By Ruben Murillo
The post-pandemic business world has left us at least one good lesson: it is definitely possible to get high-level workers in a remote or home-office environment. Needless to say, because of that realization, Mexico has moved on from being a vacation getaway or a retirement choice. It has now become the go-to place to live for tech nomads and families looking for life experiences.
Undoubtedly, more and more international businesses are looking to take advantage of the great pool of bilingual professionals Mexico is able to offer them. Our team has been able to assist in placing many clients in a great variety of jobs. Because of this we have vast experience in assisting our clients with the onboarding process for their new hires. In our experience, businesses should not just make a virtual handshake deal and be content. Why? Although tempting and seemingly simple, there are actually a couple of things to consider to make sure the right process is followed to have the best experience possible.
Today we will share the best ways to hire in Mexico and let you decide what’s right for your business.
Independent Contractor?
An Independent Contractor is someone who works for one client for a set period of time. They usually don’t receive employee benefits packages or pensions and must pay their own taxes according to the law in Mexico or any country they live in. That is why as an Independent Contractor, your paycheck will have no remittances on it, meaning no federal or provincial tax will be withheld from your pay. In the past this could be a negative, but with the new federal tax laws that passed in Mexico it is seen as a benefit for most of the workers in this situation, not to mention receiving the full amount of your salary without any deductions surely has its benefits.
But there are also positives for you as a business if you decide to hire Independent Contractors. First and foremost, you save a lot of money in expenses, payroll, benefits and other typical costs that come with new hires. Also, independent Contractors can be usually brought on as-needed and, if for some reason there is no mutual gain, neither party is obligated to move forward with the contract.
Contracted Employee?
There are a few differences between independent contractors and full-time employees. Employees have the full protection and benefits of the company they are contracted with. They are entitled to employment insurance (EI) benefits or vacation pay. Employers will automatically deduct EI, vacation pay, and CPP from employee’s checks so they don’t have to worry about it. In fact, employers who fail to deduct the correct amounts have to pay both the employer’s share and the employee’s share of contributions owing when tax season comes around.
On top of this, depending on the type of business and contract you receive. For example, it is common in Mexico for some companies to offer food and gas vouchers to their employees. Also, different types of performance bonuses, incentives and the well-known Christmas bonus are all a common part of a normal employee benefit package.
The challenge for many companies is they don’t have a legal entity in Mexico or other Latin American country and hiring an independent contractor is the only way to hire.
Need help deciding?
Considering this, you might be wondering how to sort the best legal contract for you. Of course, at the end of the day it is always your decision. In most cases your own Human Resources and Accounting departments can assist you in this. However, if you are considering Outsourcing to Mexico or other Latin-American countries, there is a service called “Employer of Record” (EOR) that can save you a lot of problems in the long run. An EOR is a company that hires and pays an employee on behalf of another company, and in this case, provides services to international companies. An EOR may cost a little more, but it will definitely save time and headaches in this process. Here are some 5 main benefits of using an EOR service:
- Avoid the hustle and expenses of legally establishing your own entity. Many might think that since the USA and Mexico are neighbors, they must share most of the same laws. But that is definitely not the case. SO having an expert take lead to handle your legal matters might actually be the best choice when hiring.
- Being well-informed and kept up-to-date on any changes in Mexico that could affect you. And that is so needed! You have a whole business to run and grow. How often can you just read up on new or updated laws from another country? But having someone who routinely can give you those updates can be a huge help.
- Being able to onboard new workers quickly. This is definitely one of the main advantages. Who wants to wait over a month for a contract? With the right people and process in place you can cut that in half and get everyone making money quicker.
- Protection of Intellectual Properties. We all know that in the U.S. intellectual properties are very well protected. But that might not be so clear in Mexico and other latin-american countries. So protecting your product secrets and even your logo might be something you need help in.
- Reduced paperwork. Let’s just admit: none of us really like to get paperwork done and writing out contracts and logistics of a hire can be a grueling task. There is definitely a plus in having someone take care of all of that for you.
Whatever your hiring needs are, you can rest assured that Ventes can definitely offer you good insight into your options and help you get the best remote professional personnel for your business. In our many years in service we definitely understand the benefits of these two different types of hires, and would be glad to help your business reach the next level while helping you save money in the process. If you are a business owner and have more questions, please don’t hesitate to contact us at partners@ventesmexico.com Also, please feel free to leave comments or questions below.
This blog was written by the staff at Ventes Mexico LLC Ventes Mexico is a top-rated outsource recruitment firm located in Puerto Vallarta, Mexico. Founded by an American, with 16 years living in Mexico, Ventes Mexico operates in the USA and Mexico. The company specialized in remote staffing and headhunting. Each of its employees are 100% bilingual (English/Spanish).
