What are my obligations regarding employee vacation?
What are the benefits of my employees taking vacation time?
What happens if I do not grant vacation time to my employees?
According to the World Policy Analysis Center and the OECD (Organization for Economic Cooperation and Development), Mexico is ranked as the country with the fewest paid vacation days and longest working hours in Latin America, behind Honduras, Paraguay, Argentina, and Costa Rica, which grant between 10 and 14 days of vacation per year.
It is important to remember that, according to various labor philosophies, work dignifies, and this idea has been transmitted from generation to generation. For this reason, some benefits are the result of this activity to which the employee is entitled due to the fact that the employee performs subordinate work for any employer (labor relationship).
As a result of the above-mentioned, on this occasion we will focus on the right to enjoy a period of mandatory rest, called “vacation” or “vacation period” According to the Federal Labor Law “…Art. 76.-Workers who have more than one year of service shall enjoy an annual period of paid vacation, which in no case may be less than six working days, until reaching twelve, for each subsequent year of service. After the fourth year, the vacation period shall increase by two days for every five years of service…”
As we can see, the law urges us to provide this benefit to our employees, in addition to indicating certain details in this matter, such as the following: To grant a vacation bonus, which cannot be less than 25% of the salary corresponding to the vacation period, which must be enjoyed continuously. Therefore, the mentioned period will begin with 6 days in the first year and will be increased by 2 days per year until the fourth year, and then 2 days every two years after the fifth year. One of the most important clarifications is that vacations may not be compensated with remuneration and must be granted within the 6 months following the completion of the year of services rendered.
Now, how could vacations affect my company financially?
When establishing the annual payroll budget, a common mistake is that only the vacation bonus for the current year is considered. In practice, it can be observed that for various reasons some employers do not grant the benefit of vacations to their employees and, when they decide to leave the company, the cost for the payment of vacations not taken increases considerably. Likewise, non-compliance with this obligation may result in fines for the company, ranging from 50 to 5,000 UMAs ($4,811.00 to $481,100.00 Mexican pesos) per employee who has not made use of the benefit. Therefore, complying with the obligations set forth in the law in various matters will allow us to have healthy companies and, in this case, without risk.
But how does the company benefit from employees making use of the corresponding vacation period?
As of 2018, NOM-035 was established, which allows to determine and analyze the psychosocial risk factors at work, which affect the performance of the employees generating stress, this is a major determinant in the low performance of the activity of the same.
The main benefits of using vacation periods are:
Stress reduction. This is because the employee disconnects from the business activity and the multiple tasks and activities done on a daily basis, thus improving their state of health.
In the work environment, the attitudes that the employees present are chained, the state of mind depends on each of the situations we face when we are in constant emotional load produced by work, the emotional response is severely altered and even dominates our ways of interacting with the work group.
Quality of sleep. The recommended average hours of sleep for adults is 8 hours a day, nightly and continuous; however, the lack of disconnection can cause us to take our work home with us and with it the worry of fulfilling our activities, causing a decrease in the quality of sleep and the absence of restorative sleep (REM sleep).
Resolve pending issues. The vacation period allows us to eliminate the blindness of the workshop, so we can be more orderly, structured and we can reach a timely planning of daily activities and even anticipate emergency reactions.
In conclusion, the company will benefit financially by keeping the payroll budget updated (without any debts for legal entitlements), which will improve the performance and productivity of its employees, keeping them fresh and rested by minimizing the job shop blindness effect and increasing the emotional salary of its employees by making them feel valued and taken into consideration.
Maintaining a balanced expense without leaving the annual payroll budget and reducing the risk of high costs at the time of terminating the employment relationship with the employees are just some of the benefits that the company can receive by allowing the payroll specialists of Terán Rojas & Associates to take charge of this activity, in addition to optimizing time by focusing on the development of the business. If you have questions about this or other topics related to payroll or human capital management.
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Published on May 02nd, 2022.
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