BajaNomad

Hired help question? No photos.

BigOly - 1-13-2014 at 03:35 PM

We have a general maintenance guy that has worked for us for 9 years. He takes care of the pool, some landscaping, etc. We have a contract that states wages and terms on a year to year basis. Somebody, (my bookkeeper) says this contract may not be enough to protect us from a claim by our "friend" the gardener. She says if we have to let him go we may be liable for a years wages and maybe more. We don't pay his social security or anything like that and the contract states he is responsible for his taxes, etc. What do you think?

monoloco - 1-13-2014 at 03:41 PM

Sounds like you should consult with an attorney.

DavidE - 1-13-2014 at 05:02 PM

As far as gobernacion is concerned contracts are useful to start fires and wipe noses.

Full time employees are entitled to vacation with pay, holidays, aqualinaldos (Christmas Bonuses) healthcare are virtually endless unemployment insurance payments should he sever employment. There are also heavy fines.

You need a Good attorney. An attorney with the least amount of lechery in his heart and a specialist in this field.

Good luck

monoloco - 1-13-2014 at 05:32 PM

I would recommend these folks, I've known Alba almost 20 years and she is professional, reasonable, and a pleasure to work with.

http://www.thepaperchase.com.mx

BAJA.DESERT.RAT - 1-13-2014 at 05:58 PM

Hola BigOly,

a friend of mine hired a guy to look after his palapa and grounds while he was away for about six months or so. when he came back, the worker didn't do anything in his absence so he just fired him.

his worker went to the authorities and my friend was ordered to pay the worker $ 400.00 U.S.

GO FIGURE !

my accountant told me there is a way around getting stuck in the future was to use a service called " outsourcing ". basically, it's an employment agency and they pay all the fees required by the gov't. and are the employer.

mexico is not employer friendly.

BIEN SALUD,

DA RAT

Dave - 1-13-2014 at 07:54 PM

Quote:
Originally posted by BAJA.DESERT.RAT
my accountant told me there is a way around getting stuck in the future was to use a service called " outsourcing ". basically, it's an employment agency and they pay all the fees required by the gov't. and are the employer.


It doesn't matter. The actual employer is the responible party. Arbitration boards and courts have consistently ruled against using subcontractors to sidestep the employer/employee relationship.

Additionally and regardless of contract stipulation, In Mexico, the employer is ultimately responsible as the guarantor for an employee's IMSS, taxes and other benefits.

Brinloor - 1-13-2014 at 08:06 PM

A less expensive option might be to hire a professional accountant. They work daily hands on with the ins and outs of employment law and might be able to wiggle you into the system legitimately, without the excessive cost of a lawyer. There is a difference, even in Mexico, between a bookkeeper and a professional accountant, even though I don't believe the Spanish language differentiates. U2U me if you would like a name in La Paz.

Well It Just Depends

Gypsy Jan - 1-13-2014 at 08:43 PM

We were sued by a casual labor worker for IMSS reimbursement recently.

He lost.

Also, we are going after him for stealing tools and equipment including car batteries and many much other other stuff in our house including my jewelery that we are still trying to make a list from our insurance register.

bledito - 1-14-2014 at 06:04 PM

why not just pay the tax. Does anyone have input on how to pay, where to go, and the rate,or amount required per dollar in wages to be paid as taxes ?

good questions

akshadow - 1-14-2014 at 06:58 PM

Quote:
Originally posted by bledito
why not just pay the tax. Does anyone have input on how to pay, where to go, and the rate,or amount required per dollar in wages to be paid as taxes ?

RnR - 1-14-2014 at 10:11 PM

Quote:
Originally posted by bledito
why not just pay the tax. Does anyone have input on how to pay, where to go, and the rate,or amount required per dollar in wages to be paid as taxes ?


This is my experience with hiring workers directly:

The overall tax rate is about 30% of the workers' wages.

There are three taxes: IMSS paid monthly, RCV and Infonavit paid bi-monthly. All due by the 17th of the following month.

In La Paz, you have to initially sign up in the three individual offices. You can pay at any bank.

I hired an accountant to set up the accounts, shepherd me thru the initial sign-ups, set up the workers' employment/termination contracts and final release of claims, print payrolls, calculate the required taxes, and make the monthly payments. (Well worth the $50 fee/month.!!!)

PS. - You really do not want to be an employer in Mexico!

Brinloor - 1-14-2014 at 11:50 PM

PS. - You really do not want to be an employer in Mexico!

I second that 100%

mtgoat666 - 1-14-2014 at 11:59 PM

Quote:
Originally posted by Brinloor
PS. - You really do not want to be an employer in Mexico!

I second that 100%


So nomad advice is to avoid being an employer. Well, somebody has to be an employer. Everyone can't be retired, worker bee, or on the dole; or can they?

bajario - 1-15-2014 at 06:25 AM

If they are a contractor (is there such a thing in Baja?) wouldn't they be responsible for there own SS and such? Similar to the US of A?

Bob and Susan - 1-15-2014 at 06:31 AM

everyone should read this...
http://rollybrook.com/employee-pay.htm


not only do you pay social security and medical
i also pay a fee to the governor each month for having an employee

then there's holidays and vacation and xmas bonus

there's a lot to consider when hiring an employee


[Edited on 1-15-2014 by Bob and Susan]

RnR - 1-15-2014 at 08:39 AM

Quote:
Originally posted by bajario
If they are a contractor (is there such a thing in Baja?) wouldn't they be responsible for there own SS and such? Similar to the US of A?


Depends.

If they are truly an independent contractor, and without employees, they should be responsible for paying their taxes. (yeah, right)

But, they have to be a true independent contractor.

That typically means that there is a pre-defined scope of work, they complete the work without guidance from the homeowner, and they are paid the full contract price at the completion of the work. (Think - a painter)

A gardener/maintenance worker does not usually work this way. They show up, ask the homeowner "what do you want me to do today?", follow the homeowners guidance and supervision, and receive their pay.

The law usually defines this as an "employer/employee relationship", not as an "owner/contractor relationship".

If you truly want to know the law, get a copy of the book "La Ley de Trabajo". It is a small paperback with a green cover published by, I believe, the Mexican Labor Ministry. It is very clearly written and makes for some very interesting reading. I paid about 80 pesos for the copy I have.

Workers

pacsur - 1-15-2014 at 09:35 AM

I have had over 500 workers the last 20 years and I have always asked my attorneys and accountants to let me know what I can do legally concerning employees.
I have had probably 5 ex employees file something with the labor board against me, they all wanted around $10,000 usd, I think I paid out to only one person about $100 usd to settle a case that my accountant said I would win if we actually went to court, you must pay all the benefits to keep from having a problem, and keep signed receipts.
I was taken to the labor board last year by my gardener of 3 years after he walked off the job and said he did not want to work anymore. One week later I was served papers, he was suing me for holidays and year end bonuses, he worked a couple of days a week for an hour or two each day. When I hired him I followed my accountants rules, he worked for others in my neighborhood and told me he was a contractor, I made sure he understood no paid holidays or annual bonus as he was a contractor.
I then contacted my attorney as I vowed to never get bent over again without just cause, the gardener then said he had worked for me for 6 years and 3x the hours he actually worked, my attorney then explained to me the labor laws had changed some to protect workers and that it is very tough to ever win unless you everything paid and documented, the worker wanted $40,000+ pesos, my attorney told me for $10,000p he would go to court and guarantee the worker would not receive 1 peso, or pay him $2,500p to go to court with me and see what happens. I took option 2 on principle(bad decision in Mexico usually) and went to court 2 times, I had my attorney offer $4,000p to get it over with and they took it.
Afterwards I spoke with my attorney at length to find out how to make sure this does not ever happen again as I had done before, the bottom line is only when you receive a legal factura are you not responsible for employee benefits, at least here in Los Cabos.

CaboMagic - 1-15-2014 at 09:43 AM

Disclaimer: My response is based on our 20 yrs experiences in CSL - your situation may and probably will be different.

First suggestion is to forget nearly everything you think you know about what 'employer' 'employee' (definitions) arrangements are in the US or Canada. Mexico's system is designed for employer to be responsible for paying for all the items mentioned in the excellent article referenced by Bob & Susan- and will be held responsible FOREVER for payment - period. And, should you be unable to pay in dollars or pesos, any amount ANY employee is determined by Labor board to be 'due/owed' will be taken from you in whatever asset that means necessary - and that includes your car/s, boat/s, house/s, raw land ..

And, remember too that Mexico's 'judicial system' is not like what you may think of, or know about, from the USA. Deep pockets required. Make that really DEEP pockets.

and another important point - if you terminate someone be prepared to dig deep - deepER- to pay them off - even if they stole ridiculous sums of funds (proven), forged signatures (including signature of a deceased person who had died 2 years prior) on vehicle registrations, and used your business/personal name to buy property for themselves - all proven - and the labor board actually then ruled in their favor. No exaggeration.

I too would be interested in, and appreciate knowing any details Gypsy Jan would care to share.

[Edited on 1-16-2014 by CaboMagic]

jimgrms - 1-15-2014 at 09:54 AM

Reading this make me want to never hire someone in Mexico, very restrictive to me .

monoloco - 1-15-2014 at 10:35 AM

If you have employees in Mexico, they will own you.

BajaBlanca - 1-15-2014 at 11:07 AM

what a nightmare.

BigOly - 1-15-2014 at 11:49 AM

So,,, if I get this right, even if I have a signed contract with my gardener, who works 3 days/week, 3 hours each of those days, I'm in trouble? The contract, in Spanish and English states he takes care of his own taxes. I pay him cash for extra things he does and at xmas, no records. I'm not liking this!

pacsur - 1-15-2014 at 12:22 PM

A contract did not work for me, they have to provide you a factura, which means you pay IVA also.
Workers can also file against you a year after leaving.
I have been liquidating all my workers at the end of every year for 10 years now, I've heard too many stories of big payoffs for long time workers, you have to get signed receipts, as even canceled checks mean nothing.

[Edited on 1-15-2014 by pacsur]

Bob and Susan - 1-15-2014 at 12:28 PM

the ONLY way to get a "FACTURA" is to have an "RFC" number...
and for that you need to run a business and be registered with the "hacienda"

otherwise

you just get a "invoice" and that means very little...it's like a store receipt

vandenberg - 1-15-2014 at 12:42 PM

Had domestic help for 4 years. One day a week for 5 hours.
Paid the X mas bonus and vacation pay.
Had a habit of not showing at least once every 2 months.
Quit voluntary to get a job with more hours.

Even got a kiss when she announced her job change.

Took us to the Labor board and after getting paperwork served,
we decided not to take it any further and paid the $300.00 US. severance.

Besides treating her like family, my wife gave her bedding, bicycles and lots of baby clothes for her pregnant daughter.

Thanks for trying to be civil.



:no::no:

greengoes - 1-15-2014 at 12:55 PM

Quote:
Originally posted by vandenberg
Took us to the Labor board and after getting paperwork served,
we decided not to take it any further and paid the $300.00 US. severance.



It's a slam dunk, they will get it every time. Kinda like Mexican UI.

:lol::lol:

In Answer to Lencho's Question

Gypsy Jan - 1-15-2014 at 12:55 PM

He did work for us on a very irregular and casual basis - we didn't "hire" him. He showed up at our house and asked if we had something for him to do.

This "arrangement" went on for about two-to-three years.

Then he started threatening us and broke into our garage to steal the battery out of my car.

It may not surprise you to find out that his cousins, who killed a local merchant by cutting his throat in order to score a measly $1300 pesos from the cash register, were involved with drugs.

His family was hiding these punks from the authorities and taking care of them.

RnR - 1-15-2014 at 01:23 PM

Quote:
Originally posted by BigOly
So,,, if I get this right, even if I have a signed contract with my gardener, who works 3 days/week, 3 hours each of those days, I'm in trouble? The contract, in Spanish and English states he takes care of his own taxes. I pay him cash for extra things he does and at xmas, no records. I'm not liking this!


In addition to the year end "aguinaldo", there are paid holidays, paid vacation time, and severance pay. Even part time workers are eligible for these payments. The payments are prorated based on the hours worked vs a full time week.

[Edited on 1-16-2014 by RnR]

LancairDriver - 1-15-2014 at 01:25 PM

Follow the letter of the law, you can't cover your burro enough. Good info link from Bob and Susan. Your most trusted employee/helper/friend will throw you under the bus in a heartbeat when they think the chips are down for them for whatever reason. They all know how the system works. The system on both sides of the border is so slanted against the "employer" you are in for a long expensive uphill battle even in the unlikely event that you win.

RnR - 1-15-2014 at 01:29 PM

This thread is also discussing two different topics, albeit related.

What I posted above are some of the labor laws. (From the green book) Or, payments that are made directly to the worker.

The other, original, topic dealt with taxes paid on the workers behalf. These are paid by the employer directly to the government agencies.

The employee can not sue for the taxes, only for his wages and associated payments. The government agencies can sue for the taxes! (Especially if the disgruntled worker tips them off.....)

The government agencies are actually easier to deal with. They tell you what you owe, add on the fines, and present you with a bill. Then you pay it.

The labor claims from the employees involve a court hearing or negotiated settlements and can drag on and on.

[Edited on 1-15-2014 by RnR]

Bob and Susan - 1-15-2014 at 02:38 PM

the work week is NOT 40 hours but 48 hours

Law sets forth a maximum of 48 hours per week as the amount of hours a laborer can work without going overtime

A normal work week is 6 days
There are 3 work shifts
day shift (8 hours)
night shift (7hours) extra pay
mixed shift (7 1/2hours )