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. In Argentina, the Labour Contract Law No. 20,744 (“LCL”), Collective Bargaining Agreements (“CBAs”), individual agreements with employees, general internal policies, and workplace customs serve as the primary sources of regulation for labor relations. It is extremely important to ensure compliance with employment law in Argentina.
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. This hire can help your company outsource crucial operations to trusted, local professionals who will mitigate risk and comply with Argentina labor laws.
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 law in Argentina.
All types of workers are protected by the employment law. Below, a basic guide to this 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.
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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. It is also important to note that Argentina labor laws make the distinction between a labour relationship and an independent contractor relationship, not in relation to the length or content of the contract, but to the real nature of the services.
- 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, under employment law in Argentina:
- 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. It is also important to understand that minimum statutory employment terms and conditions are set forth in the legal regulations and applicable CBAs. Labor provisions are of public order, and they apply to all employment contracts whether written or not.
The main issues included, but are not limited to: remuneration; annual vacations and special leaves of absence; holidays and non-working days; daily and weekly working and resting hours; special provisions for women and children; illness; and termination or transfer of a labor contract.
- 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. Both laws are guaranteed under employment law in Argentina.
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.
Frequently Asked Questions about Labor Laws in Argentina
In our experience, these are the common questions and doubtful points of our Clients.
The labor laws in Argentina state that a standard working week should not exceed 48 hours, with each working day lasting eight hours. Additionally, all workers are entitled to a break of 35 consecutive hours each week, typically starting at 13:00 on Saturday, unless their job requires them to work on weekends.
The working conditions in Argentina are regulated by law to ensure the well-being of workers. According to Argentine law, workers are not allowed to work more than eight hours in a day or 48 hours in a week. On average, the workweek in Argentina consists of 45 hours, which includes five hours on Saturdays. Additionally, night work is defined as work between 9 p.m. and 6 a.m., and employees working at night are restricted from working more than seven hours within a 24-hour period.
Workers in Argentina are prohibited by law from working more than eight hours in a day or 48 hours in a week. On average, a workweek in Argentina consists of 45 hours, which includes five hours on Saturdays. Additionally, employees who work at night, between 9 p.m. and 6 a.m., are limited to a maximum of seven hours within a 24-hour period.
The minimum salary in Argentina is currently ARS112,500.00 per month as of August 1, 2023.
Employees in Argentina are entitled to receive 150% of their regular pay for working overtime. On holidays, Sundays, and their normal rest days, this rate increases to 200%. However, there are limitations on the amount of overtime that can be worked. It should not exceed three hours per day, 30 hours per month, or 200 hours per year.
When terminating an employee in Argentina, the employer must follow certain laws. This includes providing written notice of the dismissal through a notary public or certified letter. If the termination is due to cause, the employer must also inform the employee in writing about the allegations that led to the dismissal.
When terminating an employee in Argentina, the employer must follow certain requirements. These include providing written notice of the dismissal through a notary public or certified letter. If the termination is for cause, the employer must also notify the employee in writing of the allegations that led to the dismissal.
– Written notice of dismissal must be provided through a notary public or certified letter.
– If the termination is for cause, the employer must notify the employee in writing of the allegations that led to the dismissal.
Employees in Argentina have the option to resign by providing their employer with a 15-day notice or by compensating their employer with 15 days’ salary.
Biz Latin Hub can assist you in 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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The information provided here within should not be construed as formal guidance or advice. Please consult a professional for your specific situation. Information provided is for informative purposes only and may not capture all pertinent laws, standards, and best practices. The regulatory landscape is continually evolving; information mentioned may be outdated and/or could undergo changes. The interpretations presented are not official. Some sections are based on the interpretations or views of relevant authorities, but we cannot ensure that these perspectives will be supported in all professional settings.