Argentina PEO & Employer of Record

WeHG provides an International PEO and global Employer of Record service in Argentina to companies willing to enter the Argentinian market or hire local/expat employees in this country.

Traditional approach requires establishing a subsidiary in Argentina.  However our Employer of Record solution allows you to start the operations in Argentina within days hence save time and money.  WeHG would hire candidates on your behalf while you maintain full operational control of their work. So legally they would be our employees, on our local payroll, 100% compliant but will work on your behalf.

Argentina fast facts

Population, million: 45,195,774
Land area: 2.78 million km²
Capital: Buenos Aires
Local currency: The peso (ARS)

GDP per capita:$ 8854.00
GDP in currency:$ 409 billion

Laws applicable to foreign nationals
Argentinean employment law applies to all workers, regardless of their nationality or the place of execution of the contract, as long as the employment relationship is conducted within the country. The main sources of employment law are:

• The national Constitution.
• International treaties.
• The Employment Contract Act No. 20,744 (ECA).
• The Workday Act No. 11,544.
• The Employment Injuries Act No. 24,557.
• The Mandatory Pensions Act No. 24,241.
• The Collective Bargaining Act No. 14,250.
• Other domestic law, such as health and safety legislation and special professional statutes.
• Collective bargaining agreements (CBAs).

These laws apply to every person working in Argentina, but do not apply to persons from Argentina working abroad, unless the work done abroad is transitory or incidental and most of the relationship is executed in.

Argentine employment law governs all employment relationships executed in Argentina, regardless of the place of incorporation of the employer or the place in which the contract was concluded.

Hiring, Negotiating and Doing Business in Argentina

Necessity of written employment contract

Written employment contracts are not required for permanent, full-time employment relationships, although they are advisable in many cases. In the case of casual employment, as well as part-time and fixed-term contracts, a written agreement is required.

Different forms of engagement: employment, contracting, work with private entrepreneur

Sector or industry-wide collective agreements are common and cover almost every employee, regardless of union affiliation. Most collective agreements apply nationally across a particular industry. However, it is possible to have a collective agreement that applies, for example, to a particular company or group of companies, or even to a particular company premises. All collective agreements must be signed by the trade union. In addition, company level agreements must be signed by up to four employee representatives.

Argentina Employment Contract

Types of employment agreements

As there are different types of employment contracts, there are different categories of worker, depending on the type of contract that is signed. Generally, the categories of worker are as follows:

• Full time workers. Work full time under a long-term contract.
• Part-time workers. Work part-time under a long-term contract (receiving proportional payment to full time workers).
• Fixed term contract workers. Work for a specific period of time, which can be no longer than five years, and which must be justified by an extraordinary reason to need to apply a fixed term contract.
• Temporary workers. Work for no longer than six months. These employees can be hired directly by the company or be hired from an employment agency. In all cases, there must be a special reason to apply a temporary work contract (for example, to cover maternity leave or replace an employee who is leaving).
• Seasonal workers. Work under a long-term contract that is performed only at certain periods of the year.

Additionally, all workers can be hired on an initial three-month trial period.

Argentina working hours

Employees must not work more than:

• eight hours a day, which can be extended to nine hours a day if an employee works fewer hours on another day of the week.
• 48 hours a week.

Employees doing work that has been declared unhealthy by the relevant labour authority must not work more than six hours a day and cannot work overtime. Unhealthy work includes working in refrigerated chambers or in some underground premises. The relevant labour authority is the Ministry of Labour, Employment and Social Security (Ministerio de Trabajo, Empleo y Seguridad Social de la Nación) (Ministry of Labour) or the provincial labour authorities, depending on the circumstances.

Overtime

Overtime must not exceed 30 hours a month and 200 hours a year, unless authorised by the relevant labour authority (see above).
Overtime hours must be paid at a rate of 50% on top of normal salary. This rule applies unless overtime is worked during the weekly rest period or on a public holiday, in which case the relevant pay rate is 100% on top of normal salary. However, some CBAs set higher rates for overtime work.

Vacation leave in Argentina

Employees who have worked for an employer for more than six months are entitled to two weeks’ holiday. The amount of holiday entitlement increases with the length of continuous employment, up to a maximum of five weeks (35 days).

The employer must pay salary and other benefits to the employee during annual leave. This payment is calculated by dividing the salary by 25 and then multiplying it by the number of days’ holiday to which the employee is entitled. This must be paid in advance, and leave must begin on a Monday.

Other circumstances in which an employee receives paid leave are:

• Marriage: ten continuous days’ leave.
• Death of a child, parent or spouse: three continuous days’ leave.
• Death of a sibling: one day’s leave.
• A high school or university exam: two continuous days up to a maximum of ten days a year.

Argentina Maternity Leave

Female employees are entitled to 90 days’ paid maternity leave. This is usually taken in the 45 days before giving birth and the 45 days afterwards. However, the employee can instead choose to take 30 days’ leave before giving birth and 60 days’ leave afterwards. Leave is paid by the social security system as a family allowance.

Female employees can request additional unpaid leave of between three and six months.

While a newborn baby is breastfeeding, a female employee can take two half-hour periods a day to feed her baby, for up to one year after the birth.

During pregnancy, and up to 7.5 months after giving birth, a female employee’s employment cannot be terminated without fair cause. If the employee’s employment is terminated, she can claim additional severance (one year’s salary, plus regular severance, notice and so on) 

Paternity rights

Male employees can take two days’ paternity leave after the birth of a child although some CBAs establish longer periods. There are Bills currently before parliament that propose the extension of statutory paternity leave 

Argentinian Severance Laws

Notice periods
The following notice periods apply:

• 15 days during the three-month probation period of a permanent employment contract.
• One month for an employee with less than five years’ service.
• Two months for an employee with more than five years’ service.

Payment in lieu of notice is possible in the above cases.

A prohibition on dismissals is currently in force, pursuant to Decree 624/2020, by which an employer cannot proceed with a dismissal without just cause, for lack of work or a decrease in work, or due to force majeure until 30 September 2020. In case the employer proceeds with a termination of an employee in violation of the above, such termination will be considered null and will have no legal effect. As such, the employment relationship will continue under the same terms and conditions. Decree 624/2020 also prohibits furloughs due to force majeure, for lack of work or a decrease in work until 30 September 2020. Additionally, severance compensation duplication pursuant to Decree 528/2020 due to an occupational emergency is currently in force until 7 December 2020. Both the prohibition on dismissals and the severance compensation duplication may be extended in time, according to the emergency context.

In case of termination of employment without justified cause, the employer must pay the employee mandatory severance compensation, as provided by law, within 4 days after serving notice of termination, as follows:
Seniority compensation: equivalent to the highest monthly salary for each year of employment or period exceeding 3 months, taking, as a basis, the highest monthly salary and the regular and ordinary salary accrued during the last working year. Such basis has a maximum ceiling amount provided by the applicable bargaining agreement (three times the average of all wages provided by such collective bargaining agreement) and a minimum cap amount (one gross monthly salary). The Supreme Court ruled that said ceiling must not imply a reduction of more than 33% of the highest monthly salary basis.

Compensation in lieu of notice: the employer must give a prior written notice to the employee in the event of a termination of employment absent justified cause. Such prior notice must be given by the employer:
15 days in advance, if the labour contract is under the trial period;
1 month in advance, if the employee has served for up to 5 years; and
2 months in advance, if the employee has served for more than 5 years.
If the employer does not give such prior notice, it must pay this severance compensation in lieu of notice, equal to 15 days’ salary plus one or two monthly salaries (dependent upon each specific case). It is customary for employers opt to pay this compensation instead of giving prior notice.
Pending days till the end of the month: if the dismissal does not take place on the last day of the month, the employer must pay a compensation equal to the proportional salary for the pending days, to complete the entire month in which the dismissal took place.

Compensation for unused vacations: the employee is entitled to compensation equal to the vacation pay in proportion to the days effectively worked, for the year in which the dismissal took place.

Argentina Tax

Employee deductions for taxes range from 5% to 35% depending on income level.

Monthly contributions must be made from the 9th-11th of every month to the tax authority.

The typical penalty awarded for the late submission is $AR 400 and payment of tax contributions is 0.001% per day over the total amount.

Social Security

Employee deductions for social security are as follows:

• 11% Pension Fund System
• 3% Health Insurance
• 3% Law 19032

Employer contributions for social security are:

• 18% or 21% Pension Fund System (depending the total head count and the annual earnings of the company)
• 6% Health Insurance
• Accident Insurance will between a fixed value ($ar0.60 per employee and a rate over the total salary). This rate will be established to the company according to the specifications of itself
• $14.09  per each employee for Life Insurance

Monthly contributions must be made from the 9th-11th of every month to the tax authority.

The typical penalty awarded for the late submission and payment of tax contributions is 2-5 %.

Health Insurance Benefits in Argentina

The mandatory health insurance provided to employees via private companies in Argentina, arranged by labor unions, covers what is established by the PMO (Compulsory Medicare Program).

Additional Benefits in Argentina

The ECA gives employees rights to, among other things:

• Severance payments and minimum notice periods in the case of dismissal;
• Paid sick leave;
• A minimum weekly rest period of 35 hours, a 12-hour break between work days and overtime;
• Annual paid vacation;
• A 13th month payment (a form of mandatory yearly bonus);
• Healthcare protection;
• A compulsory retirement plan.

Argentina Holidays

Argentina celebrates 15 public holidays for which employees are given the day off, including:

• New Year’s Day
• Carnival
• Carnival/Shrove Tuesday
• Truth and Justice Memorial Day
• Good Friday
• Day of the Veterans (Malvinas Day)
• Labor Day
• May Revolution Day
• National Flag Day (Manuel Belgrano Day)
• Independence Day
• San Martin Day
• Day of Respect for Cultural Diversity
• National Sovereignty Day
• Immaculate Conception Day
• Christmas Day

Additionally, the following holiday is commonly observed:

• Christmas Eve

Why Choose WeHireGlobally

WeHG takes care of all the onboarding hurdles, payroll, compensation and benefits, tax filing, and termination of employment. Our Employer of Record solution allows you to manage your overseas teams efficiently while minimizing cost and risk.