Annual Holiday Pay
Annual Holiday Pay for Your Workers
Have you ever wondered why the majority of working class Jaltemba Bay doesn’t appear to get into decorating for Christmas until just before the holiday? Or why the local stores don’t offer children’s toys until now? It’s probably due to the fact that the workers need to wait until they receive their Aguinaldo- the mandatory annual cash bonus given to workers before the 20th of December. Mexican Labor law states that the Christmas bonus must be equivalent to at least 15 days wages. The purpose of this pre-holiday pay is to help workers to cover extra expenses, such as presents and additional food that they need for the festivities of December. With the low Mexican daily wage, without the Christmas bonus the worker may not be able to cover holiday expenses for the festivities with just their regular salary.
The law also states this Christmas bonus must be paid by the 20th of December. Because many of us have domestic help on a part-time basis, I recommend that this payment be made by December 15th, because you may not see these employees until after the 20th. For full-time employees that you see every day, the 20th is the deadline. Mark your calendar for the day you need to give your Christmas bonus.
According to a 2005 article in Yucatan, under Mexican law, all employees (including maids, gardeners, cooks) deserve a Christmas bonus. Paying the aguinaldo also creates and keeps a positive relationship with your employees. Article 87 of the Federal Labor Law (LFT) states that “The employer is obliged to keep receipts for payment of the aguinaldo for a one-year period.” So be sure to have the employee sign a receipt for the cash bonus. The aguinaldo payment is mandatory and failure to pay can lead the authorities to impose fines of 3 to 315 times the Legal Daily Minimum Wage in force for the geographic area where the offense has been committed. I do know of one employer who was taken to Mexican court because she refused to give the Christmas bonus; she ended up having to pay a lot more than the cost of the bonus.
If you only have part-time employees it takes a little math to come up with the correct bonus amount. Following the ‘rules’ for 15 days of salary, the calculation is: Take the number of days worked, divide by 365. Next multiply by 15, and then multiply by the daily salary amount. Example: If you pay your maid $160 pesos per day, twice a week:
That’s 52 weeks x 2 days = 104 days/365 = 0.285 x 15 x 160 = $684.00. Whether you round it up to $700 pesos is a personal choice.
Depending on how personal your relationship is with your part-time employees, giving the cash in an envelope with a note thanking the worker for their help/service during the past year and wishing them a Feliz Navidad is a nice way to handle the situation. Some employers I know also include a small gift like Tequila, perfume, candy, or flowers along with the Christmas bonus. I’m listing a couple of Spanish wishes that apply: Que la alegría de ésta Navidad traiga felicidad para todo el año Nuevo. ( May the joy of this Christmas bring happiness for the entire new year.) Enviando deseos de felicidad y alegría para su familia. (Sending wishes of happiness and joy to your family.)
Another Mexican salary issue is the mandatory double pay for employees working on a statutory holiday. In December, Christmas day, followed by New Year’s Day requires additional salary payment. If an employee works on December 25 or January 1, they actually must be paid double time in addition to their regular time, which in effect is triple time. This is true for any statutory holiday throughout the year on which an employee may work. If the day happens to fall on a regularly scheduled work day, and they have the day off, they still must be paid. And again, if they work that day, they get triple time. In the case of most domestic help they typically are not scheduled to work on holidays but you need to be aware of the Mexican statues to avoid creating a labor situation.
Since the very affordable domestic help makes our time in Mexico so comfortable, paying the Christmas bonus is a simple way to show your appreciation and enhance the holidays for local families.