The trick to keeping severance costs low or non-existent, is to ONLY hire Independent CONTRACTORS to do your labor, thus NO severance is ever due, because they are independent businesses on their own.
Severance pay is always contentious , no matter what country you may be in..In the case of RD , the employer nearly always must pay severance whether the employee hands in his notice or the employer sacks him . Even if there is good reason for the sacking the employer must pay. This is the biggest thorn between employers and employees here in the DR . When a gringo is the employer it is very difficult to get any judge to give judgement for him against a Dominican employee. I have a different view than DS Dad , and my view is that every year the employer must put aside sufficient funds to be able to pay the employees .The severance pay is roughly 21 weeks for an employee with 5 years and 42 weeks for an employee with 10 years . You occasionally hear stories of employees wanting huge payouts, but before firing it is best to go the labour office for the suggested minimum amount and if necessary talk to a lawyer .For an employee earning 20 ,000 per month, ie 5000 per week ,if that employee was to have a severance after 10 years the amount is only 210,000 pesos which is less than $5000. Not much
as Kippling stated.
a employer will always put the severance worth of all his employees aside, it is like part of the salaries, just that you pay the quinzena on the hand of your employee and the other part you have to put aside, on a separate bank account or such. there is nothing bad about it, count quinzenas and liquidation payments together, and those guys and gals are still labouring for very low salaries on their jobs, nothing to complain about.
Tashi Dad,
to use contractors is a easy way to handle such jobs, but it is not necessarily saving money on anything, as your contracted labour/service providers will of course already have the liquidation payments to Their employees providing services to You, calculated in the prices they charge to You for providing their services/Labour.
it always depends what work/service you need and in what ammounts etc etc.
for example myself,
i stopped a couple years ago to have own vehicles and employed drivers for the transfers of my customers to bring them back and forth between the hotels and the marina.
i do it since then only with contracted transfer companies and taxis.
my main reason on costs been not effected by liquidation payments for drivers etc,
but primarily by the fact that i could not occupy those vehicles/drivers 24/7, once my customers are out fishing, vehicle and driver would stand still useless, paid for that all the month, a very unproductive service.
which is better to use, depends on each single service/labour to be conducted, to calculate costs from both variations, to find out which one is the suitable one for each case.
Mike
