Hiring workers in Argentina is one of the next steps a foreign company wishing to do business has to undertake once it has set up its business organization1.
Labor relationships in Argentina have strong protection and are governed by the National Constitution2, international treaties, the Law of Contract of employment Number 20,744, as amended (Ley de Contrato de Trabajo, or LCT by its Spanish Acronym)3, further applicable laws4, the collective bargaining agreements and the specific stipulations of the individual contract of employment the employer enters with a certain worker.
Public policy has a decisive influence on labor laws, and hence most legal provisions are of an imperative nature and may not be overridden by individual agreements.
Argentine labor laws apply to all employees working in the country, regardless of their nationality. Foreign workers may be freely hired, as long as they first apply for, and are granted a temporary residence by the Argentine migration authorities5. No minimum percentage of national employees is required.
1. The general principle of the contract of employment
As a general principle, the labor contract is entered into for an indefinite period (LCT, Article Number 90), and need not be implemented in writing. Exceptions to the undetermined duration of the contract of employment, only applicable to very specific circumstances, are: fixed-term contracts (LCT, Articles Number 93 through 95), contracts for extraordinary services or requirements (LCT, Articles Number 99 through 100), part-time contracts (LCT, Article Number 92 ter), and seasonal contracts (LCT, Articles Number 96 through 98), all of which must be necessarily executed in writing.
Indefinite-term contracts of employment are considered to be entered into on a trial basis for a three-month period. During this probationary period, the employer may terminate the agreement at any time, with the sole obligation of serving a 15-day prior notice, or pay the salary corresponding to those days in case of lack of said prior notice (LCT, Article Number 92 bis).
The workday may not exceed nine hours a day or 48 hours a week. The weekly minimum rest must extend interruptedly for 35 hours, starting on Saturdays 1 pm (LCT, Article Number 204). The break between working days should not be less than 12 hours (LCT, Article Number 197).
Overtime must be paid a 50 percent more unless the extra hours are worked during the weekly rest period or on a public holiday, in which case the pay rate is 100% on top of normal salary (LCT, Article Number 201). Overtime may not exceed 30 hours a month or 200 hours a year unless authorized by the relevant labor authority.
Directors and managers are excluded from any shift limit and do not earn an extra salary when working longer hours. However, they are entitled to a weekly rest.
Night work and unhealthy activities have shorter shifts and further protections. Teamwork has specific regulations.
Since one of the constitutional mandates is the worker´s right to a fair remuneration and a minimum wage, pursuant to Article Number 116 of the LCT, there is nation-wide minimum salary periodically established by the National Council for Employment, Productivity, and an Adjustable Minimum Living Wage, a government agency made up of representatives from the private sector, unions and the executive branch of the national government.
However, collective bargaining negotiations always set higher basic salaries for the different productive activities.
All workers are also entitled to a thirteenth month of salary, paid in two installments in June and December6.
In future releases of this guide, we will cover the other basic aspects to be considered for those companies doing business in Argentina.
1. For the foreign investments´ legal framework, and the establishment of foreign companies in Argentina, please, see these articles on our Legal Blog: http://cspabogados.com.ar/en/foreign-investments-in-argentina/; and http://cspabogados.com.ar/en/foreign-companies-in-argentina/.
2. Under Articles Number 14, and 14 bis, of the National Constitution, among other labor and social security rights, all inhabitants of the Nation have the right to dignified and equitable working conditions; limited working hours; paid rest and vacations; fair remuneration; and minimum vital and adjustable wage (Text in Spanish of the Argentine National Constitution on: http://servicios.infoleg.gob.ar/infolegInternet/anexos/0-4999/804/norma.htm).
3. The LCT legislates every aspect of all labor relationships, except very few limited activities with specific statutes, such as rural workers, and household employees.
4. For example, the Workday Law Number 11,544; the Labor Risks Law Number 24,557; the Collective Bargaining Law Number 14,250.
5. See our article: http://cspabogados.com.ar/en/foreign-workers-in-argentina/, on our Legal Blog.
6. To specifically know more on labor costs in Argentina, please, visit us on our Lega Blog: http://cspabogados.com.ar/en/labor-costs-in-argentina/
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.