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: A map of the country and its main cities, all abiding by the same regulations within the employment law in Argentina. 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 Labor 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.
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 administered to people between 16 and 28 years old and can only last between 3 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
Study leave: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. Employees have the right to study leave to take exams.
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.
Sick leave
The maximum period for which an employee can claim remuneration for work missed due to illness or injury depends on their…
