The Labor Law in Argentina is holistic and rather complicated. It tries to protect the rights of the worker so that no employer can get away with mistreating his worker. To help you understand the intricacies of the Labor Law, we have compiled the most relevant issues for employing staff in the industry.

Labor Laws

The Argentinian Labor Law states that a written contract is not necessary to determine employment relationship when:

1. A person performs tasks for another person or company, physically or legally, according to his will.
2. When a person receives remuneration for the work he completes for a company

This means that an unsaid contract exists between the employer and employee when reciprocal benefits are included in the relationship. This employment contract does not have a specific time limit unless both parties mutually agree to stop working for each other.

The labor contract establishes a non-waiver of any agreement made by both parties that wish to diminish the rights provided by the law, professional representatives, joint agreements, or individual employment contracts.

Trial Period

Argentinian Labor Law determines a 3-month trial period or probation person during which the employer is given the right to terminate a position without any obligation of compensation. However, he must follow some rules:

1. The same worker cannot be employed more than once using the trial period scheme
2. The employer is bound to provide advance notice before terminating the employment
3. The worker, during the trial period, holds rights and obligations of the employment relationship. This includes right to the donations to Social Security made by the employer

Required Contributions

The employee is eligible for certain contributions to his salary by the employer. Along with the gross salary, the employer must pay an additional 25-30% as employer contributions. These are determined by the Federal Administration of Public Income (AFIP) and can differ based on an employee’s contract. The employer is required to deposit the necessary contributions with the name of the employee to the AFIP. Approximately 17% will be cut from the employee’s gross monthly salary as a result of these contributions.

Supplemental Annual Salary (SAC)

More commonly known as “Aguinaldo,” the SAC is the payment of an extra amount of salary to the employee per year. 50% of this is required to be paid in June, with the remaining 50% to be paid in December (of the same year).

The SAC is calculated by calculating the highest monthly salary given for each semester. This includes calculating overtime pay and bonuses. In case the employee has not worked for an entire semester, the employer must make special considerations.

Severance Pay

Labor Laws in Argentina protect workers by making sure that the employer pays a certain compensation to his worker at the time of termination. This depends on the position of the employee and the reason for termination.

The employee has certain rights to ensure his protection:

1. Prior notice: the employer is liable to give a 1 months’ notice before terminating the employment
2. The amount collected from the salary till the date of dismissal of the employee
3. Compensation along with the wages of dismissal
4. Seniority: equal to 1 months’ salary for a year employed, or a little over 3 months
5. Corresponding SAC
6. In case of left-over holidays, the worked will be reimbursed

Depending on the company and employee relationship, some compensation may still follow.

Since Argentina has been facing economic downturns, employment in the private sector has been affected, along with the work ethic and competitiveness in the industry. The Argentinian Labor Law is in place to protect the worker and ensure new jobs that will aid the growth of the economy.