Key labor laws in Argentina

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Key labor laws in Argentina

In Latin America, Argentina stands out as one of the largest economies with a Gross Domestic Product (GDP) that represents more than 500 billion dollars.

In respect of businesses, Argentina can provide better economic options to foreign investors who have expertise in a variety of sectors. For example, the country is considered as one of the main producers of agriculture commodities like soybeans (ranking between the top 3 worldwide producers), maize, livestock, and wheat.

Also, the country offers business opportunities in manufacturing, renewable energy, tech, oil and gas, mining, and more.

Main Labor Laws and Employment Regulations in Argentina

In Argentina, applicable labor laws and employment regulations are mainly specified by the Labor Contract Law, known in Spanish as Ley de Contrato de Trabajo (LCT), Number 20,744 (as amended). Additionally, the government agency responsible for the establishment and execution of labor laws relies on the Ministry of Production and Labour (MPL).

Now, before starting your business in Argentina, it is essential to analyze its key labor laws and regulations:

Contract of employment

Labor contracts are commonly signed for an indefinite term and do not need to be carried out in writing. It is determined that contracts encompass a probation period during the first three months. In the case of collective contracts, the probation period can be extended up to six months.

On the other hand, there are other kinds of contracts that must be written, such as fixed-term contracts (with a maximum term of 5 years), part-time contracts, contracts for extraordinary requirements, and seasonal contracts.

Working hours

The legal working time per week is 48 hours or 8 hours per day. Normally, for employees, it is forbidden to work on Saturdays’ afternoon (after 1 pm) and Sundays.

Overtime work must be paid to all employees, excepting for managers and directors, and it must be as follows:

  • From Monday to Saturday before 1 pm (normal working days), workers must be paid with their normal salary and an extra 50 percent.
  • On Saturdays after 1 pm, Sundays, and official holidays, employees must be paid with their normal salary and an extra 100 percent.

Paid Leaves

Workers are entitled to paid leaves if they have been working for the same company at least six months. In this sense, annual holidays depend on the employee’s seniority:

  • With less than five years – 14 calendar days
  • From five to ten years – 21 calendar days
  • From ten to twenty years – 28 calendar days
  • Above twenty years – 35 calendar days

Bonus

Employees, additionally to their regular pay, must be granted with an annual bonus (called in Spanish as aguinaldo). It has to be paid each year in two equal installments, the first one on June 30 and the second on December 18. This bonus must represent 50% of the worker’s highest monthly salary following the previous six-month term.

Mandatory requisites to hire

In order to hire an employee, it is mandatory to conduct a pre-employment medical examination. This test must carry out to indicate if the candidate is adequately qualified to execute his or her job activities.

Which are the Legal Entities in Argentina?

Commonly, the three most-used business entity types in Argentina are:

  • Corporation (Sociedad Anónima, or S.A.).
  • Limited liability company (Sociedad de Responsabilidad Limitada, or SRL).
  • Simplified Shares Company (Sociedad por Acciones Simplificadas, or S.A.S)

Nonetheless, to comply with Argentina’s labor laws and employment regulations without having to open a legal entity, you will need support from an International PEO partner to take care of it, and start your business operations in little time

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