take all the responsability? because if he doesn't, its your responsability, your life, your money.

You are apparently responsible for your workers on the way to and from the job. I know a contractor who's workers were rear ended by a water truck on the way home from work seriously injuring an employee, they went after the contractor for compensation not the driver of the water truck.

JESSE - 7-29-2009 at 02:25 PM

Quote:

Originally posted by MitchMan
We've already established that if you fire an employee and they make a claim, you have to "pay him off" with benefits and maybe a fine. But do you have to pay benefits to someone who has voluntarily quit?

Also, if you don't actually fire him, but he voluntarily stops coming to work AND files a claim against you for firing him, DO YOU STILL HAVE TO PAY BENEFITS and a fine ("pay him off") in spite of your representing that you have not and are not firing him and that his job is still open to him and in fact allow him to come to work to continue to work.

You do have to pay benefits to someone who quits, but not as high as if you fired him.

If he stops coming to work, and files a claim, kiss anywhere from 5,000 to 10,000 pesos goodbye. Conciliacion will summon you and him to a meeting (wich in reality is a reunion for you to offer him money, and him to accept). It doesn´t matter who is right or wrong, because non of the parties want to go to court and potentially end up losing much more.

If an employee stops going to work, inmediately go and file a letter informing the secretaria del trabajo that he stopped going to work. This will protect you from the employee showing up (even months) in the future claiming you fired him, at wich point, you will have to pay him for all of those months.

Finally, you can offer an employee his job back, but i think at this point its not good for anyone involved to keep working togheter. If your at conciliacion, it means pretty much the relationship is over, and at least one of the parties wants out. Why keep an employee that doesn't want to be there?

DENNIS - 7-29-2009 at 02:26 PM

Quote:

Originally posted by JESSE
With 3 you have something to work with, but 4 to 5 is best.

The agencys and which write and enforce these laws are more of a detriment to Mexico than the cartels. I find it unbelievable that law would allow anybody to interfere in the efficienct operation of a business, affecting the income of the owner, demoralizing fellow employees and possibly ruining the reputation of the business itself.
How could the PAN party continue to allow this abuse to employers?
I truly do not understand and never will.

flyfishinPam - 7-29-2009 at 02:27 PM

Quote:

Originally posted by JESSE

Quote:

Excellent advice Jesse, worth paying for!

JESSE - 7-29-2009 at 02:31 PM

Quote:

Originally posted by monoloco

Quote:

Originally posted by JESSE

Quote:

Just think about this.

If a worker dies in your property, are you 100% sure the contractor will take all the responsability? because if he doesn't, its your responsability, your life, your money.

You are responsible if you provide transportation.

flyfishinPam - 7-29-2009 at 02:31 PM

Quote:

Originally posted by JESSE

Quote:

again, excellent advice here too, also worth paying for.

I learned the hard way but I LEARNED. Keep in mind this labor issue is very difficult to swallow to an American (and likely a Canadian) our cultures and our ways are so different and this is one example. Learn the history and you will come to understand why this came about. This is good when starting to compare and judge how things run here.

flyfishinPam - 7-29-2009 at 02:34 PM

Quote:

Originally posted by JESSE

You are responsible if you provide transportation.

I think that's only true for more than the specified distance as per the law, I think that is 3Km but I may be off on that. if this not be the case maybe we can transport our workers in ambulances and on guerneys. :lol:

monoloco - 7-29-2009 at 02:41 PM

Quote:

Originally posted by flyfishinPam

Quote:

Originally posted by JESSE

You are responsible if you provide transportation.

My friends employees were riding with one of the other employees not provided transport.

flyfishinPam - 7-29-2009 at 02:42 PM

Quote:

Originally posted by DENNIS

Quote:

Originally posted by JESSE
With 3 you have something to work with, but 4 to 5 is best.

yeah I can see where you'd have that opinion but read the history of Mexico and you may come to understand how this (and other things) has come about. you need to see the big picture before you judge. I am not saying I disagree with you but when one lives here one needs to deal with the rules that pertain to us so that we can survive and hopefully move forward. It helps to have an understanding and an open mind in order to work through these sets of rules (written and unwritten) and it also helps to keep one's sense of humour as well.

Protect your assets

Dave - 7-29-2009 at 02:50 PM

Quote:

Originally posted by JESSE

If he stops coming to work, and files a claim, kiss anywhere from 5,000 to 10,000 pesos goodbye. Conciliacion will summon you and him to a meeting (wich in reality is a reunion for you to offer him money, and him to accept). It doesn´t matter who is right or wrong, because non of the parties want to go to court and potentially end up losing much more.

All my employees are hired by a shell corporation set up specifically for that purpose. The director general is my attorney. I've had one employee file a claim. It went nowhere.

My employees think they're working for me but in reality they're working for air. :rolleyes:

flyfishinPam - 7-29-2009 at 02:52 PM

Quote:

Originally posted by monoloco

Quote:

Originally posted by flyfishinPam

Quote:

Originally posted by JESSE

You are responsible if you provide transportation.

My friends employees were riding with one of the other employees not provided transport.

maybe I didn´t make myself clear:

if your employee lives more than the specified distance (which I believe is 3KM) then you as an employer must provide transportation.

if during that employee sponsored transportation event, the employee gets into an accident their welfare is the ultimate responsibility of the employer.

if the employee lives less than the specified distance away from the job they must provide for their own transportation.

3Km is a reasonable walking distance so I assume that is why it was chosen. but if in the event of an accident while your employee was traveling to your job on their own accord weather in a vehicle, a bicycle, a moto, or on foot the employer is not necessarily responsible. just to be clear here and not scare the crap outta folks here this stuff is scary enough as it is.

I stated necessarily because I would believe there could be cases where an employee were traveling to a work site and the employer could be responsible, say if yelling at them over a cell phone while in transit or putting undue pressure on them timewise, etc.

JESSE - 7-29-2009 at 02:56 PM

Quote:

Originally posted by Dave

Quote:

Beware Dave, more and more lawyers are getting around this "shield", and there is pending legislation to close this "loophole" in the near future. I used to do this same thing for years, but so many cases like this have failed, that it is no longer a safe protection.

flyfishinPam - 7-29-2009 at 03:06 PM

Quote:

Originally posted by JESSE

Quote:

Originally posted by Dave

Quote:

also it probably depends on where this is done as what would fly up in Rosarito may not fly in La Paz and definately won't fly in Loreto, at least with the budget I have to work with :lol:

some towns have no law or a law of their own.

JESSE - 7-29-2009 at 03:19 PM

It used to work back when it was new and other lawyers didn´t know what to do. But now, i think most good lawyers know that in court, when an employee gets asked. Where do you work? and who gives you orders? then the court will establish that the fuente de trabajo is you, not the corporation that only exists on paper.

Dave - 7-29-2009 at 03:20 PM

Quote:

Originally posted by flyfishinPam

also it probably depends on where this is done as what would fly up in Rosarito may not fly in La Paz and definately won't fly in Loreto, at least with the budget I have to work with :lol:

some towns have no law or a law of their own.

Corporation law is exactly the same in all parts of Mexico. If an employee files claim or wins suit against a corporation with zero assets he/she can go suck eggs.

flyfishinPam - 7-29-2009 at 03:25 PM

Quote:

Originally posted by Dave

Quote:

some towns have no law or a law of their own.

Corporation law is exactly the same in all parts of Mexico. If an employee files claim or wins suit against a corporation with zero assets he/she can go suck eggs.

ummhmmm whatever you say but the reality of the situation is that the arbetraje in your area is going to dictate the outcome and they do not all abide by the written laws like it or not. there are many cases in the town I live in that can prove this. also the employees lawyer can go after the zero asset corp AND the employer as a person can be named in the suit. happened to me and it was a bad setup but the result was that I was ultimately responsible.

JESSE - 7-29-2009 at 03:29 PM

Quote:

Originally posted by Dave

Quote:

some towns have no law or a law of their own.

Corporation law is exactly the same in all parts of Mexico. If an employee files claim or wins suit against a corporation with zero assets he/she can go suck eggs.

Not if the judge rules the fuente de trabajo is you and not the outsourcing corporation during the trial.

It happens quite often these days.

I'm prepared for that, too

Dave - 7-29-2009 at 03:41 PM

Quote:

Originally posted by flyfishinPam
also the employees lawyer can go after the zero asset corp AND the employer as a person can be named in the suit.

You can't squeeze blood out of a stone. Besides, I'm not an employer and my pitbull lawyer can prove it.

Again, it really doesn't matter what judgment is rendered...If you can't collect.

DianaT - 7-29-2009 at 03:43 PM

Boy, this thread has turned into a real education, especially from those of you who have a business. It has been VERY interesting reading.

With all the potentials, we still feel we are often in the gray area at times, and like BajaGringo, we knock on wood A LOT.

One problem in our area is that there are often not a lot of choices and the idea of everything in writing probably will not happen for a very long time.

Thanks for the education.

Diane

JESSE - 7-29-2009 at 03:54 PM

Quote:

Originally posted by Dave

Quote:

Originally posted by flyfishinPam
also the employees lawyer can go after the zero asset corp AND the employer as a person can be named in the suit.

You can't squeeze blood out of a stone. Besides, I'm not an employer and my pitbull lawyer can prove it.

Again, it really doesn't matter what judgment is rendered...If you can't collect.

They can collect the equipment in your business.

No... they can't

Dave - 7-29-2009 at 03:58 PM

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.

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