Key information

The vast majority of these claims are justified because the employer failed to pay them at the proper time, either through lack of knowledge, because they believed nothing would happen, or because they thought they were doing the employee a favor, often in cases involving a friend. Frequently, prior agreements are made with the employee regarding the amounts to be paid, such as when the employee is given the value of social security so that the employer does not affiliate them with the respective insurers. At the end of the employment relationship, the employee may also be asked to sign a release document in an attempt to support the idea that nothing is owed.

It must be remembered that if agreements between the parties contradict or modify what the law provides, those agreements have no legal effect. In the event of a labor claim, they may be completely disregarded. Labor judges tend to give credibility to what the employee alleges or claims without requiring much effort from the employee to prove it. By contrast, the employer must demonstrate or prove what it wants the judge to consider, which can be very difficult. Therefore, many labor claims are almost always decided in favor of the employee, forcing the employer to pay all unpaid employment claims plus the costs of the proceeding.

Another serious and frequent mistake employers make is failing to prepare written employment contracts, which creates an indefinite-term employment contract. It is also common to terminate verbal contracts on the last day of the year, prepare and pay a settlement for that period, and rehire the employee in the second week of January, believing that this legally ends one contract and begins another. There is also the misuse of an “integral salary” agreement, where an amount higher than the minimum wage is set and it is wrongly assumed that it includes all benefits, so no separate settlements are required.

It should be remembered that for an integral salary contract to exist, it must be in writing and its value may not be lower than $13,000,000 for 2022. Similarly, service provision contracts are frequently used in an attempt to avoid payment of different salary and social security concepts. If you have an employee, give them orders, assign a work schedule and pay them for the service provided, what actually exists is an employment contract, which is easy for the employee to prove. It can be said that under a service provision contract, orders are not given and compliance with a schedule is not required.

As a business owner, you should focus your efforts on developing your company’s operations. We take care of labor advice and the correct calculation of your payroll.

Remember that we treat your accounting matter, situation or problem as our own in order to solve it quickly.

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