# Local contract or expat package in Mexico



## aleterra (Jan 21, 2015)

Hi All,

I am currently working in Denmark and the company wants to transfer me to Mexico city with the same salary, on local contract. They refuse offering an expat package.
My question is: is this correct? Is Mexico considered Hardship Posting?
I am single and no family to be relocated with.

Please let me know, there is a huge difference between Denmark and Mexico and I think an expat package should be appropriate.

Thanks
BR
aleterra


----------



## Isla Verde (Oct 19, 2011)

aleterra said:


> Hi All,
> 
> I am currently working in Denmark and the company wants to transfer me to Mexico city with the same salary, on local contract. They refuse offering an expat package.
> My question is: is this correct? Is Mexico considered Hardship Posting?
> ...


It sounds like you're not too thrilled to be transferred to Mexico.  I have no idea what constitutes a hardship posting, but I can tell you that I have a much pleasanter life living retired in Mexico than I would have if I were still living in the States, where I'm from. Of course, those expats who work here may have a different point of view!

What is the difference between an expat package and a regular one?


----------



## RVGRINGO (May 16, 2007)

Why would you consider Mexico a hardship? I assume your paycheck will go much further in Mexico, allowing you to save more, or play more.


----------



## sparks (Jun 17, 2007)

Not sure I understand either but your company has to willingly help you get the working Visa required before you even get here


----------



## AlanMexicali (Jun 1, 2011)

I think they mean a job "posting" or position here might it be considered a "hardship." [severe suffering or privation]. "intolerable levels of hardship" , synonyms: privation, deprivation, destitution, poverty, austerity, penury, want, need," 


I would expect that Mexico City will be a thrilling place to be "posted" and working for a company that has the connections to be international and offering you Danish wages. Hardship would be not in the cards as Mexico City has everything and more than many large cities around the World.


----------



## michmex (Jul 15, 2012)

aleterra said:


> Hi All,
> 
> I am currently working in Denmark and the company wants to transfer me to Mexico city with the same salary, on local contract. They refuse offering an expat package.
> My question is: is this correct? Is Mexico considered Hardship Posting?
> ...



The U. S. State Department recognizes a Hardship Differential for most of the major cities in Mexico. Many large USA based multi-nationals utilize this index to base their own "hardship differentials". Denmark is rated a 0% while Mexico City has a 15% differential.

Its definition of hardship:

U.S. Department of State

"A hardship differential is established for any place when, and only when, the place involves extraordinarily difficult living conditions, excessive physical hardship, or notably unhealthful conditions affecting the majority of employees officially stationed or detailed at that place. Living costs are not considered in differential determination."

Here is a link to the current U. S. State Department chart. Previous years can also be found.

U.S. Department of State

The State Department also has other allowances for other categories including cost of living, danger pay, education, living quarters, etc.

U.S. Department of State



My company utilized the State Department info, in part, to determine my compensation while I was working in Mexico City during 1995-1998.


----------



## Isla Verde (Oct 19, 2011)

michmex said:


> The U. S. State Department recognizes a Hardship Differential for most of the major cities in Mexico. Many large USA based multi-nationals utilize this index to base their own "hardship differentials". Denmark is rated a 0% while Mexico City has a 15% differential.
> 
> Its definition of hardship:
> 
> ...


I think the US State Department has a weird idea of what hardship means!


----------



## TundraGreen (Jul 15, 2010)

Isla Verde said:


> I think the US State Department has a weird idea of what hardship means!


"Hardship" is an ambiguous word in this situation.

It is a differential designed to make places with some disadvantages seem attractive so that people will relocate there and fill jobs that need people.

In the case of Mexico, I can see that some people might consider it a disadvantage to work in Mexico. It means your kids will have to go to a school where they don't speak the language. The kids may be behind their classmates when they return to the US, or maybe not, but you don't know. State Department employees live with all kinds of constraints on what they can do in Mexico. While these constraints are designed to protect them, they would be a hardship if I had to live under them. Perhaps the biggest hardship of all living in Mexico is having to tell everyone from anyplace else, that it really is not as dangerous as the news media makes it out to be.

Differentials like this are common. I used to get hazardous differential for days that I had to fly in a helicopter which was common in my job. It was probably earned since I was in one helicopter crash. I have a friend who works for the US Government as a civilian in Afghanistan. He gets a substantial bonus, but I don't know how much it is.

In the case of Mexico, a hardship differential is a nice bonus, given that you are living in a country many choose to live in with no incentive. Also, your US salary plus differential goes a long ways because your expenses are in pesos while your income is in dollars.


----------



## Isla Verde (Oct 19, 2011)

TundraGreen said:


> "Hardship" is an ambiguous word in this situation.
> 
> It is a differential designed to make places with some disadvantages seem attractive so that people will relocate there and fill jobs that need people.
> 
> ...


Will, I appreciate your even-handed response to my one-sentence rant, but I still think that saying that living in Mexico City is a hardship, especially considering how much money foreigners working here for foreign firms earn, even without hardship pay!


----------



## TundraGreen (Jul 15, 2010)

Isla Verde said:


> Will, I appreciate your even-handed response to my one-sentence rant, but I still think that saying that living in Mexico City is a hardship, especially considering how much money foreigners working here for foreign firms earn, even without hardship pay!


I agree with you, but given that Mexico is not being overwhelmed with prospective immigrants, I suspect that it is not on most people's lists as an ideal place to live or work.


----------



## aleterra (Jan 21, 2015)

TundraGreen said:


> I agree with you, but given that Mexico is not being overwhelmed with prospective immigrants, I suspect that it is not on most people's lists as an ideal place to live or work.


Hi All, Thanks for all your answers. 

I understand that Mexico is not Somalia, but it is not Copenhagen either. I also understand that is dangerous and drug related violence is always on the news.

That's why I was expecting an expat package would be offered, because right now they are offering a local contract in Pesos.

cheers


----------



## Meritorious-MasoMenos (Apr 17, 2014)

aleterra said:


> Hi All,
> 
> I am currently working in Denmark and the company wants to transfer me to Mexico city with the same salary, on local contract. They refuse offering an expat package.
> My question is: is this correct? Is Mexico considered Hardship Posting?
> ...


What does a "local contract" mean in Denmark, as opposed to an "expat package?"

I worked for an international company in Mexico City for eight years. A good while ago, but then, an expat package would include transfer costs of your household, but as a single person, you shouldn't be concerned about that. The other major difference was that a "local contract" meant the person was paid in pesos rather than dollars or in your case euros.

I can't believe your company would want to pay you in pesos, and if so, don't take the offer. The peso's been under a bit of pressure recently. Also, i was talking to a Mexican friend last week employed by a German international in DF. He is so glad when he worked out his package, he opted to be paid in dollars instead of euros that they originally offered, as the euro has also slid against the greenback in recent years. That could change, of course, but for now, he's sitting pretty. You could consider that, arguing that the dollar is more acceptable in this hemisphere.


----------



## Meritorious-MasoMenos (Apr 17, 2014)

aleterra said:


> Hi All, Thanks for all your answers.
> 
> I understand that Mexico is not Somalia, but it is not Copenhagen either. I also understand that is dangerous and drug related violence is always on the news.
> 
> ...


Sorry, i didn't see all of your second message confirming that they indeed are offering to pay you in pesos. DON'T TAKE IT.

As i said, the peso has been sliding against the dollar. I've read economists debating whether the peso is in danger of a devaluation. The Mexican gov't is denying that there's any possibility of that, but they've consistently denied that before devaluations.

I've seen economists on Mexican TV saying that, unlike in other devaluations, the Mexican economy is much more dependent upon trade with the U.S. rather than oil exports, and with the U.S. economy doing well, the Mex economy should do well.

Still, to my eye, Mex prices are very high, nearly comparable to what I experienced in 80s and 90s before other devaluations. Those peso drops left employees in my office paid in pesos, both Westerners and Mexicans, in very tough shape compared to those of us, again both Mexicans and internationals, paid in dollars.

It probably won't happen, but in the past, people paid in pesos have seen their salaries cut 30%, 40%, even 50% overnight.


----------



## aleterra (Jan 21, 2015)

Meritorious-MasoMenos said:


> Sorry, i didn't see all of your second message confirming that they indeed are offering to pay you in pesos. DON'T TAKE IT.
> 
> As i said, the peso has been sliding against the dollar. I've read economists debating whether the peso is in danger of a devaluation. The Mexican gov't is denying that there's any possibility of that, but they've consistently denied that before devaluations.
> 
> ...





Hi!

A local contract means that I move to Mexico and I sign a contract as any other Mexican employee, under Mexican law and in pesos.
Expat package means you are still hired in Denmark, under Danish law, and the company has to take care of accommodation costs, transportation, school for your children, etc.

Yes, management is very stingy, and even though it is an international company, they won't offer expat packages.
Sorry, I cannot name the company


----------



## Meritorious-MasoMenos (Apr 17, 2014)

aleterra said:


> Hi!
> 
> A local contract means that I move to Mexico and I sign a contract as any other Mexican employee, under Mexican law and in pesos.
> Expat package means you are still hired in Denmark, under Danish law, and the company has to take care of accommodation costs, transportation, school for your children, etc.
> ...


No need to name the company, aleterra. I never asked that. You have my opinion on the peso package. 

However, since I assume you're a fairly young person, you will have a tremendous experience working and living in Mexico. Forget all the scares about the drug wars. They won't affect you unless your company wants to send you to Guerrero state or a few other choice points.

That peso payment is problematic, though. If they won't bend, I'd say you should get something in writing about keeping that peso salary pegged weekly to the euro.

A young person can afford to take some risks (financially) and the benefits of Mexico should outweigh them, with some protections. Let us know.


----------



## aleterra (Jan 21, 2015)

Meritorious-MasoMenos said:


> No need to name the company, aleterra. I never asked that. You have my opinion on the peso package.
> 
> However, since I assume you're a fairly young person, you will have a tremendous experience working and living in Mexico. Forget all the scares about the drug wars. They won't affect you unless your company wants to send you to Guerrero state or a few other choice points.
> 
> ...


Hey, thanks for the "young" thing 

But I am in my late 30's and with over 10 years of experience so that is not really a reason for me.
I guess I am asking here what I already know. I don't want to go to mexico but if the benefits are excellent then I would go...


----------

