ARGENTINA Trends and Developments Contributed by: Daniel Rinci, Tomas Cabanelas, Fernando García and Marisa Majul, Rinci & Asociados
Control Aduanero or ARCA, formerly the AFIP) now satisfies the employer’s record-keeping requirements. Existing payroll books must be preserved for ten years but no longer need to be kept after that. Pay slips can now be issued and signed digitally, and the pre - vious requirement to produce two physical copies is gone. Work certificates can be made available through ARCA’s online portal, eliminating a frequent source of post-employment disputes in which former employ - ees claimed they had not received their documenta - tion on time. For companies that use subcontractors, the reform also narrows the circumstances in which a principal company can be held jointly and severally liable for the subcontractor’s employment obligations. Provided the principal verifies the subcontractor’s compliance with labour and social security requirements, it will not be exposed to joint liability – a significant change for businesses that rely on contracted services. Flexible working arrangements The law introduces a bank-of-hours scheme allow - ing employers and employees to agree in writing on the accrual and compensation of overtime – replac - ing automatic overtime pay with compensatory time off or other agreed arrangements. Part-time workers can voluntarily take on additional hours beyond their contracted schedule. Vacation entitlements, previous - ly required to be taken in a single continuous period between October and May, can now be split into seg - ments of at least seven consecutive days at any time of the year. These changes reflect a broader push to align the statutory framework with flexible arrange - ments that were already common in practice but tech - nically non-compliant. Indexation of debts Perhaps the most commercially impactful change for businesses currently facing employment claims is the reform of how court-awarded amounts are updated over time. Under the previous system, each jurisdic - tion applied its own interest rates to labour claims, producing wildly divergent outcomes and creating strong incentives for litigation. The new law stand - ardises the approach: all labour credits will now be updated by the Consumer Price Index plus a fixed annual interest rate of 3%. Compound interest (inter -
est on interest) is prohibited, except where a debtor falls into default after a final court award. The law also allows court judgments to be paid in instalments – up to six monthly payments for large companies, and up to 12 for small and medium-sized enterprises. While the unions and the main labour confederation have challenged certain provisions before the courts – and some aspects were briefly suspended pending review – the core changes to interest calculations have already been upheld by an appeals chamber of the National Labour Court. Labour amnesty The law creates a Labour Formalisation Incentive Regime that allows employers to regularise unde - clared employment relationships – in effect, a labour amnesty. Employers who come forward can secure the cancellation of penalties and administrative fines, the extinction of criminal exposure under labour laws, and removal from the public registry of sanctioned employers. Remaining social security debts can be restructured into payment plans of up to 72 monthly instalments. A separate new hire incentive reduces employer social security contributions to 2% for the first four years when hiring previously undeclared or unemployed workers. Unions, strikes and essential services The law tightens the rules governing industrial action. Solidarity contributions charged to non-union mem - bers are capped at 2% of salary. Workplace blockades and the detention of people or goods during disputes are now classified as serious violations. More signifi - cantly, the list of sectors required to maintain mini - mum service levels during strikes has been substan - tially expanded. Sectors such as education, health, energy, and telecommunications must maintain at least 75% of normal operations; transport, banking, the food chain, and export activities must maintain at least 50%. The practical effect is to limit the disruptive reach of industrial action in the sectors that matter most to business continuity. What this means for foreign investors Taken together, these reforms shift the playing field in a direction that most foreign businesses will find more navigable. Severance obligations become more
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