Know the Law in Mexico is written monthly to help the foreign community with issues we see affecting peoples daily lives. The information we provide is simple, informative, and sometimes controversial. Even when it is controversial, we feel the need to inform the public, as we directly see how it is affecting the community.
This month is going to be one of controversy. We need to warn the public of what is happening so you can go forth and make informed decisions. We will not name names, or mention which union or unions are suspect, only to be aware of them. In most cases, unions are in place to protect the employee, to help with labor disputes, health coverage, rights, etc.
One of the services they help provide is IMSS (Mexican health care) to the employee. The employee will have the employer meet with the union to make the arrangements to have the employee covered. The employer will then pay the union for this coverage, and the union in turn will obtain the coverage. In all the cases we have seen, the employer has paid at least $7,500 pesos or more.
Now let’s address this issue. If an employee, such as a maid, has multiple employers, it has been commonplace for the union to charge each employer the full amount mentioned above. To get IMSS coverage for an employee costs $4,431 pesos, which also covers said employee’s family. Multiply this by two, three, or four employers; this can total a hefty amount. IMSS only requires the one fee.
The union will also sign the IMSS papers on the behalf of the employer, stating that they have a contract with IMSS to provide this service. This statement is false. IMSS has no agreements with any union or similar organization. The only agreements can be with an individual or the employer, which makes these contracts the union provides illegal.
If you are faced with a labor dispute, such as needing to pay severance to an employee, the union will also help the employee with this. This, too, involves going to meet with the employee and the union representative at the union office. We have accompanied a number of clients who asked us for assistance to the union office. In every case, the union representatives have asked for too much money, according to the laws governing severance. While asking for this money, they threaten to take the employer to court if they don’t pay the specified amount, scaring some people into blindly paying. When we have confronted them to provide their calculations for these amounts, they have refused to show them to us.
On a few occasions, we have agreed – with the clients’ consent- to pay the full amount, but to pay it in front of a judge for the transaction to be legal, and to thus settle the issue permanently. Again, they refused. Why? Could they be afraid the judge will find out they are charging too much? We are not entirely sure.
Make sure you take care of these matters by making the payment in front of a judge. If not, you may find yourself liable again down the road for the same issue with a different union or the Labor Board.
As a business owner, you will probably at some time be approached by one union or another asking for dues. Even if you or your employees do not want union coverage, they may still try to force you to enlist. Prices? Who knows how they determine this, but they can range anywhere from a $1,000 peso sign up fee, and $100 pesos per month, to much more. If the union is trying to get you to sign up, we suggest doing it, as they can make you life miserable if you do not. In this area of Mexico, there is a union that will sign you up for only $500 pesos a year. They do this so you have a union contract and the other unions will leave you alone. It is all legal, and they don’t actually provide any service other than keeping the others away from your business. Research the area you happen to be in to see if this service is available to you.
All the examples mentioned above are worst case scenarios, but they seem to be happening with an increasing frequency. We urge you to be aware of these facts, and to seek help if someone is trying to take advantage of you. Individuals sometimes try to prey on your fear, threatening you with court and lawsuits.