Anyone considering company incorporation in Argentina, or who is otherwise planning to do business in Latin America’s third-largest economy, will need to guarantee they are in full compliance with local employment law in order to maximize their chances of success.
Employment law in Argentina is overseen by the Ministry of Labor, Employment, and Social Security, and while there are many similarities between Argentinian employment regulations and those found in other countries, there are also some unique aspects that need to be comprehended.
For anyone in need of a local executive, or who wishes to hire skilled employees on a project-based or short-term basis, a good alternative option to forming an entity is to hire them via a professional employer organization (PEO) in Argentina.
Because, when you hire through a PEO, the service provider will officially be their employer, while those employees will report directly to you. That means you can do business in the country without going through company formation and later liquidation, and also comes with the PEO firm’s guarantee of compliance with local employment regulations.
Below, a basic guide to employment law in Argentina is provided, including information on working hours, contract types, terminations and severance, leave and other absences, and salary-based contributions and deductions that the employer must oversee.
If you would like to find out more about how we can support you with market entry and doing business in Argentina, contact us today.
Table of Contents
Employment law in Argentina: standard working hours
Under employment law in Argentina, a standard working week should be no longer than 48 hours long, with each working day lasting eight hours. All workers are entitled to a break of 35 consecutive hours each week, usually beginning at 13:00 on Saturday unless their role specifically demands weekend hours.
Should an employee work more than 48 hours in a given week, by law they must receive additional pay proportionate to the extra time worked.
Note that in Argentina, there are generally around 15 national holidays that fall on weekdays each calendar year.
Common contracts under employment law in Argentina
While there are many different types of contract allowed under employment law in Argentina, the following five are the most commonly used:
- Indefinite-period contracts are the most common type of contract and only end when both the employer and employee come to a mutual agreement, or when one of the parties has the right to act unilaterally, such as an employee resigning or an employer firing them for misconduct.
- Fixed-term contracts last for a period of time specified by the contract and are generally used for the completion of a particular task or project that has a clear end or completion date. Such a contract cannot last for longer than five years.
- Part-time contracts are provided for roles with limited hours, and anyone on a part-time contract cannot work for more than two-thirds of a standard working week, meaning a maximum of 32 hours per week.
- Temporary employment contracts are only allowed under extraordinary conditions. While the period of the contract does not have to be stated, a temporary contract can only be for a maximum of six months within a 12 month period, or a maximum of 12 months within a three year period.
- Learning contracts are intended for people learning vital skills for a role they will move into on an indefinite contract. As such, they can only be given to people aged between 16 and 28 years old and can only last for between three and 12 months.
Termination and severance
According to employment law in Argentina, an employee is obliged to provide 15 days of notice of their intention to resign from their role. In the event that they provide less notice, the employer can reduce any final payment due, but only if they enter a proper judicial process and prove the untimely departure has caused them pecuniary damages.
When an employer chooses to terminate the employee’s contract without just cause, they must provide a notice period based on the seniority of the staff member, ranging from 15 days when they are still in their probationary period to two months when they have been with the company for more than five years. Employees who have passed their probation but served less than five years must be given one month of notice.
In the event the employer wishes for the employee to vacate their position sooner than the end of the designated notice period, the employee is still due payment for the entire period, as well as an additional payment equal to 15 days of salary.
Any employee who leaves voluntarily or has their contract terminated without just cause is also due the following compensation:
- Payment for all hours worked
- Payment for outstanding vacations
- A proportion of outstanding payments related to the statutory annual bonus (13th salary), based on how much of the year they have worked
In the case of an employee who is dismissed without just cause, they will also be due a seniority bonus based on the length of their service, which will be equal to one month of their highest monthly salary during their period of employment for every year worked.
In the event of dismissal with just cause, such as failure to properly undertake duties or the committing of crime to the detriment of the company, the employer must be able to prove the just cause in a judicial process or will be liable for compensation.
Vacations, leave, and other absences under Argentinian law
Employment law in Argentina establishes that employees who have served at least one year are entitled to consecutive days of paid time off (PTO) per calendar year based on their seniority with the company, calculated as follows:
- 14 days for less than five years of service
- 21 days for more than five but less than 10 years of service
- 28 days for more than 10 years but less than 20 years of service
- 35 days for more than 20 years of service
Employees who are enrolled in high school or higher education are granted two consecutive days of leave for any exam they must sit, with a maximum of 10 days of study leave granted per calendar year.
Maternity and paternity leave
New mothers are granted a total of 90 calendar days of maternity leave, which can begin either 30 or 45 days prior to a due date documented by a certified doctor. In the event of a premature birth, the mother is still guaranteed the full 90 days of leave. For new fathers, two consecutive days of paternity leave are granted.
The maximum period for which an employee can claim remuneration for work missed due to illness or injury depends on their seniority and how many dependents they have. Anyone who has worked for less than five years will be entitled to up to three months of paid sick leave, while those who have worked for more than five years will be entitled to up to six months. In the event the employee has dependents, that allowance is doubled.
Under employment law in Argentina, three days of bereavement leave will be granted in the event of the death of an employee’s spouse, child, or parent, while one day of leave is granted in the event an employee’s sibling dies.
When an employee gets married, 10 days of consecutive days of leave are granted.
Employment law in Argentina: statutory contributions
A total of 17% must be deducted from each employee’s gross salary by the employer, made up of 14% for pension contributions and 3% for health insurance.
Employers must contribute the equivalent of 23.03% of an employee’s gross salary, made up of 17.3% in pension contributions, 4.83% towards health insurance, and 0.9% towards the national employment fund.
Biz Latin Hub can assist you doing business in Argentina
At Biz Latin Hub, we offer market entry support and packages of integrated back-office services tailored to the individual needs of our clients.
That makes us the ideal partner for supporting cross-border operations and facilitating multi-jurisdiction market entry.
We are committed to compliance with regulations everywhere we operate, so working with us comes with the guarantee that your company will adhere to every aspect of employment law in Argentina, or any other country where we assist you.
Contact us today to find out more about how we can support you doing business in Argentina.
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Download our infographic of employment law in Argentina here: