With a mixture of emerging and booming economies, political uncertainty and extreme contrasts in business customs, the Americas can never be categorized as one homogeneous whole.
HR and payroll rules and regulations vary across jurisdictions, even among neighboring ones – and sometimes even within the country. Here we take a look at how HR & Payroll works in Argentina.
Social Security System
- Both employees and employers have to make contributions towards the cost of the health system, and to fund future retirement pensions for employees. The contributions on charge of employers are calculated at a rate of 23% of the gross salary paid, excepting entities with certain activities and high revenues, which are subject to a higher rate: 27%.
- The share of the employee's contributions is calculated on the basis of his/her gross salary or by considering a fixed amount defined by the Federal authorities on a semi-annual basis, whichever is the lowest, and according to the following rates:
- 11% of the gross salary for pension fund system,
- 3% of the gross salary for retirement fund (INSSJP)
- 3% of gross salary for medical assistance
Additional withholdings may be applicable in case of employees subject to Union's rules.
- Argentina’s Labor Law, the Labor Union Law, the Labor Risk Law, and collective bargaining agreements govern labor-management relations, and employee rights and remuneration in the country.
- Employees may be laid off without compensation during the trial employment period (first 3 months), provided 15 days’ notice is given.
- Employees who have worked for an employer for more than five years must be given two months’ notice on termination, while one month’s notice is sufficient for employees with less than five years of employment. Employers may also opt to provide payment in lieu of advance notice equal to the salary for either one or two months.
Foreign Personnel and Work Permits
- There are no restrictions on the employment of foreigners, provided they hold the appropriate visas.
- Companies that intend to hire foreigners must be registered with the National Registry of Sponsoring Entities, which is a division of the Department of Immigration
- Prospective employees from MERCOSUR countries and MERCOSUR associate countries can apply for a temporary residence visa that entitles the individual to work in Argentina, without the need for sponsorship.
- The most common types of work visas issued in Argentina are:
- Article 29 (e) visas: Short-term visas with an initial validity is for 15 days
- Article 15 (E) Labor Contract/Temporary Residence Visa: Applicable for employees / people doing internships. Minimum duration is of 6-12 months. To obtain the visa a formal labor contract between the Argentinean company and the employee is required, along with a Código Único de Identificación Laboral (CUIL).
- Article 15 (E) Secondment/Temporary Residence visa: Issued to employees who are sent to Argentina by their company for at least 6-12 months. Presenting a formal labor contract between the Argentine company and the employee is not a mandatory.
Payroll Cycles & Overtime:
- Employers in Argentina are required to pay salary and social security contributions to employees every month (or fortnightly in case of certain employments subject to Union's rules), which is determined at the outset of employment, under the employment contract.
- Argentine law also requires a bonus (i.e. thirteen salary) to be paid to employees every year – in June and December – equal to 50% of the highest monthly wage received by the employee during the previous six-month period.
- Overtime work is permitted with certain restrictions. In general, overtime on weekdays and Saturday mornings is paid at time-and-a-half, and double time is paid for Saturday afternoons, Sundays and holidays.
- Decree # 484/2000 established a limit of 200 hours overtime per year and 30 hours overtime per month.
- The vacation period ranges from 14 to 35 consecutive days, depending on the number of years of service. To be entitled to a full vacation period, an employee must have worked at least half of the working days in the calendar year.
- Some of the issues covered by the labor law in force are: remuneration; annual vacations and special leaves of absence; holidays and non-working days; daily and weekly working and resting hours and termination or transfer of a labor contract.
- Argentine labor law sets forth the following types of labor contracts:
- Labor contract for an indefinite period,
- Labor contract for a fixed period,
- Seasonal labor contract,
- Part-time labor contract.