Globalization Partners provides employer of record services for clients that want to hire employees and run payroll without first establishing a branch office or subsidiary in Argentina. Your candidate is hired via Globalization Partners’ Argentina PEO in accordance with local labor laws and can be onboarded in days instead of the months it typically takes. The individual is assigned to work on your team, working on your company’s behalf exactly as if he or she were your employee to fulfill your in-country requirements.
Our Global Employer of Record Platform™ and Global PEO service enables clients to run payroll in Argentina while HR services, tax, and compliance management matters are lifted from their shoulders onto ours. As a Global PEO expert, we manage employment contract best practices, statutory and market norm benefits, and employee expenses, as well as severance and termination if required. We also keep you apprised of changes to local employment laws in Argentina.
Your new employee is productive sooner, has a better hiring experience and is 100% dedicated to your team. You’ll have peace of mind knowing you have a team of dedicated employment experts assisting with every hire. Globalization Partners allows you to harness the talent of the brightest people in 150 countries around the world, quickly and painlessly.
Basic facts about hiring in Argentina
Labor unions are common in Argentina, and they push hard for employee rights. Meanwhile, employees often ask to be paid under the table in US dollars via direct wire to their bank accounts. Pegging the salary to a USD exchange rate is a key negotiating factor with potential employees in Argentina due to the currency fluctuation risk. Often, employees ask to be paid gross in USD via direct wire to their bank account. Paying employees gross in USD as contractors is illegal in Argentina. The arrangement may work well for everyone until the employee is terminated . . . at which point the employee may report having been illegally employed by a foreign employer. It is the employer’s legal requirement to follow the labor and corporate laws in Argentina and thus it is the employer who takes the risk when breaking the law. Argentina also has very strict, employee-friendly labor laws, and the courts usually rule in favor of an employee when an employee and employer land in court.
With such strict labor laws, noncompliance, once discovered, is extremely expensive to fix. Given that the currency of the employment contract terms are so commonly negotiated, we recommend following the law to the letter in Argentina while putting a “checkpoint” into the contract terms to adjust the salary amount according to f/x rates every 12 months, so the employee is not disadvantaged.
It is worth noting that Argentina ranks 121st on the World Bank’s Ease of Doing Business list due to a complicated web of taxes, tax credits, subsidies, prohibitions, exemptions, and delays in doing business. The rules are not enforced uniformly and are vulnerable to corruption and bribes. Use of Globalization Partners’ PEO and employer of record service in Argentina keeps our clients from having to set up a subsidiary or a branch office in a very difficult country in which to do business while also enabling the clients to do business in a thriving economy.
When negotiating terms of an employment contract and offer letter with an employee in Argentina, it may be useful to keep the following standard benefits in Argentina in mind:
Public Holidays in Argentina
If any of the movable public holidays fall on a Tuesday or Wednesday, the holiday is the preceding Monday. If it falls on a Thursday, Friday, Saturday, or Sunday, then the holiday is the following Monday. If the date of a non-movable holiday falls on Tuesday or Thursday, an extra holiday is added on the previous Monday or the following Friday, respectively.
Bonus payments in Argentina
Local law states employees are entitled to receive, on top of their salaries for each calendar year, an additional monthly salary (13th month salary also knows as Aguinaldo). This 13th month salary is payable in two semiannual installments, which are due prior to June 30th and December 18th. The amount of each installment is equal to 50% of the highest monthly wage received during the previous 6-month period.
Working hours in Argentina
Vacation Benefits in Argentina
Employers may freely extend the vacations of their employees. Employers must pay salary and other benefits to the employee during annual leave. This payment is calculated by dividing the salary by 25 and then multiplying it by the number of days’ holiday to which the employee is entitled. Payment must be made in advance, and leave must begin on a Monday.
Sick Leave in Argentina
If the employee has an illness or accident that is not work related, they are entitled to:
If the accident, injury or illness is related to work performed for the employer, treatment costs, rehabilitation and sick pay are covered for up to 12 months by compulsory employment risk insurance.
Maternity and Paternity Leave in Argentina
Female employees are entitled to a special leave of absence for maternity including 45 days before and 45 days after childbirth. During maternity leave, employees are entitled to certain family allowances and other fringe benefits.
Male employees are allowed 2 days of paid paternity leave after the birth of a child.
Termination/Severance in Argentina
Employees may resign at any time and must give the employer 15 days’ prior notice.
Employers are required to make severance payments to the employee based on the employee’s highest ordinary monthly salary earned during the previous year of employment or full term of service, if shorter than one year.
Payroll taxes in Argentina
Social security in Argentina includes the following:
There is no insurance against long term disability in Argentina. If the employee has a percentage of disability higher than 66%, s/he will receive a disability certificate and will be obligatorily retired and will receive a pension from the government (the value of the pension varies case by case).
In Argentina, employers contribute 4.44% or 5.56% of gross payroll, according to the type of enterprise on top of the base salary for Family Allowances.
Health Insurance in Argentina
The mandatory health insurance provided to employees via private companies in Argentina, arranged by labor unions, covers what is established by the PMO (Compulsory Medicare Program). All employees hired via Globalization Partners’ PEO and Employer of Record Service in Argentina are covered under our health insurance plan.
Additional Benefits in Argentina
Employees also receive paid leave under the following circumstances:
Meal tickets, although optional, are a common benefit provided to employees in Argentina, fully paid by employers, on a monthly basis together with the monthly salary. The amount paid to employees varies depending on the occupation of the employee, but it usually does not exceed 1/6 of the monthly salary.
Employment Contracts in Argentina
The general rule in Argentina is that employment contracts are executed for an indefinite period of time. Indefinite term contracts do not need to be executed in writing. However, it is good practice to have the written formality for defining the terms of the contract. Employers have the obligation to immediately register any and all employment relationships in a Special Payroll Book, which is subject to periodic control and supervision by the Ministry of Labor.
This information is provided as general accepted information and is not intended as advisory services. We would be happy to discuss these options with you if you are interested in our employment leasing or PEO service in Argentina.
Why Globalization Partners
Establishing a branch office or subsidiary in Argentina to engage a small team is time consuming, expensive and complex. Argentinian labor law has strong worker protections, requiring great attention to detail and an understanding of local best practices. Globalization Partners makes it painless and easy to expand into Argentina. We can help you hire your candidate of choice, handle HR matters and payroll, and ensure that you’re in compliance with local laws, without the burden of setting up a foreign branch office or subsidiary. Our Argentina PEO and Global Employer of Record Platform provides you piece of mind so that you can focus on running your business.
If you would like to discuss how Globalization Partners can provide a seamless employee leasing or PEO solution for hiring employees in Argentina, please contact us at email@example.com.