Why work in
Grow your team in
Growing a team means hiring the right employees at the right time and for the appropriate positions. Employers in Argentina must have a local entity to handle compliance, payroll, tax, and benefits management. The complexity of employment regulations in Argentina makes compliance with employment laws demanding.
With Gloroots’s global Employer of Record (EoR) service, you can let Gloroots do the heavy lifting of payroll, tax, benefits, and compliance and concentrate on what matters to you most: your employees and company growth.
Risks of misclassification
The term "misclassification of employees" refers to the inaccurate classification of workers by their employers. Misclassification occurs when an employer categorizes a worker as an independent contractor or exempts them from certain employment laws and benefits, even if the worker should be classified as an employee and entitled to legal protections, benefits, and rights.
Utilizing a PEO/EOR in Argentina helps mitigate the risks associated with misclassification by ensuring compliance with labour laws, proper employee classification, accurate payroll processing, and access to comprehensive benefits. This enables businesses to focus on their core operations while entrusting employment-related responsibilities to experienced professionals.
Legal aspects of employing in
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Labour relationships in Argentina are mainly governed by the National Constitution, international treaties and conventions, the Labour Contract Law No. 20,744 (“LCL”), Collective Bargaining Agreements (“CBAs”), individual agreements with the employees, general internal policies and customs in the workplace. Familiarize yourself with these laws to ensure compliance in areas such as minimum wage, overtime, and employee rights.
In Argentina, it is obligatory to formalize employment contracts in writing, whether they are fixed-term or indefinite-term agreements. When creating employment contracts in Argentina, there are several crucial factors to consider:
1. Compensation: It is vital to include a section in the contract that clearly defines the employee's compensation. This section should provide a concise breakdown of the various forms of remuneration, such as salary, bonuses, commissions, and any other benefits. By incorporating this information into the contract, both the employer and employee can have a transparent understanding of the compensation package, reducing the likelihood of future misunderstandings or conflicts.
2. Payment Schedule: It is important to specify the frequency of payment in the contract. This may involve indicating whether payments will be made on a monthly or bi-weekly basis, ensuring clarity and predictability for both parties.
3. Benefits: When drafting employment contracts, it is crucial to explicitly outline the benefits that will be provided to the employee. These benefits can encompass health insurance, retirement plans, vacation days, sick leave, and any other supplementary benefits or allowances.
By addressing these key aspects in the employment contract, employers and employees in Argentina can establish a solid foundation that promotes transparency, fairness, and compliance with legal requirements.
This might sound overwhelming—but it doesn’t have to be. A solution like Gloroots eliminates the barriers for you. With Gloroots’ Employer of Record offering, hiring and managing employees globally is a piece of cake.
Get an overview of what you need to know when hiring in Argentina.
The standard working hours in Argentina is typically 8 hours per day or 48 hours per week. This means that the regular working day is usually 8 hours, from Monday to Friday.
In the absence of any provisions in a collective bargaining agreement, the compensation for overtime work is typically calculated at a rate of 1.5 times the regular hourly wage. However, if an employee works during a holiday or rest period, the overtime pay rate is usually doubled, i.e., two times the regular hourly wage.
The country observes 12 public holidays employees can take as paid days off.
Argentina's current monthly minimum wage stands at 112,500 Argentine pesos (ARS).
Employees are granted paid leaves up to 35 days based on their years of service.
Paid Sick Leaves
In Argentina, employees are eligible for sick leave based on their tenure with the company. The policy for sick leave also varies based on whether the ailment or injury is related to work or not.
In a work-related illness or injury, the employer's responsible for covering the initial 15 days of the employee's salary. Once the initial period has elapsed, insurance will assume responsibility for any outstanding expenses.
In the event that an employee's illness persists beyond a 12-month leave period, the employer may discontinue payments while still being obligated to retain the employee for an additional 12 months.
After the specified timeframe has elapsed, it is imperative for the employer and employee to engage in a conversation regarding long-term disability arrangements or severance pay. The decision will be based on the nature of the disability and the work that needs to be done.
Paid maternity leaves are mandatory for female workers in Argentina. It is unlawful for an employer to terminate a pregnant employee - except on the grounds unrelated to pregnancy or birth. However, the onus of proving that the dismissal isn’t on grounds of childbirth falls on the employer.
During this period, female employees are compensated through their social security contributions.
Maternity breaks last for up to 90 days. Most employees opt to take 45 days prior to giving birth and 45 days afterwards.
Male employees are entitled to two days of paid paternity leave.
Tax and Social Security contribution:
Both employees and employers make contributions to the social security system. As part of the social security program, it is mandatory for employers to provide their employees with contributions towards the pension fund system, Medicare coverage, life insurance, and labor risk insurance.
Employers are required to pay a corporate income tax. The nation follows a progressive taxation model, wherein the tax rate on income rises proportionally with the company’s earnings.
Employee Income tax
In Argentina, the income tax system follows a progressive structure, which means that tax increases as the income rises. Employers must ensure that the deductions are accurately made.
In Argentina, residents and non-residents are taxed at progressive income tax rates ranging from 5% to 35%.
In Argentina, it is mandatory for employers to furnish written notice to their employees when terminating their employment. Termination of employment can occur due to various reasons such as employee misconduct, economic circumstances, or inadequate job performance. It is crucial for employers to ensure that they provide precise information during the termination process as they are not permitted to alter the grounds for termination at a later stage.
The process of terminating employment in Argentina can prove to be a complex and intricate affair. The circumstances surrounding an employee's termination can have a significant impact on various factors, including severance pay.
In Argentina, the amount of severance pay that employees receive upon being terminated without cause is dependent on their length of service and the specific circumstances surrounding their dismissal.
In Argentina, when it comes to termination of employment, various forms of compensation may be involved. These can include:
1. Seniority Compensation: Employees are compensated based on their highest monthly salary, calculated according to the length of service.
2. Compensation in Lieu of Prior Notice: Payment made to the employee in lieu of the required notice period for termination.
3. Payment for Remaining Days in the Month: Compensation for the remaining days in the month following termination.
4. Compensation for Unused Vacation Time: Payment for any accrued but unused vacation days that the employee is entitled to.
5. Proportional Compensation for the 13th Month Salary: Calculation of the proportional amount of the 13th month salary, based on the duration of employment during the year.
6. Special Compensation for Union Delegates: Additional compensation provided to union delegates in recognition of their role and responsibilities.
7. Special Compensation for Pregnant Employees or Those on Sick Leave: Additional compensation granted to pregnant employees or employees on sick leave due to specific legal protections.
Adhering to these severance pay requirements is crucial for employers to comply with labor laws and avoid legal complications. Obtaining legal advice can guarantee precise execution of these regulations.
The length of notice periods is contingent upon the duration of the employee's tenure with the organization.
When terminating employees without prior notice, employers can compensate the employee with pay, corresponding to their notice period. For example, an employee who has served for more than 5 years can be terminated with one month’s pay and any severance pay, if required.
The probationary period should not exceed three months.