The Republic of Argentina’s rapidly-developing economy is becoming a magnet for foreign investment and international companies expanding their Global Expansion. Employee Benefits in Argentina are dealt with in the various clauses of the Employment Contracts Law, in conjunction with the Argentine Constitution and other specific laws and decrees. These include the Discriminatory Acts Law, the Protection of Women Law, the Hygiene and Safety at Work Law, legislation regarding Collective Bargaining Agreements (CBAs), trade unions and labour disputes.
Argentina is the third largest economy in Latin America, behind Brazil and Mexico. Natural resources include massive deposits of untapped mineral ores, including the world’s second-largest shale gas reserve and fourth-largest shale oil reserve. There are lithium deposits to capitalize on the growth of electric vehicle development. The economy is seeing growth in pharmaceuticals, biotech, chemicals, renewable energy and manufacturing design alongside an already strong services sector and the traditional strengths of food production and agriculture.
Foreign companies hiring employees in Argentina must operate within this framework of legislation, which provides safeguards and guarantees for the workforce. Minimum guarantees include paid vacations, working hours, termination, sick leave, maternity benefits, etc. Foreign companies’ responsibilities reach beyond simply complying with tax, social security and payroll regulations – although these alone comprise a demanding scenario. Failure to comply with specific regulations applying to benefits and entitlements runs the risk of fines and sanctions. Employers must have a firm grasp of what is guaranteed for their employees, which will affect the employer-employee relationship. This is where Bradford Jacobs points you in the right direction, drawing on over 20 years of experience as a Professional Employer Organisation (PEO) and Employer of Record (EOR). We deal with the complexities while your staff focus on work.
The Law on Employment Contracts is the primary legislation in Argentina governing the relationship between employers and employees. At the same time, the Constitution also provides employment guarantees such as wages, unfair dismissals, equality and the role of trade unions. Employment legislation generally applies nationally, but the 23 provinces and autonomous capital Buenos Aires may apply laws individually through their regional courts and individual judgments.
However, employers must also be aware that Decrees and Collective Bargaining Agreements (CBAs) can vary statutory minimums laid down by initial legislation. Specific acts of legislation include provisions for working hours, discrimination, collective agreements and disputes and employment of women and minors.
* Argentina uses the Peso (ARS) as its currency.
National Minimum Wage: The national minimum increased from ARS 47,850 (EUR 285.62, – USD 293.24) to ARS 51,200 (EUR 305.67 – USD 313.77 on September 1 2022.
Sick Leave and Benefit: Employees receive up to three months of paid sick leave if they have worked for their employer for up to five years, increasing to a maximum of six months after working more than five years. The benefit is 100% of the salary paid by the employer. Entitlement is doubled for workers with dependents. The benefit is paid by employers for the first 15 days, after that from the company’s mandatory insurance. Work-related illness and injury qualify for up to 12 months of leave, with treatment and rehabilitation costs also covered. Medical certificates or examinations are required. Employees unable to return to work after paid leave must be kept on the payroll for up to 12 months but without pay.
Working Hours and Breaks: The Employment Contracts Law restricts working hours to eight per day and a maximum of 48 a week. Exceptions include managers, executives and directors, and those engaged in ‘teamwork’, as long as their average over three weeks does not exceed the limits. Those between 16 and 18 years must not exceed six hours a day or 36 a week and cannot work between 8 pm and 6 am. Under-16s must not be employed. Collective agreements can allow for fewer hours. The Ministry of Labour can fine employers who ignore limits.
Overtime: Under the Employment Contracts Law, employees are free to agree to overtime, which is compulsory only in specified instances, such as in the risk of danger, accidents or imminent force majeure. Employees receive 50% above their regular rate for working on business days; 100% for working after 1 pm on a Saturday or any time on a Sunday. Overtime hours cannot exceed three a day, 30 a month, or 200 in a calendar year. Collective agreements may apply higher overtime rates.
Paid Vacations: Employees’ entitlement to paid holidays depends on how many years they have worked with their employer.
| Years Worked | Entitlement in Calendar Year |
|---|---|
|
Up to 5 |
14 days (after working for six months) |
|
Between 5 and 10 |
21 days |
|
Between 10 and 20 |
28 days |
|
More than 20 |
35 days |
Employers with less than six months of employment receive one day of paid vacation per month. Employers should allow holidays to be taken between October 1 and April 30.
Public Holidays:
Maternity / Paternity / Parental Leave and Benefit: Pregnant employees are entitled to 45 days of maternity leave before the due date and 45 days after the birth, with a minimum of 30 days before the birth. Fathers have two consecutive days of paternity leave; there is no statutory provision for parental leave. Employees receive 100% of their salary as a benefit, paid by the National Administration of Social Security (Nacional de la Seguridad Social, ANSES). If the pre-natal allowance is not fully used due to premature delivery, the balance can be added to the post-natal allowance.
Discrimination: The Argentina Constitution, the Employment Contracts Law and the 1988 Law on Discriminatory Acts give employees protection against harassment and discrimination in the workplace and during recruitment and interview. Discrimination is prohibited on political, religious or other beliefs or opinions; race or nationality; gender; union affiliations or age. Alongside this, the Constitution’s provisions include equal pay for equal work, protection against arbitrary dismissal and equal rights for foreign nationals.
Termination / Severance / Redundancies: All employees are subject to termination laws, but whether dismissals are considered with or without cause will be judged individually.
Severance payments: Employees dismissed without cause receive one month’s salary for each year’s employment (or period exceeding three months) based on their highest monthly payments over the previous 12 months. For employers to avoid statutory severance payments, dismissals must be judged ‘with a cause. All arrangements may vary and are subject to Decrees and Supreme Court judgments and interpretations.
With mass redundancies, employers must notify trade unions and show compliance with the Ministry of Labor’s Preventive Procedure of Companies Crisis. This applies where redundancies affect:
Notice Periods: Employers must give notice of dismissal. Employees receive two months’ notice if they have worked with the employer for more than five years and one month if they have worked less than five years and completed a probationary period; 15 days’ notice applies during the trial period.
Health and Social Insurance: Social welfare in Argentina is administered by the National Administration of Social Security (Nacional de la Seguridad Social, ANSES), which operates under the Ministry of Health and Social Development. ANSES provides health care and benefits for sickness, family, maternity, old age, survivors and disability. Work Risk Insurers cover work-related injury or illness. The wider welfare system also provides for education and unemployment support.
All employers and most workers must contribute to the system. Employers contribute 24%-26.4% of employees’ gross remuneration to funds for pensions, family allowance, unemployment and the social health care plan. Contributions to the unemployment fund, family allowances fund and social services institute for pensioners are grouped at 18%-20.4% of the total depending on the company’s activity. Employers are exempt from contributions on the first ARS 7,003 (€57, US$59) of an employee’s monthly earnings. SMEs employing no more than 25 workers are exempt from the first ARS 10,000 (€82, US$85).
Employees contribute 17% of their gross earnings, 11% to the pension fund and 3% to the social services plan for pensioners and social health care plans. Contributions are capped at a monthly salary of ARS 208,357 (€1,704, US$1,774).
The National Administration of Social Security (Nacional de la Seguridad Social, ANSES) administrates social welfare in Argentina and operates under the Ministry of Health and Social Development. ANSES provides health care and benefits for sickness, family, maternity, old age, survivors and disability, with a work-related injury or illness covered by Work Risk Insurers for the employers.
The health care system comprises public hospitals, the Social Security/Union-run Health Insurance System, private medical insurance (Prepagas) and the Comprehensive Medical Attention Program (PAMI), which is similar to Medicare in the US.
All employers and most workers contribute to the system. Employers contribute 24%-26.4% of employees’ gross remuneration to funds for pensions, family allowance, unemployment and the social health care plan. Contributions to the unemployment fund, family allowances fund and social services institute for pensioners are grouped at 18%-20.4% of the total, depending on the company’s activity. Employers are exempt from contributions on the first ARS 7,003 (EUR 57 – USD 59) of an employee’s monthly earnings. SMEs employing no more than 25 workers are exempt from the first ARS 10,000 (EUR 82 – USD 85).
Employees contribute 17% of their gross earnings, with 11% to the pension fund and 3% each into the social services plan for pensioners and social health care plans. Contributions are capped at a monthly salary of ARS 208,357 (EUR 1,704 – USD 1,774).
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