Liquidation Pay

Gumby

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Aug 3, 2005
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Does an employee get paid Liquidation when they quit a job? or only if they are let go or fired?
 

Gumby

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Aug 3, 2005
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Clarification?

I read somewhere that if you give 3 months notice you are entitled. Did I misunderstand? Thank you for your reply.
 

Rocky

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Many companies adopt the practice of paying liquidation to employees if they give advance notice that they are leaving.

I've never heard of 3 months notice, but two weeks is common.
Possibly Gumby is confusing the 3 month minimum work period required, for an employee to be eligible for benefits.
 

Conchman

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The issue of liquidation pay is very problematic for employers, because the laws are so much in favor of the employees. If an employee quits he is only entitled to accrued Christmas and vacation pay. However, many employees will purposely try to get fired in order to get the 'real' liquidation pay which has a formula attached to the number of years worked. The formula can be calculated on a government web site, I don't have link right now but if you're interested you can pm me and I will find it for you. If you don't speak spanish it won't make much sense to you. In any case, when in doubt consult a lawyer, even the directions of the government labor department cannot be trusted since we have followed it before and been sued and lost. To fire someone without liquidation pay is possible but it's not recommended if you either got deep pockets or if you don't know the system - and especially not if you fit into both categories. In Santo Domingo/Santiago its much different then in smaller towns because ususally in the smaller towns the judges/lawyers pretty much decide the cases in back door meetings via payoffs and favors.
 

Fabio J. Guzman

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Rocky is correct. There is no liquidation due to the employee who quits, except vacation pay (if he/she hasn't had his/her vacation) and the proportion owed for the Christmas Bonus.

It is not the Labor Boards which determine whether a firing is justified or not, but the Labor Courts.
 
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Duece

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Mar 11, 2004
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Conchman makes a avery good point. We liquidate everyone with very few exceptions because if you go to court you usually lose. We had a case where the liquidation would have only been $80,000 RD and lost and the judge awarded the employee $450,000 RD. It is just not worth it to try to fight it.
 

MikeFisher

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i disagree.
if the employee takes a 28days preaviso(no 3 months like mentioned above) he is entiteled to the full liquidation.
just jump on the website of the oficina de trabajo and put in the different numbers, each employee and each employer can check that way fast and easy what it has to be.
Mike
 

MikeFisher

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i am not a lawyer Marco, but i run the business with 19 employees at this moment.
checked together with my "contable" around 3 weeks ago for a friend of her's, we requested from the oficina de trabajo in higuey the lump sum for both cases, and got the answer back that with that 28 day preadvise it would be the same than if she got "kicked".
but that's just been a check in one case and not for one of my own employees, so i've not been that hard on details for the case.
my own personel practice is that someone who i have to quit for what ever reason gets what i will be told by the oficina de trabajo.
if someone quits for a good reason, found a good job off the water, secretary who wants to take some time to take care of the house/family aso, in those cases i will pay even up to more than a paper would say, i am within my own small world not in that kind of "Boss-Slave" relationship, a good employee is the one who brought me good money, so keep him happy and he will give you a hand in what ever situation needed even when employed by a competitor at that future moment.
but that's just behavior, no official law.
Mike
 

Fabio J. Guzman

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The Labor Code does NOT provide for liquidation when an employee quits. The only exception is when the employee quits because of the employer's illegal behavior ("dimisi?n"). For details, please see my article on labor law above (in the sticky posts).
 

Conchman

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yeah I wish there were provisions for 'employee's illegal bahavior' - there probably are, its just impossible to prove them whereas the employee never needs to prove his allegations.
 

Fabio J. Guzman

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The Labor Code provides many instances in which an employee may be dismissed with cause by the employer. In such cases, the employer does not have to pay liquidation.

Many times it may not be worth the trouble to try to prove the just cause because legal expenses are higher than the amount to be paid in liquidation.

Also, there is a principle in Dominican Labor Law stating that in case of doubt, the Court will rule in favor of the worker (?n dubio pro operario), meaning that the employer, if he/she wants to terminate an employee without paying liquidation, should have good evidence of the bad behavior before doing so.
 

london777

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Would liquidation be payable to a sole domestic employee working less than a full week, for example a cook/cleaner?

More generally, are only registered businesses liable to pay liquidation, or private individuals too?
 

Rocky

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Would liquidation be payable to a sole domestic employee working less than a full week, for example a cook/cleaner?

More generally, are only registered businesses liable to pay liquidation, or private individuals too?
Unless the law has recently changed, it would not apply to your part time domestic, but private individuals would be as liable as registered businesses.
 

Gumby

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Aug 3, 2005
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Thanks

Thank you everyone for your replies. I have been away but am still confused on this so am going to ask again on this topic as I was wondering if it works the same for foreigners as it does for dominicans? If a foreign worker gives proper notice do they receive some percentage of the liquidation or severance pay? Thanks in advance for any info you can provide!
 

Gumby

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One more thing

It just dawned on me maybe I am asking the wrong question.....When an employee quits with notice what do they get for Cesantia? Is is a precentage per year?