On Thursday, October 13, the Argentine Federation of Commerce and Services Employees (FAECyS) and the Argentine Chamber of Medium Enterprises (CAME, the Union of Argentine Commercial Entities (UDECA) and the Argentine Chamber of Commerce and Services (CACS) agreed to the terms of the salary agreement for the next six months.

The agreement was favorably received by the National Ministry of Labor and Social Security (MTEySS) and, as such, was formally approved through on Thursday, October 27 through resolution ST 743-E/2016.

I. Beneficiaries

The agreement benefits all those employees falling under the scope of application of the Collective Bargaining Agreement No. 130/75 for the Commerce and Services Employees, by virtue of the tasks and services they render.

II. Validity

The agreement will be valid and remain in full force and effect during the six months term comprised by the period October 2016 - March 2017.

III. Terms.

The agreed upon increase is of 19%, which will be paid in a non-cumulative manner pursuant to the following breakdown:

  • 12% non-remunerative increase as from October 2016;
  • 7% remunerative increase as from January 2017.

The agreement indicates that the first tranche of the agreed upon increase, that is to say the 12% as from October 2016, will be deemed non-remunerative for social security purposes. In other words, the increase will, indeed, need to be taken in consideration for the calculations and payment of the thirteenth mandatory salary (SAC), overtime and holiday pay, and vacations accrued as from this running year, non-occupational illnesses and additional items set forth by the CBA. As from April 2017, the 12% increase shall be deemed remunerative for all purposes, including social security. This means that social security contributions will need to be paid over this sum.

Considering the 20% increase previously granted for the April 2016-September 2016 period, the annualized salary increase for employees in the commerce and services industry is of 39%, exceeding the the initial parameters put forward by the National Government.

The agreement does not contemplate the payment of a an "end of year bonus" which, in the minute entitled "Dialogue for Production and Work", was agreed upon in generic terms by the General Confederation of Labor (CGT), the National Government and business/employers representatives.