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  1. #51
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    I have a small business....Dominicans work to get fired it’s there lottery jackpot

    Any smart business owner here that is profitable should liquidate their employees yearly regardless of that employees work ethic as to avoid that big payout of hitting triple 7’s when the time comes.....

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  3. #52
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    This is suppose to protect workers but I hear it has the opposite effect, many businesses sack their employees shortly or after 6 months or before a year out to avoid paying to much of this, how does that help the economy and growth, as soon as someone is learning the job is being laid off.... !? Or if they keep them long term they become out of control and unproductive and trouble makers, because they know it is hard to sack them...

    I don't know the details, but that's what I heard, it just does not make sense to me... ! Sounds like some labor unions running the government and regulation, I didn't think that is what DR government was... (socialist lefty run by unions !)

  4. #53
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    Quote Originally Posted by Uzin View Post
    This is suppose to protect workers but I hear it has the opposite effect, many businesses sack their employees shortly or after 6 months or before a year out to avoid paying to much of this, how does that help the economy and growth, as soon as someone is learning the job is being laid off.... !? Or if they keep them long term they become out of control and unproductive and trouble makers, because they know it is hard to sack them...

    I don't know the details, but that's what I heard, it just does not make sense to me... ! Sounds like some labor unions running the government and regulation, I didn't think that is what DR government was... (socialist lefty run by unions !)
    No, not quite accurate. What oldschool meant, was to pay their severance and begin the employment contract anew for each employee. This prevents an accumulation of excessive severance amounts. However, this is really only practical for a bar with 3 waitresses or a business like the Dollar store or something, where there may be only 4 or 5 employees. At the hotel we had 70 people and many making upwards of 10 to 15K/month. In this case you cannot liquidate yearly or it eats into profit.

  5. #54
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    If a business is keeping an accurate set of accounting ledgers, the current amount for employee severance would be listed as an ongoing liability and automatically subtracted from the income section of the balance sheet. Not recording this fiscal liability does not make it go away and only skews the balance sheet to make it appear that there is more cash profit than there really is.

    It is these types of accounting maneuvers that often get businesses in trouble legally and financially. If it appears on paper that the business has more cash than it really does, every decision based on that information is flawed unless the decision maker remembers to subtract the "real liability amount" from the cash on hand every time they look at that number.

    For businesses that liquidate employees every year, every five years or when an employee is terminated, there should be no effect on the reported profit, as the costs of doing business are supposed to be subtracted before the true profit can be determined (assuming there is no ongoing withholding interested applied to liquidation funds).

    Choosing to liquidate every year may be a smart decision for smaller cash businesses as it ensure that the business doesn't need to keep large reserves of cash allocated for this specific purpose.

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  7. #55
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    Quote Originally Posted by Cdn_Gringo View Post
    If a business is keeping an accurate set of accounting ledgers, the current amount for employee severance would be listed as an ongoing liability and automatically subtracted from the income section of the balance sheet. Not recording this fiscal liability does not make it go away and only skews the balance sheet to make it appear that there is more cash profit than there really is.

    It is these types of accounting maneuvers that often get businesses in trouble legally and financially. If it appears on paper that the business has more cash than it really does, every decision based on that information is flawed unless the decision maker remembers to subtract the "real liability amount" from the cash on hand every time they look at that number.

    For businesses that liquidate employees every year, every five years or when an employee is terminated, there should be no effect on the reported profit, as the costs of doing business are supposed to be subtracted before the true profit can be determined (assuming there is no ongoing withholding interested applied to liquidation funds).

    Choosing to liquidate every year may be a smart decision for smaller cash businesses as it ensure that the business doesn't need to keep large reserves of cash allocated for this specific purpose.
    It's not only a cash thing. By liquidating your employees yearly, they start from the beginning with 3 months probation and wont' accumulate vacation time.

  8. #56
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    Quote Originally Posted by Seamonkey View Post
    It's not only a cash thing. By liquidating your employees yearly, they start from the beginning with 3 months probation and wont' accumulate vacation time.
    Most of the " missionary schools " in Jarabacoa contract teachers for a season, pay the severance and offer them a new contract if they want them back. We don't do this but I understand the reasoning behind it. Employees here for the most part don't give you any notice if they are quitting either. They leave on Friday and say they aren't working for you anymore, leaving you to find a replacement on the weekend or Monday morning.

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  10. #57
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    Quote Originally Posted by Seamonkey View Post
    It's not only a cash thing. By liquidating your employees yearly, they start from the beginning with 3 months probation and wont' accumulate vacation time.
    So under the procedures you describe above, someone could work for you continuously for say 10-20 years yet never officially have more than one year seniority? And be “on probation” for a cumulative total of 5 years out of the 20? And never earn any vacation. Wow!

    What about health insurance and the Dominican version of social security? In the scenario above, would the employee ever be enrolled in either of these plans?

    I know it’s hard being a small business owner in the DR. But I never realized how the employees are really screwed by some of these practices.

    Again.....wow! Tough system.

  11. #58
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    Quote Originally Posted by Timotero View Post
    So under the procedures you describe above, someone could work for you continuously for say 10-20 years yet never officially have more than one year seniority? And be “on probation” for a cumulative total of 5 years out of the 20? And never earn any vacation. Wow!

    What about health insurance and the Dominican version of social security? In the scenario above, would the employee ever be enrolled in either of these plans?

    I know it’s hard being a small business owner in the DR. But I never realized how the employees are really screwed by some of these practices.

    Again.....wow! Tough system.
    Again, those are not 100% "legal" practices. If it was done on a regular basis, there would most likely be a red flag raised. It is also not a practice in normal business corporations, say in the Capital or Santiago, etc. The labor laws here are very much in favor of the employee and they extensive rights and benefits. In disputes that make it to court, the employer seldomly wins. Employers are required by law to to deduct about 5.x% of wages and pay the TSS (social security). Employees also receive 13 months of salary (2x at Christmas owed by Dec 20th, the latest).

    You probably got the wrong impression from some of the posts, but I don't blame you, because every gringo that has 2 or 3 chicas working thinks they're the Cervecería Dominicana or Coca Cola.

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