In Mexico, the Federal Labor Law (Ley de Trabajo) is extremely pro-employee, and strict enforcement of labor laws is designed to protect employees. However, there is always more to every story than what it seems to be.
There are instances in which a person hires a housekeeper or gardener, and after showing up once or twice, the employee does not show up for work. The following day, the employer will receive a call from an attorney claiming to represent the employee and explaining that, unless the employer pays the employee three months’ wages and the attorney’s fees, which often run to 30,000 pesos or more. Despite the employer’s claims that he did not fire them, the attorney will explain that Mexico is pro-employee and that, unless they pay now, they will be subject to paying for court fees and much higher legal expenses.
The situation where domestic workers accuse employers of firing them to demand a “separation fee” (severance pay) may involve complex labor law dynamics rather than an outright scam. Mexican labor law is pro-employee and requires employers to provide a complete severance package for terminations without cause, thereby placing a high burden of proof on employers.
Asking for references when hiring an employee only works if the employer has a relationship with the person providing the reference and believes it is legitimate. Be very careful when entering into an employer-employee relationship.
Understanding the Legal Context
- Employee Protections: Mexican labor law operates on the principle of “job stability,” meaning employees have a right to keep their jobs as long as the work is needed. Termination without a legally recognized just cause (such as serious misconduct, violence, or repeated unexcused absences, which must be documented) mandates a significant severance payment.
- Mandatory Severance Pay: If an employer cannot sufficiently prove a just cause for dismissal in court, the termination is considered unjust, and the employee is entitled to a full severance package. This typically includes three months’ salary, 20 days’ wages for each year of service, and a seniority bonus (after 15 years).
- High Burden of Proof for Employers: Labor courts in Mexico tend to favor employees. If an employer fails to follow strict termination procedures (e.g., providing written notice with specific details and witnesses, or filing with the labor board if the employee refuses the notice), the dismissal is presumed wrongful.
- Domestic Worker Rights: As of 2019, amendments to the Federal Labor Law and Social Security Law grant domestic workers the same rights as other workers, including mandatory social security enrollment and the right to severance pay.
Why the Situation Arises
The “scam” narrative often stems from:
- Informal Arrangements: Historically, many domestic workers were employed without formal contracts or registration with social security (IMSS), making them vulnerable to exploitation and discrimination. The new laws are a significant cultural shift, and many employers and employees may not be fully aware of their rights and obligations.
- Negotiation Tactics: Because the legal penalties for wrongful termination are severe and the burden of proof is high for employers, some employees or their legal representatives may use the threat of a labor lawsuit to negotiate the maximum possible “separation fee” (severance pay) even in cases where the employer felt the termination was justified.
- Misunderstanding of the Law: Employers accustomed to “at-will” employment laws in other countries may be unaware of Mexico’s strong pro-employee laws, leading to shock when a significant payment is demanded.
In essence, workers often demand their legal right to a severance payment when the employer cannot demonstrate proper termination procedures or cause. While there may be instances of individuals exploiting the system, the underlying issue is the strict enforcement of labor laws designed to protect employees in Mexico.
