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85% of Domestic workers shortchanged by employers

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85% of Domestic workers shortchanged by employers

Posted 23/02/2019
Only 15% of employers of  Panama’s domestic workers who earn an average of $400  a month pay the employer's contribution to the Social Security Fund (CSS) .

By not paying insurance premiums, employers as well as offenders, leave the workers unable without the opportunity to receive medical assistance and work benefits, while losing the possibility of having a decent retirement.

Among the workers are foreigners and nationals who came from the provinces to the capital city in search of a better quality of life.

According to the Comptroller General until August 2018, some 75,662 people in Panama were engaged in domestic service cleaning homes washing, ironing, and taking care of children and walking ) the dog(s) They are gardeners and personal drivers.

"Paying the CSS is not a priority issue, “ says the Comptroller .for the domestic worker, unless it is in a delicate situation."

Only 11, 476 pay in coordination with their employee the employer contribution according to data from the CSS, calculated until November last year. This means that 85% of domestic workers do not have medical coverage

These indices are explained, in part, by the dominance of oral contracts for this type of work, the difficulties encountered by the labor inspectorate and the lack of complaint from those affected. Many expats are among the backsliders

Marury Pimentel, who heads the Office of Gender and Equality of Labor Opportunities of the Ministry of Labor (Mitradel), points out that many times domestic workers complain about the few benefits they receive when paying dues to the CSS.

They claim that besides not having a living wage they have to contribute a part of it. "That is not a priority issue for the domestic worker unless it is in a delicate situation. However, to be insured, with the CSS  for any risk or accident, is a benefit for the employee and the employer, "said Pimentel.the spokeswoman of Mitradel.

The percentage of the contribution in the CSS for a household worker is divided as follows: the employer must pay 13.50% of the base salary, of this  12.25% is destined for social insurance and 1.25% for educational insurance, while the worker must pay 11.25% of his base salary, divided by 9.75% for social insurance coverage and 1.5% for educational insurance.

Which means that if a domestic employee earns $ 400 per month, he or she must allocate $45 of the monthly salary to the CSS.

There are also cases in which the employer and the worker agree and declare less in the payment of the employer-employee contribution. "This can be harmful, especially for the worker because at the time of retirement will surely have to continue working because the money earned by this benefit will be minimal," says Pimentel .



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  • 1 month later...

If this is true--and I have no doubt that it is--it is reprehensible. The one thing that is still inexpensive here is labor, so there is no excuse for an employer not fulfilling his obligations to pay social security. Not to pay s.s. is to leave the worker without health insurance and without a livable retirement. Anyone who shirks this responsibility should be ashamed.

It also goes a long way to explain why the s.s. system here seems always to be in crisis. Penalties for not paying, I understand, are substantial. But there are not nearly enough government inspectors and enforcers. But, in Boquete at least, I have found that many employees are fully aware of their rights and are willing to fight for them. And they usually win.

I have a full time gardener who earns $420 a month. But I pay all social security, not just the half I'm obligated to. This is a substantial benefit to him--about $50 a month--and it relieves me of having to address the issue of salary increases on a regular basis.

Graciela's point is also well-taken. Most everyone is aware of a major, lucrative business here in Boquete that routinely hires employees for six months and then lets them go before longterm s.s. obligations kick again. Disgraceful.

Edited by Bonnie
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Evading employer obligations is not something exclusive to Panama.

The practice of using as many 'part time minimum wage' employees as possible in order to avoid paying benefits is well known among businesses such as fast food restaurants in North America.

Edited by Keith Woolford
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