By Quadlux | EOR and Workforce Solutions
Argentina is preparing for one of the most significant labour law overhauls in decades. This matters not only for domestic employers but also for global businesses with operations or talent in the country. At the same time, the Employer of Record (EOR) model provides a timely solution for companies navigating change. Here is what you need to know.
1. What is changing under the reform proposed by President Javier Milei
The reform bill, titled the “Ley de Promoción de Inversiones y Empleo” (Investment and Employment Promotion Act), aims to modernise Argentina’s labour law framework, which has remained largely unchanged for 70 years. Key features include:
- Extending the working day: Up to 12 hours per day, subject to collective bargaining and union agreements.
- Revising holiday entitlements: Holidays may be divided into periods of at least one week, with at least one summer vacation every two years unless the worker opts out.
- Changing severance pay rules: Employers (except large firms) may pay severance in up to 12 monthly instalments. Settlement and approval procedures would also be simplified.
- Introducing tax incentives for job creation: A fiscal credit bond would cover employer social security contributions for new hires. This would include 100 percent coverage for micro-enterprises, 75 percent for small enterprises, 50 percent for medium, and 25 percent for large companies.
- Digitalising administrative processes: Legal recognition of electronic payslips and broader payment options such as bank transfers and authorised digital platforms.
- Revising collective bargaining norms: A shift toward company-level agreements linked to productivity and merit instead of automatic index-linked pay increases.
- Redefining salary calculation criteria: Items like meals, school supplies, mobile phones, and medical reimbursements would be excluded from the base salary used for contributions.
2. Why this reform and what are the official objectives
The reform is described as a necessary step to increase formal employment and reduce informality in the labour market. The government estimates that up to eight million workers are currently employed informally.
The central objective is to ensure that Argentina can produce and work. The reform seeks to align labour regulation with modern economic realities, including digital workflows, flexible employment models, and performance-based compensation. It also aims to improve the country’s appeal to investors.
By lowering the cost of terminating employment, including severance and litigation risks, the reform is intended to make hiring more accessible and encourage job creation.
3. Implications for employers and HR teams
For companies operating in Argentina or considering entry into the market, these changes bring both opportunities and responsibilities.
Opportunities:
- More flexibility in structuring working hours and shifts
- A larger pool of eligible talent through formalisation of previously informal workers
- Reduced labour costs through tax incentives, especially for smaller enterprises
- Streamlined administrative processes with electronic payslips and digital tools
Risks and considerations:
- Employers may need to revise contracts, payroll systems, and HR policies to ensure compliance
- Some proposals, such as extended working hours, may face criticism or resistance
- Flexibility does not eliminate legal obligations. Compliance will remain essential
- International companies will need to align local labour laws with global HR policies
- The legislative process is expected to move quickly, requiring timely action from businesses
4. How the EOR model fits into this context
The Employer of Record (EOR) model offers a valuable solution during periods of regulatory change. It allows businesses to hire and operate in Argentina without the need to establish a local legal entity or commit to long-term infrastructure.
Key benefits of using an EOR in Argentina:
- Hire local talent quickly and compliantly without setting up a subsidiary
- Delegate employment contracts, payroll, social security, and compliance to a local expert
- Maintain operational flexibility while legal changes are implemented
- Reduce legal risk through a locally embedded partner who understands labour regulations
5. Practical next steps for HR and business leaders
To prepare for the reform and evaluate EOR options, consider the following actions:
- Review employment contracts to ensure they are adaptable to proposed changes such as extended hours, divided holidays, or instalment-based severance
- Audit HR and payroll systems to support digital payslips and updated compensation models
- Engage with unions and bargaining units early to facilitate agreement on reform-driven changes
- Reassess hiring strategy and consider whether EOR is a suitable solution for reducing exposure and increasing flexibility
- Incorporate tax incentives into workforce planning to optimise labour costs
- Monitor legislative developments and prepare to implement changes proactively
6. Quadlux’s role and support
At Quadlux, we specialise in HR and labour law advisory across Latin America. We help businesses with:
- Reviewing and redrafting employment contracts to align with evolving laws
- Analysing the financial impact of proposed changes to working hours, severance, and incentives
- Implementing and managing EOR solutions tailored to your hiring goals
- Training HR and payroll teams to prepare for and apply the new regulations
Conclusion
Argentina’s labour law reform represents a pivotal opportunity to modernise outdated regulations and open new possibilities for businesses and workers. Companies that plan ahead will be better positioned to adapt, stay compliant, and succeed. For those expanding or entering Argentina, the EOR model offers a flexible and secure way to operate in a dynamic legal environment.
Contact Quadlux today to schedule a complimentary review of your Argentina hiring strategy and learn how we can support your success in 2025 and beyond.
