payment of profits to employees

rogerramjet1

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Sep 10, 2015
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Would someone explain this to me properly.
I had heard if you made a profit a % must be shared with the employees...it's mandatory as ordered by the DR government.
Does it apply to casual staff?
Would this be the reason for the service charge many hotel businesses apply to their final bill to the consumer?

cheers
 

Mauricio

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Nov 18, 2002
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No, the service charge is a separate thing. Any company needs to dedicate 10% of its profits as bonus to the employees. There are rules on how to divide it , I'm not sure what they are but you are not obliged to give everybody an equal part, but all employees are supposed to receive something.

The service charge is 10% on sales which restaurants and hotels are supposed to give to the service staff (in contact with customers) every month.
 

rogerramjet1

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Sep 10, 2015
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No, the service charge is a separate thing. Any company needs to dedicate 10% of its profits as bonus to the employees. There are rules on how to divide it , I'm not sure what they are but you are not obliged to give everybody an equal part, but all employees are supposed to receive something.

The service charge is 10% on sales which restaurants and hotels are supposed to give to the service staff (in contact with customers) every month.

Thank you Mauricio
I have a few further questions
Does the profit sharing apply to regularly employed 'casual' staff'
How is the service charge enforced? is it mandatory that i charge it?
Would you say the Dominicans that 'may' work for me are aware that they maybe entitled to this 10% service charge?
I appreciate your input
thx
 

CristoRey

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Apr 1, 2014
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Right, lol. Could you imagine McDonalds giving 10% of its profits to employees every month?
Better yet, one of the large AI?s in Punta Cana? :laugh::laugh::laugh:
 

Mauricio

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Nov 18, 2002
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I think fast food chains have some exemption,, AI resorts is probably a different story, they normally don't charge directly to their customers.

The average restaurant does charge the customer with the 10% and in the majority of the cases the employees receive their part. Does it always go honest, no, often management and owners are included in the distribution which shouldn't, often they deduct any credit card charges from the 10% to be distributed, and there are ofcourse enough cases where no money is distributed but employees in restaurant business know very well what they are entitled to and also know how to make life hard for the owner if he doesn't distribute the 10%.
 

rogerramjet1

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Sep 10, 2015
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I think fast food chains have some exemption,, AI resorts is probably a different story, they normally don't charge directly to their customers.

The average restaurant does charge the customer with the 10% and in the majority of the cases the employees receive their part. Does it always go honest, no, often management and owners are included in the distribution which shouldn't, often they deduct any credit card charges from the 10% to be distributed, and there are ofcourse enough cases where no money is distributed but employees in restaurant business know very well what they are entitled to and also know how to make life hard for the owner if he doesn't distribute the 10%.

I thought so
 
Feb 7, 2007
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Right, lol. Could you imagine McDonalds giving 10% of its profits to employees every month?
Better yet, one of the large AI?s in Punta Cana? :laugh::laugh::laugh:

They actually do. And AIs do not post huge profits anyway, money is invoiced and contracts enforced overseas. Any profit AIs generate locally is mainly attributable to local sales and overages.

And yes employees in AI do get their "porciento" and in some cases it can be quite high.
I know people working in Hard Rock with base pay around 30k (pastry cooks), and they regularly bring in another 15k monthly as "porciento", and in high season even 25k monthly.
 

KateP

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May 28, 2004
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I used to work at the Punta Cana Hotel and would receive a porcentage of the 10% charged.
 

CristoRey

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I used to work at the Punta Cana Hotel and would receive a porcentage of the 10% charged.

Seriously?
Wow! I stand corrected.
I?ve been living here 4 years and I?ve never heard of any company giving 10% of
anything to employees. Does this apply to industries outside of service/ hospitality?
 

KateP

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May 28, 2004
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Seriously?
Wow! I stand corrected.
I?ve been living here 4 years and I?ve never heard of any company giving 10% of
anything to employees. Does this apply to industries outside of service/ hospitality?

Here's the actual law on what applies http://www.ilo.org/dyn/natlex/docs/WEBTEXT/29744/64852/S92DOM01.htm

"Art. 228.- En los hoteles, restaurantes, caf?s, barras y en general, en los establecimientos comerciales donde se expende para su consumo en esos mismos lugares comidas o bebidas, es obligatorio para el empleador agregar un diez por ciento por concepto de propina en las notas o cuentas de los clientes, o de otro modo que satisfaga dicha percepci?n, a fin de ser distribuido ?ntegramente entre los trabajadores que han prestado servicio. "

In hotels, restaurants, cafes, bars, club or casinos and in general in commercial establishments where drink and food is sold and consumed...

Here's an article also that explains it a bit more http://ensegundos.do/2011/10/18/pro...taurantes-debe-ser-entregado-a-los-empleados/
 

Mauricio

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Nov 18, 2002
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Two different things:

10 % of profit applies to all companies to be paid in bonuses to their employees once a year.
10 % of sales applies to restaurants etc (so, in their case it's 10% of each bill to be divided among employees (to be charged separately to the customer, on top of the price of the food AND once a year they have to divide 10% of their profit among all employees as bonus, just like any other company).
 

rogerramjet1

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Sep 10, 2015
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Two different things:

10 % of profit applies to all companies to be paid in bonuses to their employees once a year.
10 % of sales applies to restaurants etc (so, in their case it's 10% of each bill to be divided among employees (to be charged separately to the customer, on top of the price of the food AND once a year they have to divide 10% of their profit among all employees as bonus, just like any other company).

God
Talk about expensive running costs and being able to afford to come to the DR
10% service charge -paid by client
18% itbis to government
10% of profits to staff
All before my running costs and my profits

How do they prove what my profits were for the past year...do i have to open my books for audit to anybody???? or do they rely on a DR employee to say 'noooooooo se ganar muchooooooo' and the next thing i know i have government officials at my 14ft fence. Is this how it goes????
 

rogerramjet1

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Most businesses don't make profits for first 2 years anyways.
How do the employees accept this excuse.???
'we didn't make a profit so there's nothing to share with you'
I bet that goes down real well particularly when they see your lovely bed and breakfast with glimmering pool and gardens and your 4 wheel drive
 

Mauricio

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Nov 18, 2002
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Most businesses don't make profits for first 2 years anyways.
How do the employees accept this excuse.???
'we didn't make a profit so there's nothing to share with you'
I bet that goes down real well particularly when they see your lovely bed and breakfast with glimmering pool and gardens and your 4 wheel drive

That happens often enough: no profit , no bonus. They won't like it, but what can you do. I'd say that in order to be successful its key to have good workers and to keep good workers you should treat them well. When you have profit, be generous in giving bonuses, the employees are the ones making money for you.
 

NALs

Economist by Profession
Jan 20, 2003
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Right, lol. Could you imagine McDonalds giving 10% of its profits to employees every month?
Better yet, one of the large AI?s in Punta Cana? :laugh::laugh::laugh:
Most resorts in Punta Cana actually delcare that they lose money year in, year out.

Yep, the number one destination in the Caribbean with the second busiest airport and an average hotel occupancy rate that is over 75% more often than not is mostly losing money.

Hey, on paper they are, but...

No profit sharing there.

In the mean time, new resorts open every year and the old one's rarely close. What a way to lose money!
 

NALs

Economist by Profession
Jan 20, 2003
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They actually do. And AIs do not post huge profits anyway, money is invoiced and contracts enforced overseas. Any profit AIs generate locally is mainly attributable to local sales and overages.

And yes employees in AI do get their "porciento" and in some cases it can be quite high.
I know people working in Hard Rock with base pay around 30k (pastry cooks), and they regularly bring in another 15k monthly as "porciento", and in high season even 25k monthly.
Aaah... that explains it. I thought the accountants were doing some sort of special and complicated magic to make those hotels seem like money pits that somehow lose money every year but never enough to close the business.
 

NALs

Economist by Profession
Jan 20, 2003
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Seriously?
Wow! I stand corrected.
I?ve been living here 4 years and I?ve never heard of any company giving 10% of
anything to employees. Does this apply to industries outside of service/ hospitality?
Corripio shares profits too and so does Grupo Ramos (Sirenas, Super Pola, Aprezio, etc).

Keep in mind that most businesses are informal and most working people are also informal, and informality often ignores established labor laws.