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Hello Folks,

Good evening.

What is "esquema de contratación mixta". I am in a process of recruitment in an IT consulting firm. And they said it contratación mixta. Could you kindly help me understand what is it and pros n cons.

Thanks
Siva Kumar
 

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I just googled it but I'll wait and let someone else answer....
 

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Because I have no personal knowledge of it an this website may be wrong, anyone can do a search.
This is the website I found. It seems legit enough.
Reclu IT

According to this website the down and dirty of the “esquema de contratación mixta” is that a company pays a portion of your wages as your official fixed salary, and the rest is a variable amount made up of other forms of payment, which may be bonuses, fees, etc. The amount of these additional wages may be linked to productivity and earnings of the company.

The advantages of this form of contract for the company is that they only have to declare the base fixed salary portion for payment of social security costs and payroll taxes. Apparently the declared amount will usually be quite minimal, just enough to meet the requirements of labour legislation in terms of minimum wage. So if you earn $10,000 per month, but only $1,000 is declared for social insurance purposes, that means all benefits such as mandatory sick leave, vacation, pension and possibly end of year bonus (el aguinaldo) will be based on the $1,000 declared monthly wage, not the $10,000 you are actually earning. This represents a significant cost savings for the company, but erodes the workers’ benefits and security.

Caveat: I am just translating and summarizing what is on the website, I do not have personal knowledge of this topic.
 

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Caveat: I am just translating and summarizing what is on the website, I do not have personal knowledge of this topic.
Which is exactly why I didn't want to put what I saw because it may just be an opinion and not fact but what the hey.. you be the judge....

The mixed procurement scheme is illegal
The title says it all. If in doubt, read it again: the mixed hiring scheme is illegal . Any company that wants to hire you with this scheme is looking at your face and is abusing you, your time, your rights and your life.

You can read more here if you wish.


https://medium.com/@RecruiterHater/el-esquema-de-contratación-mixta-es-ilegal-ae576a3b3e06
 

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Which is exactly why I didn't want to put what I saw because it may just be an opinion and not fact but what the hey.. you be the judge....
The article I quoted is not an opinion, it is just describing what the “scheme” is, leaving it to the reader to form an opinion about it. I decided to translate and summarize it, as I don’t know how fluent the OP’s Spanish is.

In contrast the article you link is a clearly an opinion about this scheme, one with which I happen to agree on many points based on the information I’ve read so far. It really is about eroding employees’ security while reducing the company’s legal tax and social security obligations.
 

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The article I quoted is not an opinion, it is just describing what the “scheme” is, leaving it to the reader to form an opinion about it. I decided to translate and summarize it, as I don’t know how fluent the OP’s Spanish is.

In contrast the article you link is a clearly an opinion about this scheme, one with which I happen to agree on many points based on the information I’ve read so far. It really is about eroding employees’ security while reducing the company’s legal tax and social security obligations.
I didn't mean your article was an opinion, I mean't the one that I found. It does look like a shady scheme to pay less and get more for the employer. Also creates tax problems for the employee I would think as it would complicate your tax returns.
 

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Which is exactly why I didn't want to put what I saw because it may just be an opinion and not fact but what the hey.. you be the judge....

The mixed procurement scheme is illegal
The title says it all. If in doubt, read it again: the mixed hiring scheme is illegal . Any company that wants to hire you with this scheme is looking at your face and is abusing you, your time, your rights and your life.

You can read more here if you wish.


https://medium.com/@RecruiterHater/el-esquema-de-contratación-mixta-es-ilegal-ae576a3b3e06
Abusive, yes. Illegal? Not clear. After all, abusive, but legal, is not uncommon in labor law. While it is possible that these mixed contracts are illegal in Mexico, I would not conclude that they are, based solely on the claim of someone who has the word "hater" in his name. As Zorro suggested, read with skepticism. I can't find any info on an official government site, but then a lot gets by me, given my haphazard Spanish ability.

What IS clear is that they always benefit the interests of the employer, and not the employee--as others have already said.

.
 

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Abusive, yes. Illegal? Not clear. After all, abusive, but legal, is not uncommon in labor law. While it is possible that these mixed contracts are illegal in Mexico, I would not conclude that they are, based solely on the claim of someone who has the word "hater" in his name. As Zorro suggested, read with skepticism. I can't find any info on an official government site, but then a lot gets by me, given my haphazard Spanish ability.

What IS clear is that they always benefit the interests of the employer, and not the employee--as others have already said.

.
I for one, never understood how an employer can legally pay less than minimum wage because the employee "makes it up in tips." Tips are based on the quality of service, not necessarily the quality of the food or drinks but according to a search...

An employer of a tipped employee is only required to pay $2.13 an hour in direct wages if that amount plus the tips received equals at least the Federal minimum wage, the employee retains all tips and the employee customarily and regularly receives more than $30 a month in tips.
 

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Just weighing in on this because I have a) a little time and b) an opinion (I know; everyone has one and most of them ...)

This type of compensation structure might not be strictly for the employer's benefit. Depending on the employee's situation and other factors related to the employment, it could benefit both. Let me explain.

First, it is very unlikely that the employer is using this to pay less than minimum wage to the employee. It is far more likely that they are paying above minimum wage, even on the stated salary. The stated salary is less than total compensation, but probably not less than minimum wage so the tax burden is reduced. And, assuming that the tax burden would be shared by employee and employer, then the reduction benefits both.

From the standpoint of healthcare, there is likely no difference between paying Seguro Social on $5,000 of income per month or on $15,000; the facilities, doctors, medicines, etc. will all be the same. The only real difference I can see would be in retirement. Someone declaring and paying Seguro Social on $5,000 per month will obviously have less in retirement than someone paying taxes on $15,000. However, this would only matter to someone who is planning to retire in Mexico based on what Seguro Social pays in retirement.

I have no clue as to the legality of such arrangements in Mexico. However, I can see instances where the benefits to such arrangements would accrue to both employer and employee.
 

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Just weighing in on this because I have a) a little time and b) an opinion (I know; everyone has one and most of them ...)

This type of compensation structure might not be strictly for the employer's benefit. Depending on the employee's situation and other factors related to the employment, it could benefit both. Let me explain.

First, it is very unlikely that the employer is using this to pay less than minimum wage to the employee. It is far more likely that they are paying above minimum wage, even on the stated salary. The stated salary is less than total compensation, but probably not less than minimum wage so the tax burden is reduced. And, assuming that the tax burden would be shared by employee and employer, then the reduction benefits both.

From the standpoint of healthcare, there is likely no difference between paying Seguro Social on $5,000 of income per month or on $15,000; the facilities, doctors, medicines, etc. will all be the same. The only real difference I can see would be in retirement. Someone declaring and paying Seguro Social on $5,000 per month will obviously have less in retirement than someone paying taxes on $15,000. However, this would only matter to someone who is planning to retire in Mexico based on what Seguro Social pays in retirement.

I have no clue as to the legality of such arrangements in Mexico. However, I can see instances where the benefits to such arrangements would accrue to both employer and employee.
I know you're trying to be even-handed here, but give me a break. The sole reason that employers hire people on this basis is to save themselves money. Since the OP is not Mexican, maybe they were hoping that he would not be aware of what a lousy employment deal they are offering! Just my opinion, of course!
 

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I use to work for a Mexican government agency. They had a lot of employees that were paid on contract including me. At one point an edict came down that they had to convert all the contract employees to regular employees with benefits. At that point they let some of the contractors go. And I quit because I liked the flexibility I had as a contractor. As an employee, I would have had to fill out some paperwork every time I wanted to be out of the office anytime between 9 and 6 on a given day, even if I worked extra hours at other times to make up for it. It wasn't worth the hassle for me and I was ready to move on anyway.
 

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It does always come down to money, but sometimes employers prefer contract workers because they are cheaper to lay off, not because they are cheaper to retain. In certain (most?) states, companies that lay off a lot of regular full-time employees end up paying higher premiums into the unemployment compensation funds. If a company has a cyclical business that requires staffing up and down regularly with easily-found and easily-replaced workers, it's cheaper in the long run to pay more for those workers per hour worked but be able to drop them more cheaply (and without generating a negative headline about layoffs).

In the US there is also the negative publicity that comes along with employing lots of H1-B visa people. For example, when Microsoft hires a contractor through a contracting company (who applies for the H1-B visa for the imported worker) the headline number of people on H1-B's at Microsoft is reduced. The actual number of people working at Microsoft with H1-B visa's is probably twice the reported number of people working for Microsoft with H1-B visas.

And of course the whole H1-B visa thing is about money too. Facebook is lobbying for open borders so it can even the pay inequality between overseas and domestic workers and pay third-world wages to it's US workers.
 

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Just weighing in on this because I have a) a little time and b) an opinion (I know; everyone has one and most of them ...)

This type of compensation structure might not be strictly for the employer's benefit. Depending on the employee's situation and other factors related to the employment, it could benefit both. Let me explain.

First, it is very unlikely that the employer is using this to pay less than minimum wage to the employee. It is far more likely that they are paying above minimum wage, even on the stated salary. The stated salary is less than total compensation, but probably not less than minimum wage so the tax burden is reduced. And, assuming that the tax burden would be shared by employee and employer, then the reduction benefits both.

From the standpoint of healthcare, there is likely no difference between paying Seguro Social on $5,000 of income per month or on $15,000; the facilities, doctors, medicines, etc. will all be the same. The only real difference I can see would be in retirement. Someone declaring and paying Seguro Social on $5,000 per month will obviously have less in retirement than someone paying taxes on $15,000. However, this would only matter to someone who is planning to retire in Mexico based on what Seguro Social pays in retirement.

I have no clue as to the legality of such arrangements in Mexico. However, I can see instances where the benefits to such arrangements would accrue to both employer and employee.
The article I linked to and translated/summarized was clear that they do pay at least minimum wage, which is a legal requirement. However in terms of negative impact on the worker, it affects more than just their pension, it also affects the amount of vacation pay, end of year “aguinaldo” and the amount of termination pay to which they are entitled if let go.
 

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Esquema mixto means that the company will report a lower salary to the goverment that your actual salary, and they will be saving on taxes. A bonus will complete your actual monthly payment. It is not illegal in Mexico. But it's risky for the employers, as they will have fewer benefits. And even the company can pay you one month less without breaking the contract (as only a fraction of your salary is reported as long as they pay you the reported you can not demand anything more). Stay away from these type of companies, they will often try to make you work longer journeys in order to give you the promised bonus. The esquema mixto is not ideal, but there is people who work with the esquema mixto getting the payment on time and on the agreed quantity. You should try to get more info about the company befroe accepting the job.
 
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