ARGENTINA - EOR

If you are embarking on expanding abroad where you have not incorporated a legal entity yet, you will need our in-country Employer of Record (EOR) services to be able to hire employees fast and in a compliant manner. We make hiring an easy, effective and highly cost efficient experience and take on the burden of all administration. 

Your candidates get hired by Coberon Chronos’ PEO legal entity in accordance with local Labor Laws and can be onboarded in days by signing an employment contract we can provide in Spanish. The employed is eligible and assigned to work with and on your company’s behalf exactly as if he or she were your employee in-country. We prepare the monthly salary, benefits and allowances payroll based any timesheet provided and we calculate all expense reimbursement costs too.

Employment At a Glance

Hiring in the Argentina

Argentina has very strict but still employee-friendly labor laws. One of the key factor is that employees often try to negotiate and/or to be paid in USD due to the currency fluctuation, however still paying any people in USD as contractors via a wire transfer from USA or any countries is illegal in Argentina. Therefore, negotiating the salary to ARS with an USD exchange rate is a main focus right before an offer letter is sent. 

  • The payment of remuneration by the employer in return for work performed by the employee is an essential element of the employment contract.
  • Employees are entitled to equal pay for equal work and must be remunerated equally for performing the same job with the same degree of efficiency.
  • Various statutory rules govern the method and frequency of payment of remuneration, and employees must be provided with payslips.
  • Employers may not make any deductions from employees' remuneration except where specifically required or permitted by law.
  • A statutory national minimum wage applies to employees aged 18 and above.
  • All employees and employers are obliged to pay contributions to the statutory public pension scheme.
  • Employers must withhold employees'  income tax at source, and also the employees must pay statutory social security and related contributions.
  • Employees are entitled to paid sick leave of three to 12 months, depending on their length of service and family responsibilities.
  • In addition to normal remuneration, employees are entitled to receive an annual "13th month" salary payment - that is, one extra month's pay each year.

It is the employer's responsibility to follow the labor laws, paying employees according to the legal payroll requirement and during any termination it is best to focus on this key factor, because Argentinian courts usually rule in favor of an employee when an employee and employer land with an argument in court.

 Employment contract in Argentina

For newly hired employees, indefinite term contracts are not required to be in writing. Offer letters are typically not provided when hiring under this arrangement, although a written formality may be appropriate if there are certain issues to be clarified.

If an employment contract is to be drawn, the following details may be included:
  • Specification of trial period
  • Overtime conditions
  • Annual paid vacations
  • Maternity leave
  • Termination rules
  • Severance pay
  • Notice of dismissal
  • Company benefits (not mandatory)

Probationary period

Employment contracts may be for an indefinite period or for a fixed term. In indefinite period contracts, the first three months are a trial period. During the trial period, either party may terminate the labor relationship at any time without the employer having an obligation to make a severance payment. However, the terminating party is obliged to give a fifteen day’s prior notice.

Health Services And Insurance in the Argentina

Government-funded Health Services

  • Public health care, which covers approximately 50 percent of the population, is funded by the Argentinian government. The Ministry of Health (Ministerio de Salud) is responsible for public health services, government hospitals and medical services. The running of actual services, however, often takes place at a municipal level, which means that there are different levels of quality within the country.
  • Public medical institutions are free of charge for both nationals and foreigners. A patient’s identification documents are required. The only charges for both nationals and foreigners are prescription charges for outpatients. Pharmacies require a prescription for most medicines. No special registration is required to benefit from government-funded health services. However, long waiting lists for medical care means that many people choose to take out private health insurance.

Private Health Insurance In Argentina

  • The mandatory health insurance is provided to employees via private companies and there is a wide range of private insurers to choose from, both national and international. Some private hospitals in large cities provide health plans which expatriates and residents can enroll in. Private health insurance premiums vary depending on age and family needs, as well as the risk that the insured person may represent. In general these companies do not cover pre-existing conditions.
  • Patients with no health insurance have to meet the costs of treatment in private hospitals.
Social Security in the Argentina

In formal employment, both employers and employees are obliged to pay into a health insurance scheme organized by private health insurers. This is the most common form of health insurance in the country. There are numerous schemes run by different unions, all overseen by the National Health Insurance Administration (La Administración Nacional del Seguro de Salud). The unions often do not provide services directly, but rather outsource to the private sector.

The cost of medical care varies, and patients have to pay the difference between the cost of treatment and a fixed fee.

Private Medical Sector
  • In Argentina the private sector is thriving but fragmentary, with many establishments and individuals not affiliated with any organization. They provide care mainly to those with private insurance, or those who are part of a national health insurance scheme (Obras Sociales).
 
Pension Plans in the Argentina
 

Most people in Argentina choose between paying into a social scheme for their retirement years or an individual account. For the public pension, the retirement age is 60 for women and 65 for men, provided that they have paid contributions for at least 30 years. As of January 2016, the basic monthly pension was 1,610 ARS (116 USD).

Public Holidays and Vacation in Argentina

Argentina celebrates 15 public holidays:
  • New Year’s Day - January 01
  • Carnival Monday - February 27
  • Carnival/Shrove - Tuesday February 28
  • Truth and Justice Memorial day - March 24
  • Veteran’s day - April 2
  • Maundy Thursday - April 13
  • Good Friday - April 14
  • Labour day - May 1
  • May day Revolution - May 25
  • Martin Miguel de Guemes day - June 17 (celebrated since 2016)
  • National Flag Day - June 20
  • Independence day - July 9 (celebrated on 10th of July)
  • St. Martins Day - August 21
  • Columbus day - October 9
  • Day of national sovereignty - November 27
  • Immaculate conception day - December 8
  • Christmas day - December 25
Employees are entitled to annual paid holidays, which vary from 14 to 35 calendar days each year depending on length of service. In addition, employees are entitled to short leaves of absence in the event of marriage, birth, death of a close relative and high school or university examinations.
 
13th month salary in the Argentina
Contributions are paid monthly. Contributions based on the annual 13th month of salary are paid in two halves in June and December.

 

Bonus payments in Argentina

Salaries may be paid upon a monthly, daily or hourly basis, depending on the type of work performed by the employee. There is a mandatory minimum wage per month. By law, employees are entitled to an annual bonus (aguinaldo) paid in two installments, in June and December each year, equivalent to 50% of the highest monthly wage received during the previous six month period.

Typically, the standard working week is from 40 to 48 hours, with an average of 8 hours per day. Workers earn overtime pay for work performed in excess of the standard working week. The rates of overtime pay are 150% of the base rate on normal work days and 200% of the base rate on Saturday afternoons, Sundays and official holidays.

Sick Leave in Argentina
  • 14 calendar days (from 0 to 5 years seniority/service years)
  • 21 calendar days (from 5 to 10)
  • 28 calendar days (from 10 to 20)
  • 35 calendar days (from 20).
  • Every employees is also entitled to 11 paid public holidays.
Maternity/Shared Parental Leave in the Argentina
Female employees enjoy certain additional rights, the most notable of which are special leaves of absence for maternity of 45 days before and 45 days after childbirth. Furthermore, during maternity leaves, employees are entitled to certain family allowances and other fringe benefits. In the event of an inability to work due to illness or accidents which are not related to work, employees are entitled to their full salaries for a period which may vary from 3 to 12 months, depending on length of service and the existence of a dependent family.

 

Termination of the Employment Contract and Severance in Argentina

The employment stability is the right of workers to maintain the employment relationship for a specified or unspecified time. In Argentina, the employment stability is relative, which means that the employee may be dismissed, but he has the right to be paid the severance compensation.

  • The labour contract may be terminated by the employee, by the employer or by both parties.
  • If both parties decide to terminate the labour relationship, the act must be executed by deed or before the administrative or judicial labour authority.

The following notice periods apply:

  • 15 days during the three-month probation period of a permanent employment contract.
  • One month for an employee with less than five years' service.
  • Two months for an employee with more than five years' service.

Payment in lieu of notice is possible in the above cases.

Severance pay is calculated on the basis of the employee's highest regular, normal monthly salary accrued over the last year, although the payment is capped by law for companies that apply CBAs (most companies do).

The Supreme Court recently held the cap to be contrary to the protections provided by the Constitution (Vizzotti v AMSA, 2004). As a result, the application of the legal cap cannot reduce the amount of severance pay by more than 33%.

The employer must pay the employee's salary in full for the month when the termination occurs.

Fixed-term employees whose employment is terminated before finishing the project or period for which they were hired can claim damages. These are usually calculated as the remaining salary that would have been paid had the employees finished the project or period for which they were hired.

In addition, fixed-term employees who have been employed for more than a year are entitled to 50% of the severance pay that a permanent employee would receive when terminated if the term of employment for which the fixed-term employees were hired has been completed.

Employment Taxes in Argentina

Argentina residents are liable to a progressive tax on their worldwide income ranging between 9% - 35%. There are 7 income tax scales:

Taxable Income (ARS)

Tax Rate %

ARS 0 to 10,000

9%

ARS 10,001 to 20,000

14%

ARS 20,001 to 30,000

19%

ARS 30,001 to 60,000

23%

ARS 60,001 to 90,000

27%

ARS 90,001 to 120,000

31%

ARS 120,001 and above

35%

Non-Taxable income is ARS 10,800 / year.

Income tax is levied on income earned in Argentina and abroad by individuals residing in Argentina.

Argentina Income tax is withheld from salaries. Employers are required to withhold these taxes on a monthly and actual basis at the appropriate personal rates applied to the net taxable remuneration of each employee.

  • Employer's social security contributions are currently close to 26% of gross wages, including payments to the statutory pension/healthcare/life/labor risk insurace for employees. Furthermore, employer must contribute 4.44 - 5.56% of total gross payroll into the Family Allowances system depending on the type and size of company. 
  • Employee social security contributions are currently 17% of gross wages, up to a monthly cap of ARS 13,879.25, and the total includes an
    • 11% pension fund contribution,
    • 3% towards the Pensioner’s Healthcare Fund and
    • 3% to Medical Care.

 

Why Coberon Chronos

Hiring a small or large number of employees in Argentina can be time consuming, expensive and complex without the extensive knowledge of the local Labor Code but mostly to apply it to the best practices.

Coberon Chronos can help your business to hire your candidates, handle all the hiring administration and payroll and ensure that you’re in compliance with local labour laws, without the burden of setting up a large office or subsidiary abroad in a rush.
Our Global Employer of Record and PEO services lets you focus on running your key business in a new country.
If you have an immediate EOR needs or just wwant to discuss how CoberonChronos can provide a seamless temporary workforce or PEO solutions for hiring employees in Argentina, please contact us at sales@coberonchronos.com.

 get a quote small

?>