anyone considering Registering a company in Argentina, or those planning to do business in Latin America’s third-largest economy, need to ensure they fully comply with local employment laws to maximize their chances of success.
Argentine employment law is Ministry of Labour, Employment and Social Security, while Argentine employment regulations share many similarities with regulations in other countries, there are also some unique aspects to understand.
For anyone in need of local executives, or looking to hire skilled staff on a project-based or short-term basis, a good alternative to forming an entity is through Argentine Professional Employers Organization (PEO).
Because, when you recruit through a PEO, the service provider will officially be their employer, and those employees will report directly to you. This means that you can conduct business in the country without going through company formation and subsequent liquidation, and it also comes with the assurance that the PEO company will comply with local employment regulations.
A basic guide to Argentine employment law is provided below, including information on working hours, types of contracts, termination and severance pay, leave and other absences, and wage-based contributions and deductions that employers must monitor.
If you would like to know more about how we can support you in entering the market and doing business in Argentina, contact us today.
Argentine Employment Law: Standard Working Hours
According to Argentine employment law, a standard workweek should not exceed 48 hours, with each working day lasting 8 hours. All workers are entitled to 35 consecutive hours of rest per week, usually starting at 13:00 on Saturdays, unless their work specifically requires weekend hours.
If an employee works more than 48 hours in a week, by law, they must receive additional wages proportional to the additional hours worked.
Note that in Argentina there are usually around 15 national holidays on the working day in each calendar year.
Ordinary contracts under Argentine labor law
While employment law in Argentina allows for many different types of contracts, the following five are the most commonly used:
- indefinite contract is the most common type of contract and only terminates when the employer and employee reach a mutual agreement, or when one of the parties has the right to act unilaterally (such as when the employee resigns or the employer fires them for misconduct).
- term contract A period of time specified in an ongoing contract, usually for the completion of a specific task or project with a clear end or completion date. Such contracts cannot last more than five years.
- part-time contract To serve a role with limited hours, anyone on a part-time contract may not work more than two-thirds of the standard work week, which is a maximum of 32 hours per week.
- Temporary Employment Contract Allowed only in exceptional circumstances. While it is not necessary to state the duration of the contract, a temporary contract can be limited to a maximum of 6 months in a 12-month period, or a maximum of 12 months in a three-year period.
- learning contract Designed to allow people to learn important skills to complete the roles they will enter through indefinite contracts. As such, they can only be given to people between the ages of 16 and 28, and only last 3 to 12 months.
Termination and Severance
Under Argentine employment law, employees are obliged to give 15 days’ notice of their intention to resign. Employers can reduce any final payments due if they provide less notice, but only if they enter the proper judicial process and prove that leaving early has caused them financial harm.
When the employer chooses to terminate the labor contract without justifiable reasons, it must give the employee a notice period based on the employee’s length of service. The notice period ranges from 15 days during the probationary period to two months in the company’s working period for more than five years. Employees who have passed the probationary period but have served less than five years must give one month’s notice.
If the employer wants the employee to leave before the end of the specified notice period, the employee is still required to pay wages for the entire period, plus an additional payment equal to 15 days’ wages.
Any employee who leaves voluntarily or terminates a contract without good cause shall also receive the following compensation:
- Pay for all hours worked
- Payment for unpaid leave
- Proportion of outstanding payments related to statutory annual bonus (13th salary), based on their year of employment
Employees who are dismissed without good cause will also receive a seniority bonus based on their years of service, which is equal to one month of their highest monthly salary for each year of their employment during their tenure.
Dismissal for justifiable reasons, such as failure to perform duties properly or committing a criminal act that damages the interests of the company, the employer must be able to prove justifiable reasons in judicial proceedings, otherwise it will be liable for compensation.
Holidays, vacations and other absences under Argentine law
Argentina’s employment law states that employees who have served at least one year are entitled to continuous paid time off (PTO) per calendar year based on their seniority in the company, calculated as follows:
- 14 days with less than five years of service
- 21 days of service over 5 years but less than 10 years
- 28 days of service over 10 years but less than 20 years
- 35 days of service over 20 years
Employees enrolled in high school or tertiary education can take any exams they are required to take on two consecutive days and can take up to 10 days of study leave per calendar year.
Maternity and Paternity Leave
New mothers are entitled to a total of 90 calendar days of maternity leave, which can begin 30 or 45 days before the due date recorded by a certified doctor. In the case of premature birth, the mother still has the full 90 days of leave. For new fathers, two consecutive days of paternity leave are granted.
The maximum length of time an employee can be absent 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 of paid sick leave. This allowance is doubled if the employee has dependents.
Under Argentine employment law, three days of bereavement leave are granted if an employee’s spouse, child or parent dies, and one day of bereavement leave if an employee’s sibling dies.
After the employee gets married, they can enjoy 10 consecutive days of vacation.
Argentine Employment Law: Statutory Contributions
Employers must deduct 17% from each employee’s gross salary, 14% for pension contributions and 3% for health insurance.
Employers are required to contribute the equivalent of 23.03% of the employee’s gross salary, of which 17.3% goes to pensions, 4.83% to health insurance and 0.9% to the state employment fund.
Biz Latin Hub can help you do business in Argentina
At Biz Latin Hub, we provide market access support and a comprehensive package of back-office services according to the individual needs of our customers.
This makes us an ideal partner to support cross-border operations and facilitate market entry across jurisdictions.
We are committed to compliance wherever we operate, so working with us guarantees that your company will comply with every aspect of employment law in Argentina or any other country where we assist you.
Contact us today Learn more about how we can support your business in Argentina.
or learn more about our Team and Expert Authors.
Download our Argentine Labour Law infographic here: