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oladulce
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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?
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DENNIS
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| 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.
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Dave
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Whaa?
| 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.
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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. 
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DENNIS
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| 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.
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DENNIS
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Here's another tidbit of pain for you who want to own a business in Mexico:
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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.
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Dave
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Thank God
| 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.
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DENNIS
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| 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.
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vandenberg
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Mood: mellow
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Wonder if Slim sets aside a sufficient amount to satisfy his workers.
Maybe he knows somebody higher up ?
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vandenberg
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Mood: mellow
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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.
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oladulce
Super Nomad
Posts: 1625
Registered: 5-30-2005
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| 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.
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As usual, I can't tell if Dave is kidding or not 
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.
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DENNIS
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Oladulce..........You are tooo trusting. That may hurt you eventually. I hope not.
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MitchMan
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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.
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arrowhead
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| 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?
No soy por ni contra apatía.
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