Labor laws across the world

[D'kian]

I'll begin by outlining the "benefits" private sector employers are forced to pay their employess in Mexico.

1) Seventh day pay. The law limits working hours to forty eight per week (more below). It works out to 8 hours six days a week. But employers are required to add one sixth of these 48 hours per week to each employee.

2) Overtime. Any hours worked beyond 48 per week are overtime. The first nine such hours are payed double, any subsequent hours are paid triple.

3) Holidays. There is a number of official paid holidays. Employers give employees the day off but pay them for it. If an employee works on a holiday, he gets double pay.

4) Vacation. The law says every employee accrues six days paid vacation on his first year on a job, plus two days for every subsequent year. By law these days ahve to be paid off even if the employee doesn't take a vacation (they al do, of course).

4a) Vacation bonus. I've never understood the reason for this one. In addition to paid vacation days, employers must pay a 25% bonus for those days to each employee.

5) Year-end bonus. this really is a Christmas bonus, but as the state is officially non-religious it can't be called that (there is a very firm wall of separation between church and state here; as I siad, it isn't all bad). By law it has to be at least 15 days pay.

6) Profit share. A portion of a company's profits are set aside to be distributed to the employees. There is a complex formula for determining how much is set aside, and how much each employee gets paid. A company that didn't make ay profit in a given year can forgo the payment.

7) Severance pay. When an employee is fired he gets paid a number of days per year worked as severance pay (I forget how many days per year), naturally at the latest daily salary. He also is owed whatever vacation days haven't been paid for that year as well as the vacation bonus, plus a proportion of the year-end bonus and the profit share. If the employee quits the law says you pay him the same, but in practice when an employee quits the employer will negotiate a severance settlement.

8) Social Security. Each employee gets his salary taxed to pay Social Security, but his employer must contribute a matching amount up to a certain salary level. The Mexican Institute of Social Security (IMSS) provides socialized healthcare. Contributions, both by amployers and employees are mandatory, but using the services is not (most use them since they can't usually afford better). The employer also pays a fixed amount to the IMSS apart from matching funds, determined by several factors.

9) Retirement fund. Until 1995 or so the IMSS also handled private sector pensions. Since then the system changed to individual accoutns under a system known as SAR (meaning savings for retirement). As with IMSS payements, part comes from the employee and part form the employer.

10) Union dues. This doesn't apply to all employers, but it does to all employing more than a dozen people. Employees get charged a percentage of their income as union dues (they don't have to belong to a union, but again most do; in some industries in practice they all do and must). The employer doesn't contribute matching funds, but the union will ask for "donations" from time to time. It's not a good idea to refuse.

11) Disability. This gets paid by the IMSS, but an employer cannot fire a disabled worker while he's deemed disabled (this includes things as sickness and injuries); he can hire a replacement for that period, though.

11 a) Maternity leave. Essentially the same as 11) but it applies only to disability due to childbirth. For now it applies only to women, but there is talk of making it parental leave and giving men some of the smae benefits.

12) Tax handling. Employers are resonsible for calculating and whitholding taxes paid by their employers. Some are also responsible for submitting their employees' tax returns (I'm not sure how that works). the taxes themselves are fiendishly dificult to determine. I know that because I used to handle payrolls in a small company. essentially there are three tiered tables for tax, tax credit and tax subsidy (DON'T ask, please). The computer did it all, sure, but I couldn't tell an employee what her tax should be without running a simualtion int he payroll program.

All of the above applies only to employees on a payroll. It's common for higher salary levels to hire employees as independent professionals who charge an honorarium for their work. I do this, so I know it well. I submit to my employer a receipt twice a month. he pays it, calculates the sales tax I charge (I must charge by law), which is 15%, adds it to the payment, but witholds 2/3 of the tax paid (allegedly to combat tax evasion). He also whitholds 10% of pre-sales tax paid as an income tax retention (also to combat evasion). At the end of the fiscal year (March), he issues me a statement of retentions.

In theory I can demand he also pay Social Security and Retirment pay as well. In theory I should demand it. In practice I don't have to and therefore I don't. I pay private health insurance and arrange for my own retirement savings. In theory, too, I'm entitled to the bonuses outlined above. In practice I do get paid vacation and a year-end bonus because I negotiated that upon hiring (no vacation bonus though).

All this, too, applies only to private sector employees. Those in the state sector, and there are a great many, receive greater benefits, which of course are paid by the private sector. But that's a different topic.