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Argentina’s proposed labor reform has entered a decisive stage. As of February 26, 2026, the bill has already been approved by the Chamber of Deputies and is now scheduled for a final vote in the Senate on February 27, 2026.
For global employers hiring or operating in Argentina, whether through direct employment structures or an Employer of Record (EOR), this development could significantly impact workforce planning, labor costs, compliance strategy, and employment contracts.
This is a developing legislative process and this article will be updated as official decisions are confirmed.
Is Argentina’s Labor Reform Already Law?
No. As of February 26, 2026, the labor reform is not yet law.
The Chamber of Deputies approved the bill after introducing modifications to the original text, including the removal of a controversial article concerning sick leave payments. Because the text was amended, the bill must return to the Senate for final approval before it can be promulgated and published in the Official Gazette.
Until official publication occurs, no changes are legally in force.
What Is Being Debated in Argentina’s Labor Reform?
The proposed reform includes structural modifications to Argentina’s employment framework. If approved in its current form, it could introduce the following changes:
1. Extended Daily Working Hours and “Bank of Hours”
The proposal allows daily working hours to extend up to 12 hours under a “bank of hours” system. This mechanism would permit overtime hours to be compensated with time off rather than mandatory premium pay, subject to regulatory conditions.
For employers, this may provide greater operational flexibility and potential cost management opportunities. However, implementation would require adjustments to internal policies, time tracking systems, and payroll calculations.
2. Changes to Severance Calculations
The reform proposes modifying the base used to calculate severance payments, potentially excluding certain salary components that are currently considered.
If enacted, this could reduce termination costs compared to the current system. Employers would need to review employment agreements, severance modeling, and financial risk assessments.
3. Creation of a Labor Assistance Fund
The bill contemplates the creation of a structured fund or insurance-style mechanism to finance termination compensation through periodic employer contributions.
This approach could shift termination cost exposure from large lump-sum payments to a more predictable contribution-based system, requiring payroll configuration updates.
4. Vacation Flexibility
The proposal introduces greater flexibility in vacation scheduling, including the possibility of splitting vacation periods with agreement between employer and employee.
Companies may benefit from improved workforce planning, but HR policies would need to be updated accordingly.
5. Restrictions on the Right to Strike
The reform includes provisions requiring minimum service levels in essential sectors during strikes. This may limit operational disruption in certain industries.
Employers operating in unionized environments should monitor how these changes interact with collective bargaining agreements.
Argentina Labor Reform: Before vs After (If Approved)
| Area | Current System | Proposed Reform | Employer Impact |
|---|---|---|---|
| Daily Working Hours | Standard 8-hour workday | Up to 12 hours under a “bank of hours” system | Increased scheduling flexibility and potential overtime cost adjustments |
| Overtime Compensation | Mandatory premium payment | Possibility of compensatory time off | Payroll restructuring and time management policy updates |
| Severance Calculation | Broad salary base included | Certain salary components excluded | Potentially lower termination cost exposure |
| Termination Model | Traditional indemnity system | Option for labor assistance fund | More predictable cost structure |
| Vacation Scheduling | Continuous vacation periods | Possibility of split vacation periods | Greater workforce flexibility |
| Right to Strike | Broad protections | Mandatory minimum services in key sectors | Increased operational continuity in essential industries |
How Could This Affect Global Employers Hiring in Argentina?
For foreign companies expanding into Argentina, labor law predictability is critical for strategic decision-making.
If the reform is enacted, potential implications include:
• Adjusted workforce cost projections
• Revised termination risk modeling
• Changes in collective bargaining dynamics
• Updates to employment contract templates
• Payroll system modifications
• Increased need for compliance monitoring during transition
Companies operating through an Employer of Record must ensure that any structural labor law changes are properly implemented within employment contracts and payroll systems. Organizations hiring independent contractors should also assess whether any indirect regulatory shifts affect classification risk.
What Happens Next? February 27 Senate Vote
The Senate is scheduled to vote on the amended version of the labor reform bill on February 27, 2026.
Possible outcomes include:
• Approval of the amended text, allowing the bill to proceed toward promulgation
• Further modification, which could return the bill to the Chamber of Deputies
• Rejection of the bill
• Subsequent judicial challenges after enactment
Until final approval and official publication occur, the current labor framework remains in effect.
Should Employers Act Now?
At this stage, employers should avoid premature structural changes.
Recommended actions include:
• Monitor official publications from the Senate and the Official Gazette
• Conduct scenario-based cost planning
• Review workforce risk exposure under both current and proposed models
• Avoid modifying employment contracts until final legal confirmation
• Consult compliance specialists before implementing policy changes
This remains a developing legislative situation and updates should be tracked closely.
About Serviap Global
Serviap Global is a leading Employer of Record and payroll solutions provider across Latin America.
We support international companies by:
• Hiring employees legally in Argentina and throughout LATAM
• Managing payroll, social security, and statutory compliance
• Monitoring labor law changes in real time
• Reducing termination and litigation risk
• Enabling expansion without the need to establish a local entity
With local compliance experts across the region, we help global employers navigate complex regulatory environments confidently.
As labor laws evolve, your business strategy should remain protected.
Secure your workforce strategy in Argentina with expert local compliance support.
Argentina Labor Reform 2026 Proposal: FAQs for Global Employers
1. What is the Argentina labor reform 2026 proposal about?
The Argentina labor reform 2026 proposal is a legislative initiative currently under debate that seeks to modify key aspects of employment law, including working hours flexibility, severance calculation rules, overtime compensation mechanisms, vacation scheduling, and strike regulations. As of February 26, 2026, it remains a proposal pending final Senate approval.
2. Is the Argentina labor reform 2026 already in effect?
No. The Argentina labor reform 2026 proposal has been approved by the Chamber of Deputies but is still pending final Senate approval and official publication. It is not yet law.
3. What would change under the Argentina labor reform proposal?
If approved, the proposal could introduce a bank of hours system allowing extended workdays, modify severance calculation bases, create a labor assistance fund, provide more flexible vacation arrangements, and establish minimum service requirements during strikes.
4. Will the Argentina labor reform 2026 reduce severance costs?
The proposal includes changes to the severance calculation base that could reduce employer costs if enacted. However, final implementation details depend on Senate confirmation and regulatory decrees.
5. When could the Argentina labor reform become law?
If the Senate approves the proposal, it would move toward promulgation and publication in the Official Gazette. Only after official publication would the reform become legally effective.
6. Should global employers make changes now because of the Argentina labor reform 2026?
No. Since the reform is still a proposal and has not been enacted, employers should avoid modifying contracts or payroll structures until final approval and official regulatory guidance are issued.
