While the minimum wage in Mexico is about $5 a day (not per hour), employees have a tremendous amount of protection.
Of course, the person needs to know her rights and exercise them. When she does, she tends to prevail.
The document between employer and employee ending the work relationship is called a finiquito. It translates to mean settlement.
Nowadays a finiquito is needed to show at closing when selling a home. This proves that a gardener, housekeeper and the like have been paid what they are owed by the seller of the property.
This final payment takes into consideration vacation, sick and vacation time that most likely was never paid during the time of employment. Most of these domestic workers receive an hourly cash payment without a contract ever being signed.
When someone has worked for years, that final dollar amount can be substantial. And for some gringos (since they are usually the ones doing the hiring), that “bill” can come as a surprise.
A finiquito can even be demanded by a family member of a worker who died, even if the death wasn’t on the job.
According to iclg.com, “Only when the employer rescinds the employment due to the cause of termination stated by the (Mexican Federal Labor Law), it is not obligated to pay the severance. Otherwise, if the employer terminates the labor relationship without reasons for termination, the severance payment will have to be paid. Severance consists of the payment of three months’ integrated salary, plus 20 days of integrated salary per year of service (integrated service is calculated by adding to the salary all benefits and payments earned by the employee), as well as seniority premium.”
Termination for cause is up to the employer to prove.
In May, Mexico’s Congress created more stringent rules to protect domestic workers.
“Hiring a domestic employee will hold the same legal obligations as if you owned a business. The employer will now be required to formalize the employment with a contract, and offer the same rights as any employee in Mexico including a salary based on at least minimum wage, be registered for social security and healthcare, receive holiday bonuses, days off and maternity leave,” according to the MexLaw law firm’s website.
This change has some people in Mexico opting to hire people who work for a company. This way there will never be a finiquito between homeowner and worker because it is up to the business to pay the worker any and all benefits.