Argentina

AVASO provides employer of record services for customers that want to hire employees and run payroll without first establishing a branch office or subsidiary in Argentina. Your candidate is hired via AVASOs’ Argentina PEO in accordance with local labor laws and can be onboarded in days instead of the months it typically takes. The individual is assigned to work on your team, working on your company’s behalf exactly as if he or she were your employee to fulfill your in-country requirements.

Table of Contents

• Hiring in Argentina
• Employment Contracts in Argentina
• Working Hours in Argentina
• Holidays in Argentina
• Vacation Days in Argentina
• Argentina Sick Leave
• Maternity/Paternity Leave in Argentina
• Health Insurance in Argentina
• Argentina Supplementary Benefits
• Bonuses
• Termination/Severance in Argentina
• Paying Taxes in Argentina

Our solution enables customers to run payroll in Argentina while HR services, tax, and compliance management matters are lifted from their shoulders onto ours. As a Global PEO expert, we manage employment contract best practices, statutory and market norm benefits, and employee expenses, as well as severance and termination if required. We also keep you apprised of changes to local employment laws in Argentina.

Your new employee is productive sooner, has a better hiring experience and is 100% dedicated to your team. You’ll have peace of mind knowing you have a team of dedicated employment experts assisting with every hire. Globalization Partners allows you to harness the talent of the brightest people in more than 187 countries around the world, quickly and painlessly.

Hiring in Argentina

Labor unions are common in Argentina, and they push hard for employee rights.  Meanwhile, employees often ask to be paid under the table in US dollars via direct wire to their bank accounts.  Pegging the salary to a USD exchange rate is a key negotiating factor with potential employees in Argentina due to the currency fluctuation risk.  Often, employees ask to be paid gross in USD via direct wire to their bank account.  Paying employees gross in USD as contractors is illegal in Argentina.  The arrangement may work well for everyone until the employee is terminated . . . at which point the employee may report having been illegally employed by a foreign employer.  It is the employer’s legal requirement to follow the labor and corporate laws in Argentina and thus it is the employer who takes the risk when breaking the law.  Argentina also has very strict, employee-friendly labor laws, and the courts usually rule in favor of an employee when an employee and employer land in court.

With such strict labor laws, noncompliance, once discovered, is extremely expensive to fix.  Given that the currency of the employment contract terms are so commonly negotiated, we recommend following the law to the letter in Argentina while putting a “checkpoint” into the contract terms to adjust the salary amount according to f/x rates every 12 months, so the employee is not disadvantaged.

It is worth noting that Argentina ranks 126th on the World Bank’s Ease of Doing Business list due to a complicated web of taxes, tax credits, subsidies, prohibitions, exemptions, and delays in doing business. The rules are not enforced uniformly and are vulnerable to corruption and bribes.  Use of Globalization Partners’ PEO and employer of record service in Argentina keeps our customers from having to set up a subsidiary or a branch office in a very difficult country in which to do business while also enabling customers to do business in a thriving economy.

When negotiating terms of an employment contract and offer letter with an employee in Argentina, it may be useful to keep the following standard benefits in Argentina in mind:

Employment Contracts in Argentina

The general rule in Argentina is that employment contracts are executed for an indefinite period of time. Indefinite term contracts do not need to be executed in writing. However, it is good practice to have the written formality for defining the terms of the contract.  Employers have the obligation to immediately register any and all employment relationships in a Special Payroll Book, which is subject to periodic control and supervision by the Ministry of Labor.

This information is provided as generally accepted information and is not intended as advisory services.  We would be happy to discuss these options with you if you are interested in our employment leasing or PEO service in Argentina.

Working Hours in Argentina

• The standard workweek in Argentina is 8 hours per day or 48 hours per week.
• Overtime must not exceed 30 hours a month and 200 hours a year, unless authorized by the relevant labor authorities.
• Overtime hours must be paid at a rate of 50% on top of normal salary, 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.

Holidays in Argentina

• 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

If any of the movable public holidays fall on a Tuesday or Wednesday, the holiday is the preceding Monday.  If it falls on a Thursday, Friday, Saturday, or Sunday, then the holiday is the following Monday. If the date of a non-movable holiday falls on Tuesday or Thursday, an extra holiday is added on the previous Monday or the following Friday, respectively.

Vacation Days in Argentina

• Employees who have worked for an employer for more than 6 months are entitled to 2 weeks’ annual leave.
• The amount of holiday entitlement increases with the length of continuous employment, up to a maximum of 5 weeks or 35 days.
• The minimum and continued period of paid annual vacations employees are entitled to are:
  • 14 calendar days when seniority does not exceed five years
  • 21 calendar days when seniority is between five and 10 years
  • 28 calendar days when seniority is between 10 and 20 years
  • 35 days when seniority exceeds 20 years

Employers may freely extend the vacations of their employees.  Employers 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.  Payment must be made in advance, and leave must begin on a Monday.

Argentina Sick Leave

If the employee has an illness or accident that is not work-related, they are entitled to:

• up to 3 months’ paid leave if they have worked for an employer for less than 5 continuous years
• up to 6 months’ paid leave if they have worked for an employer for more than 5 continues years.

If the accident, injury or illness is related to work performed for the employer, treatment costs, rehabilitation and sick pay are covered for up to 12 months by compulsory employment risk insurance.

Maternity/Paternity Leave in Argentina

Female employees are entitled to a special leave of absence for maternity including 45 days before and 45 days after childbirth. During maternity leave, employees are entitled to certain family allowances and other fringe benefits.

Male employees are allowed 2 days of paid paternity leave after the birth of a child.

Health Insurance 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).  All employees hired via Globalization Partners’ PEO and Employer of Record Service in Argentina are covered under our health insurance plan.

• Employers contribute 6% and employees contribute 3% on top of the base salary.
• The PMO covers:
  • Maternity and child plans; oncology; primary assistance (emergencies); dental plan; rehab programs; medication; prostheses; HIV & Drug addiction
  • Secondary assistance: Medical appointments, medical exams, surgeries, hospitalization, therapies, etc.
  • Pathological Anatomy ; Anesthesiology ; Cardiology; Cardiovascular Surgical; Surgical heads and neck;  General Surgical ;Children’s Surgical; Surgical reconstructive plastic; Surgical Chest; Medical Clinic; Dermatology; Diagnostic pictures: Radiology, tomography;  ultrasonography; Endocrinology;  Infectology; Physiatrists (physical medicine rehab);  Gastroenterology; Geriatrics; Gynecology; Hematology; General Family Medicine; Nuclear medicine: diagnosis and treatment; Nephrology; Neonatology; Neonatology; Neurology; Nutrition;  Obstetrics; Ophthalmology;  Oncology; Orthopedics and trauma therapies; otolaryngology; Pediatrics; Psychiatry; Rheumatology; Intensive care and Urology

Argentina Supplementary Benefits

Employees also receive paid leave under the following circumstances:

• Marriage: 10 days’ leave
• Death of a child, parent or spouse: 3 days’ leave
• Death of a sibling: 1 day’s leave

Meal tickets, although optional, are a common benefit provided to employees in Argentina, fully paid by employers, on a monthly basis together with the monthly salary. The amount paid to employees varies depending on the occupation of the employee, but it usually does not exceed 1/6 of the monthly salary.

Bonuses

Local law states employees are entitled to receive, on top of their salaries for each calendar year, an additional monthly salary (13th-month salary also knows as Aguinaldo). This 13th-month salary is payable in two semiannual installments, which are due prior to June 30th and December 18th. The amount of each installment is equal to 50% of the highest monthly wage received during the previous 6-month period.

Termination/Severance in Argentina

Employees may resign at any time and must give the employer 15 days’ prior notice.

• For indefinite period contracts, the first 3 months are considered the probationary period. During the probationary period, either party may terminate the employment relationship at any time without the employer having an obligation to make a severance payment.

• For indefinite term employment contracts, employers may dismiss an employee at any time upon giving the employee:
  • Prior notice of 15 days (if the employment contract is terminated during the trial)
  • 1 month (if the period of service is greater than the trial period but less than five years)
  • 2 months (if the period of service is greater than five years)
  • This notice can be substituted with a salary payment equivalent to the period of prior notice

Employers are required to make severance payments to the employee based on the employee’s highest ordinary monthly salary earned during the previous year of employment or full term of service, if shorter than one year.

• With certain limits, employers must pay to the employee one month’s salary for each year of employment or period worked in excess of three months for which the employee worked for such employer.
• In any event, the severance payment cannot be lower than once the ordinary highest monthly salary.
• If an employee is dismissed for gross misconduct, no severance payment or prior notice is required; however, the burden of proof lies with the employer to show that gross misconduct occurred.

Paying Taxes in Argentina

Social security in Argentina includes the following:

• Employers are required to make contributions to the Pension Fund System, Medicare Coverage, Life Insurance, and Labor Risk insurance for the employee. The rates are as follows:
  • Pension fund: 17%
  • Medical care coverage: 6%
  • Life Insurance: 0.50%
  • Labor Insurance: 2.41%
• Employees are required to make the following contributions:
  • Pension fund: 11% (Ceiling ARS 28,000.65)
  • Medical care coverage: 3% (Ceiling is ARS 28,000.65)
  • Social services: 3% (Ceiling is ARS 28,000.65)

There is no insurance against long term disability in Argentina.  If the employee has a percentage of disability higher than 66%, s/he will receive a disability certificate and will be obligatorily retired and will receive a pension from the government (the value of the pension varies case by case).

In Argentina, employers contribute 4.44% or 5.56% of gross payroll, according to the type of enterprise on top of the base salary for Family Allowances.

• Family Allowances cover the birth of a child, disabled child, prenatal, adoption, marriage, etc., at the discretion of the employee.
• The payment is made monthly or by a lump sum payment depending on the allowance required.