Puerto Vallarta, Mexico - Yucalandia, a very useful blog about living in Mexico, just published an article regarding the labor laws for household employees in Mexico. The article was guest authored by Sr. Solomon Freimuth, who, along with his partners at Calderón & Asociados, has fine expertise in Mexican Law, focusing on key issues affecting expats.

Solomon Freimuth and his counterparts have created a very good series of articles on expats rights and responsibilities in Mexico, on Buying Land, on Starting a Business in Mexico, etc on their website, chflawyers.com.

What is an employee?

Mexican labor law says that anyone who performs a subordinated, personal service in exchange for remuneration is an employee. There is a jurisprudencia, or established legal precedent based on decisions of the Mexican Supreme Court, that defines subordination as being at the disposition of the employer during the employee’s shift. Remuneration means to be paid, or in exchange for payment. As a general rule, this means if there is subordination and remuneration, there is an employee-employer relationship and therefore the employee is entitled to certain benefits under Mexican law.

Mexican labor law is notorious for its tendency to protect the laboring class, therefore the scales of justice are somewhat tipped in the employee’s favor. The burden of proof is always on the employer and as with any other legal process in Mexico, a labor trial can drag on for years. Even when the employer wins a labor case, he will have a large expenditures for lawyer and court fees, but if for some reason the court rules for the employee, the employer also ends up paying all the corresponding benefits owed to the employee and all of the employee’s lost wages from the time the labor dispute started.

This strong tendency towards protecting employees creates collateral reasoning that dictates that it is often a financially wiser decision to: give benefits to all employees when in doubt; and settle labor disputes that arise where employees think that they are entitled to a bonus or severance pay, as opposed to letting the case go to court, no matter how justified the employer may feel in his legal rights.

This part warrants clarification: The letter of the law says that all workers are entitled to labor benefits if the elements of remuneration and subordination exist. That is the law. The custom is something different from common practices, since many people get away with not paying their employees all of the benefits mentioned. In some cases it might not be necessary to pay the benefits (if there truly is no element of subordination, for example), but the author wants to reiterate that there is no clear, general distinction that can easily summarize whether or not a worker deserves labor benefits.

Must domestic workers receive the same benefits as regular employees?
The labor law defines a domestic worker as those workers who provide services of: cleaning, home assistance, and anything else within the home of a person of family. The law goes on to state that anyone that who provides these services for a hotel, bar, hospital, school or other like establishment is not a domestic worker, nor are doormen or concierges servicing multi-unit buildings.

The currently valid labor law has a separate chapter that deals with domestic employees, and mentions that some of benefits that they should receive are different than those given to normal employees. This chapter of the law also mentions that domestic employees are not eligible for profit sharing, which is understandable, considering that the family-home should not generate profit.

A major difference in the section of the law for domestic workers is the assumption that a domestic worker may live in the employer’s home, and therefore is entitled to food, boarding, and sufficient break periods to rest and eat. This is all very common sense stuff, but one consideration that the author finds most important is: The employee’s food and board are calculated as having a value of 50% of the employee’s salary, which can be important in terms of benefits such as bonuses and severance packages.

Continuing, domestic employees are entitled to all of the other employee benefits given by the law, even IMSS (medical insurance and pension fund) and INFONAVIT (housing fund). Many employers are accustomed to not giving their domestic help these benefits, but in reality the law requires them for any employee. Notice, the author put emphasis on the word employee, again we can enter into the discussion about whether or not an employee-employer relationship exists.

Here are the author’s opinions, mixed with some examples:

As mentioned above, in strict compliance with the labor law all employees are entitled to labor benefits in Mexico. In the author’s opinion, based on the research done for this article, the distinction can be made as follows:

Employee – In the author’s opinion, a maid or nanny is an employee and therefore is entitled to labor benefits if: the maid/nanny is expected to be at the house from 8:00 am to make breakfast for the kids until 4:00 pm, receives a wage of $1,500.00 pesos per week, and during the aforementioned hours, the maid/nanny is at the beck and call of the Señora of the house.

Non-employee – The gardener who comes twice a week and for $75 pesos cuts the grass and trims the palm trees, in the author’s opinion, is not an employee and is not entitled to labor benefits.

One final aside: Now that we are in the realm of the author’s opinions, if you are not sure, then pay the annual year-end bonus (aguinaldo), or the severance pay, and get a written receipt for every payment. It has become custom in many parts of Mexico to pay a year-end bonus to employees who are not legally entitled to it, and many informal workers expect the bonus because it has become such a recognized tradition. In the interest of improving employee-employer rapport, why not make the domestic help’s lives a little easier at the end of the year and pay them a little bonus?