Argentina has one of Latin America’s biggest economies. In 2022, the country had a GDP of 630.7 billion USD. Furthermore, the country also has an ever-growing labor force, with the number at 21,191,985 in 2021. Both these reasons have compelled entrepreneurs from all over to invest in this prime location. Additionally, Argentina has been committed to promoting businesses and enterprises in recent years.
Companies looking forward to establishing themselves in Argentina must understand the nitty-gritty of Argentinian labor laws. These laws regulate all aspects of employment and provide a framework for businesses to work within. Some key features of the labor regulations in Argentina are:
- A maximum of a 48-hour workweek
- 90 days of maternity leave
- Overtime compensation rate of 50% of an employee’s regular salary
- Paid annual leaves
To understand the rules and regulations better, continue reading this employment law in Argentina guide.
Who is Covered by the Employment Act?
The labor regulations in Argentina cover all individuals working in the country. This means that locals and foreign nationals working in any part of the country benefit from the employment act.
That being said, the laws do not apply to Argentinians working abroad. However, there is an exception when most of the work done is in Argentina and the work done abroad is either incidental or transitory.
As per the labor act rules in Argentina, written employment contracts are not mandatory in Argentina for full-time or permanent employment relationships. This is because the labor laws in Argentina are pretty comprehensive and govern almost all aspects of employment.
However, a written contract must be prepared for fixed-term or temporary (with no assured end date) employment. Some crucial points to mention in such contracts are
- Employment duration
- Basic salary and other benefits
- Working hours
- Job description
Key Provisions of the Act
Argentinian employment laws are overseen by the Ministry of Labor, Employment, and Social Security. The primary sources of these laws are:
- Argentinian Constitution
- The Employment Contract Act No. 20,744 (ECA)
- The Collective Bargaining Act No. 14,250
- The Employment Injuries Act No. 24,557
- The Workday Act No. 11,544
- The Mandatory Pensions Act No. 24,241
- International treaties
- Collective bargaining agreements or CBAs
- Other domestic laws about health, safety, and special professional statutes
Altogether, Argentinian labor laws govern almost all employment aspects. Vital provisions of the laws are discussed below.
- Employees in Argentina can have a maximum working duration of 48 hours per week.
- Employees should not work for more than 8 hours a day.
- However, the duration can extend to 9 hours if an employee has worked fewer hours on any other day of the week.
- Employees declared unhealthy by the relevant labor authority are not allowed to work more than 6 hours. Such employees are not permitted to work overtime either.
- Night shift work is permitted between 9 am to 6 pm with a maximum of 7 hours a day and 35 hours a week.
- Employers must also ensure employees have at least 12 hours of rest between two working days and 35 hours of uninterrupted rest period every week.
For employees below 18, the following working hours apply:
- Age 14 to 18: Maximum working hours of 6 per day and 36 per week.
- Age 16 and above: With authorization, working hours can be up to 8 hours a day and 48 hours per week.
- Individuals under 18 are not allowed to work from 8 pm to 6 am under any circumstances.
- Per Argentina’s regulations, overtime should not exceed 30 hours monthly and 200 hours yearly.
- Overtime hours are compensated at 50% of an employee’s regular salary.
- The compensation rate is 100% of the employee’s regular salary for overtime on rest periods or public holidays.
- Furthermore, each night shift hour is considered 8 minutes of overtime and compensated accordingly.
- Overall, there are 12 public holidays in Argentina. These days are considered to be non-working days.
New Year’s Day
Day of Remembrance for Truth and Justice
Day of the Veterans and Fallen of the Malvinas War
National Flag Day
Day of Respect for Cultural Diversity
Paid leave durations in Argentina depend on an employee’s years of service. The paid time off is as follows:
Years of service
Less than 5
Between 5 and 10
Between 10 and 20
More than 20
1. New mothers are entitled to 90 days of paid maternity leave.
2. This paid leave can begin 30 or 45 days before the expected due date.
3. Mothers are entitled to 90 days of paid leave in case of premature births.
4. Female employees can also claim additional three to six months of leave, which will be unpaid.
5. New fathers are granted two consecutive days of paternity leave.
1. As per labor regulations in Argentina, the duration of paid sick leave depends on an individual’s length of service.
2. For employees with continuous service of five years or less, the paid sick leave duration per year is three months.
3. For employees working more than five years, the paid sick leave duration is up to 6 months per year.
1. Employees enrolled in higher education or high school are granted two consecutive study leave days to appear for any examination.
2. Furthermore, 10 study leave days can be granted each calendar year.
Employees getting married are entitled to up to 10 days of marriage leave.
In case of the death of an employee’s parent, child, or spouse, three days of bereavement leave is granted.
Employees with compulsory military service are provided paid leave from the day of their convocation up to 30 days after their military service ends.
Payroll taxes and obligations
In Argentina, the income tax to be paid by an employee depends on their total income. A progressive taxation system is implied in the country, collected as deferred tax. The tax rates are as follows:
Up to ARS 10,000
ARS 10,001 to ARS 20,000
ARS 20,001 to ARS 30,000
ARS 30,001 to ARS 60,000
ARS 60,001 to ARS 90,000
ARS 90,001 to ARS 120,000
ARS 120,001 and above
Employees who are single and make less than ARS 5,783 in a month in Argentina are exempted from paying income tax.
Additionally, employees who are married with two children and make less than ARS 7,998 in a month are exempted from paying income tax.
Social security contributions:
According to the labor code in Argentina, both employers and employees contribute to the Argentinian social security, which in turn covers a wide range of schemes.
National Retirement and Pension System
Retirement and pension health management organization
National employment fund
Health management organization
National Life Insurance system
Employer contributes at a rate of USD 1.3 per employee
Termination of employment
1. Employees in Argentina must be provided with a written notice by the employer in case of termination of employment.
2. For contracts under the trial period, the notice period is 15 days.
3. The notice period is one month for employees working up to five years.
4. The notice period is two months for employees working over five years.
5. When employers do not wish to provide any notice period, it is mandatory to pay 15 days’ severance pay in place of the notice period.
6. If any employee wants to resign, they are also supposed to provide notice 15 days beforehand.
1. Employees who leave voluntarily or are terminated without cause are entitled to payment for outstanding vacations, all worked hours, and a statutory annual bonus.
2. Depending on the length of service, the severance pay might also include a seniority bonus.
3. Any female employee with a sick child can resign to care for their child. In such cases, she should be compensated with 25% of the severance payment she would have been given in case of termination without cause.
Data protection and employee privacy
- Per the Constitution and Data Protection Law 25,326 in Argentina, an employee’s personal information is confidential and protected by law. Hence, the employer cannot use this information for purposes other than for which it was obtained.
- Furthermore, employers are not allowed to transfer employee information to countries that do not have adequate data protection regulations.
When companies are not compliant with Argentinian labor law, penalties are levied against them.
- If an employee is dismissed based on discriminatory causes, the employer is legally bound to reinstate the employee and provide compensation for the damage caused.
- If any company is not providing equal pay for equal work to any employee, the employee has a right to litigation against the company based on salary discrimination. Subsequently, if the company is found guilty by the court, it can be required to pay severance, fines, or give equal pay.
- If any employee gets injured due to their work, the employer is bound to provide a particular type of insurance, as stipulated by the Employment Injuries Act No. 24,557.
Compliance Strategies for Employers
Employers can use the following strategies to act per the labor act rules in Argentina:
Following standard employment guidelines
- The Argentinian labor laws are comprehensive and all-encompassing, providing a robust structure for employers to hire new employees.
- Companies can follow the rules provided by the government to create an outline for their employees and, subsequently, manage them.
Creating an HR team
- Companies can also opt to create an in-house HR team that is well-versed in the labor code in Argentina.
- Subsequently, this HR team will be responsible for hiring and managing employees in compliance with local rules and regulations.
Outsourcing to an EOR
- Companies can outsource all tasks related to employee management to an experienced EOR or employer of record.
- The EOR will be able to handle employee documents, payroll management, social security contributions, tax obligations, and so on.
- EOR helps lower compliance costs and also protects employers from legal liabilities.
How Can Multiplier Help?
Argentina has been attracting many investors from all over due to its economic strength and ease of conducting business. However, it is mandatory to follow the Argentinian labor laws to operate in the country, which regulates every aspect of employment relations and management. This is where the need for an expert might arise.
To limit legal liabilities and fully comply with the Argentinian employment act, you can partner with Multiplier, a global EOR/POR solution provider. With our experience and expertise, we help you manage payroll, draft contracts, automate salaries, pay taxes, and so on.
Hence, you can rest easy knowing your company is hiring the best while being compliant in Argentina.