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  • Legal system, currency, language

    Civil law. Argentine Peso (AR$). Spanish.

  • Corporate presence requirements & payroll set-up

    A foreign entity cannot hire employees in Argentina without a local corporate presence.

    Employers must pay social security contributions (23% or 27% on top of salaries, depending on the company's activity and revenues). Employees must contribute 17% of their salaries to the social security system (to be withheld by the employer and subject to certain taxable limits). Income tax is also withheld by the employer when paying employees' salaries (maximum rate 35%, subject to a progressive scale).

    Collective Bargaining Agreements for certain activities provide payments to be made by the employer and/or the unionized employees to the relevant Unions.

  • Pre-hire checks

    Required

    Pre-employment medical examination.

    Permissible

    • Psycho-technical test (test into certain psychological aspects and technical expertise relevant for the position)
    • Background checks of educational degrees
    • Criminal records checks only for certain jobs (eg, security guards)

    Financial status checks and medical checks regarding certain medical conditions can be regarded as discriminatory and are not permitted.

  • Immigration

    Natives of MERCOSUL Treaty associated countries (Bolivia, Brazil, Chile, Colombia, Ecuador, Paraguay, Peru, Uruguay, Venezuela, Guayana or Surinam or natives of other countries nationalized for at least 5 years in Brazil, Uruguay, Paraguay, Chile or Bolivia), can apply for a simplified immigration proceeding directly before the Immigration Agency after entering Argentina, for obtaining a temporary residence (work permit) without the sponsoring of a specific employer.
    Immigrants from non- MERCOSUL countries have to apply for a temporary residence (work permit) under the standard proceedings, sponsored by an employer duly registered in Argentina.

  • Hiring options

    Employee

    Indefinite term employment contract is the general rule for hiring employees.
    Employees can also be hired through fixed-term, temporary or seasonal employment contracts, provided the employer complies with the specific legal requisites for each contract.

    Independent contractor

    Individuals rendering services for a company on a regular basis as "independent contractors" can be regarded as concealed employees. The risk of misclassification is usually high. Only in certain cases it would be advisable to hire individual independent contractors to perform specific tasks (eg, professionals, consultants, non-regular technical tasks).

    Agency worker

    It is accepted to engage employees through agencies for temporary and extraordinary tasks subject to certain regulatory and case law limits.

  • Employment contracts & policies

    Employment contracts

    Indefinite term employment contracts do not need to be in writing. Fixed-term and certain temporary employment contracts must be executed in writing.

    Probationary periods

    Indefinite term contracts may contain a probationary period of up to 3 months.

    Policies

    Employers can issue internal policies for ruling certain aspects of employment relationship, provided they observe minimum rights stemming from Labor Law and relevant Collective Bargaining Agreements.

    Third-party approval

    Neither employment contracts nor company policies require third-party approvals.

  • Language requirements

    Even though it is not legally required, it is strongly advisable to draft employment contracts and company policies in Spanish.

  • Minimum employment rights

    Employees entitled to minimum employment rights

    All employees are entitled to minimum employment rights stemming from the Labor Law or the relevant Collective Bargaining Agreement (CBA), when applicable.

    Working hours

    The maximum working hours are 48 hours per week. Working shifts can be structured, for example, in 9 hours per day for 5 days per week, as long as they do not exceed the weekly limit. Only directors and other high-level managers are exempt from the working hours limit and therefore not entitled to overtime.

    Overtime

    Employees who work overtime during weekdays (ie, Monday through Saturday at 1:00 pm) are entitled to an additional 50% payment based on the hourly salary rate. If the employees work overtime on national holidays or during the weekend (ie, after 1:00 pm on Saturday), they are entitled to an additional 100% payment.

    In no event employees may work overtime more than 30 hours per month or 200 hours per calendar year.

    Wages

    Mandatory minimum wage is AR$9,500 as of January 1, 2018, and will be increased to AR$10,000 as of July 1, 2018.

    Vacation

    Employees are entitled to a minimum and continued period of paid annual vacations of:

    • 14 calendar days when seniority does not exceed 5 years
    • 21 calendar days when seniority is 5 to up to 10 years
    • 28 calendar days when seniority is 10 to up to 20 years
    • 35 days when seniority exceeds 20 years

    Sick leave & pay

    Employees with less than 5 years' seniority are entitled to leave due to non-work-related accidents or diseases for up to 3 months, and 6 months if they have longer seniority, fully paid by the company. For employees with family dependents, the period during which those employees are entitled to payment may be extended to 6 or 12 months, respectively.

    Maternity/parental leave & pay

    Female employees are prohibited from working during the 45 days preceding childbirth and up to 45 days thereafter. The employee may take a shorter leave before birth no less than 30 days, in which case the leave period following childbirth will be 60 days. In case of premature childbirth, the leave not taken before childbirth is added to the period after childbirth to complete the 90 days. During the maternity leave, the Social Security Authorities pay the employee a family allowance equal to her regular monthly salary.

    Fathers are entitled to 2 days paid leave due to the birth of a child.

  • Discrimination

    The law prohibits any discriminatory practice based on race, religion, nationality, ideology, political affiliation, union membership and sex, as well as economic standing, social condition and/or physical characteristics.

  • Benefits & pensions

    Employees must be enrolled in the Argentinean Social Security System, which provides for old age pension and disability benefits, and mandatory health coverage.
    Upgrading to a private health plan can be granted by the employer as an additional benefit.

  • Data privacy

    The employer may collect such employee data necessary to comply with labor and social security mandatory records. In order to transfer personal data cross-border, consent of the employee must be obtained.

    Nobody must be obligated to reveal sensitive data (that is, information revealing racial or ethnic origin, political opinion, religious, philosophical or moral beliefs, trade union membership, or information related to health or sex life).

    Monitoring an employee's work device is allowed, provided the employee is duly notified in advance, and personal information is safeguarded and not disclosed.

  • Rules in transactions/business transfers

    There is no obligation to notify or get approval from the labor authorities or unions before asset or share deals.

    Seller and buyer shall be jointly and severally liable regarding existing labor and social security obligations on the transfer date.

    Employment terms and conditions cannot be detrimentally altered as a result of the transfer.

  • Employee representation

    As a general rule, only the most representative union in each activity has the ability to execute CBAs. There are various industry-wide CBAs, eg, trade and commerce, metallurgy, truck drivers, oil and gas, etc. CBAs usually exclude white-collar employees. Employees can freely join unions. The employer will apply the CBA corresponding to its main activity, and to those employees included in it.

    There are no works councils. However, union representatives (employees' delegates) can be appointed.

  • Termination

    Grounds

    The employer is allowed to terminate employment contract for cause, but the law does not establish specific causes. It depends on the employer's discretion, but Labor Courts usually interpret in a restrictive way the causes invoked by the employers for dismissing employees for cause.

    In general terms, the employer can terminate employees without cause, but must pay the statutory severance payment.

    Who is subject to termination laws

    All employees.

    Prohibited or restricted terminations

    Female employees have additional protections (special indemnifications) due to maternity, pregnancy or marriage. Termination within the 7.5 months prior and after birth is presumed to be due to maternity, shifting the burden of proof back to the employer.

    Union representatives cannot be terminated without cause.

    Employees under sick leave may not be terminated.

    Third-party approval for termination/termination documents

    In general terms, third party approvals for termination are not required.
    In case of conflict, a settlement putting an end to the dispute can be executed before the labor authorities (ie, Ministry of Labor or Labor Courts). Only releases executed before the Ministry of Labor or before Labor Courts are enforceable.

    Mass layoff rules

    Where mass redundancies on the grounds of economic causes are planned, the employer will be required to follow a preventive crisis procedure (PCP) before the Ministry of Labor, aimed at reaching an agreement with the relevant union.

    Typically, this does not apply if the employer terminates employees without cause, unless there is a strong union presence within the company, which attempts to invoke the PCP proceedings.

    A PCP is triggered when redundancies involve the following numbers of affected employees:

    • 15% of employees in companies with fewer than 400 employees
    • 10% of employees in companies of 400 to 1000 employees
    • 5% of employees in companies with more than 1000 employees

    Notice

    Applicable notice periods depend on seniority as follows:

    • Less than 3 months (within the probationary period) = 15 days' notice
    • More than 3 months – less than 5 years = 1 month's notice
    • More than 5 years – 2 months' notice

    Statutory right to pay in lieu of notice or garden leave

    Payment in lieu of notice and garden leave are permitted.

    Severance

    When terminating (without cause) an indefinite-term employee, statutory severance payment must be paid; basically, equal to the highest monthly salary recieved during the last year times years of service (or fraction higher than 3 months). Basis of calculation may be subject to certain limits.

    An employee under a fixed-term contract of 1 year (or more) must be paid with 50% statutory severance payment at expiration. Termination in advance of the agreed term, may make employer liable for paying statutory severance payment plus remaining salaries until the end of the term.

    Temporary contracts do not involve statutory severance payment at termination, except in case of termination in advance to the agreed term or before completing the contract purpose.

  • Post-termination restraints

    There are no specific provisions in Labor Law on this regard. However, as the National Constitution grants to everyone the right to freely work, post-termination restraints are restrictively interpreted.

    Non-competes

    There are no specific regulations for non-competition after employment termination. In general terms, they are accepted provided sufficient consideration is given (which is undefined, but usually assumed to be 60-70% of the compensation), and for a limited period of time. However, confidentiality duties shall be observed even after employment termination.

    Customer non-solicits

    There are no specific regulations for customer non-solicitation after employment termination. In general terms, they are accepted provided sufficient consideration is given and for a limited period of time. However, confidentiality duties shall be observed even after employment termination.

    Employee non-solicits

    There are no specific regulations for employees non-solicitation after employment termination. In general terms, they are accepted provided enough consideration is given and for a limited period of time.

  • Waivers

    Only enforceable in the context of a settlement before the labor authorities (Ministry of Labor or Labor Courts).

  • Remedies

    Discrimination

    Discrimination can trigger additional compensations subject to Labor Courts discretion.

    In certain cases (eg, employees acting as "de facto" union representatives), Labor Courts have ordered to reinstate employee (same protection given by the Union's law to those representatives duly appointed).

    Unfair dismissal

    Unfair dismissal just triggers statutory severance payment, except in those cases for which the Law states a special protection (eg, pregnant employees, union representatives). Pregnant employees can demand additional compensation, and union representatives can demand additional compensation or reinstatement.

    Failure to inform & consult

    Not applicable.

  • Criminal sanctions

    In general terms, violation of employment laws does not entail criminal sanctions (except those related to serious acts such as child labor, evasion of tax and social security obligations, etc.).

  • Key contacts
    Osvaldo Jofre
    Osvaldo Jofre
    Cordova Francos [email protected]

Criminal sanctions

Argentina

In general terms, violation of employment laws does not entail criminal sanctions (except those related to serious acts such as child labor, evasion of tax and social security obligations, etc.).

Australia

There are criminal sanctions for breach of relevant work health and safety laws. The Queensland and South Australian labor hire licensing laws provide for terms of imprisonment in respect of some breaches.

Austria

Criminal sanctions are not generally a concern.

Bahrain

Criminal sanctions can be imposed for a variety of reasons, including but not limited to the breach of health and safety obligations, breach of immigration laws, breach of data protection laws and breach of confidentiality.

Belgium

Most legal dispositions with regard to labor law are subject to criminal or administrative sanctions in case of breach.

Brazil

Violation of employment laws and discrimination can trigger criminal sanctions.

Canada

The main areas where criminal sanctions arise are under occupational health and safety legislation and related Criminal Code provisions. Both employees and directors can be subject to criminal sanctions.

Chile

Not applicable for this jurisdiction.

China

Limited circumstances, such as failure to pay salary in bad faith, may result in criminal sanctions.

Colombia

Employees may be subject to criminal sanctions if they do not honor their non-disclosure or confidentiality agreements.

Employers may be subject to criminal sanctions if they perform actions to reduce enrollment to unions or to discourage such enrollment. 

Czech Republic

Illegal employment of foreigners may under limited circumstances constitute a criminal offence.

Denmark

Non-compliance with employment law can lead to criminal sanctions. Examples include employing a person without a valid work permit, failing to report and pay holiday pay, reading private emails, disclosure of trade secrets, breach of anti-discrimination provisions and failure to inform and consult in relation to collective redundancies, or business transfers.

Apart from fines relating to a breach of the rules on work permits and to the lack of reporting and paying of holiday pay, criminal sanctions related to employment legislation are very rarely seen.

Finland

Typically employers face criminal prosecution in connection with alleged discrimination, or where breach of occupational health and safety obligations has caused damage to an employee, or if the employer hasn't complied with working hours regulations. Failure to comply with the Employment Contracts Act or with consultation obligations in connection with the transfer of an undertaking can also be sanctioned with a criminal fine.

France

Yes (eg, for discrimination, harassment, offense of obstruction, or where an employee is discovered undertaking "concealed" work).

Both the company's representative and the company as a legal entity can be held criminally liable.

Germany

Significant frequent violation of works council information and consultation rights could lead to criminal charges; however, this rarely occurs.

Hong Kong

The provisions of the EO are enforced, first by criminal law sanctions (where the usual penalty is a fine, except for payment-of-wages offenses, which can give rise to a sentence of imprisonment), and secondly, by way of civil remedies at the instance of the aggrieved employee. Further, in some instances, liability can be passed to the individual decision-maker of the employing company.

Hungary

Not applicable for this jurisdiction.

India

Sanctions for violating labor statutes include both imprisonment and fine. The extent of such penal provisions will depend on the statute and the nature of the breach.

Indonesia

Imposed on employers who breach the Manpower Law, including where employers participate in anti-union activity; intentionally and without any rights or illegally access computers and/or electronic systems owned by somebody else for the purpose of obtaining electronic information and/or electronic documents; violate workplace health and safety regulations; fail to submit written annual reports on their industrial relations to the Minister of Manpower; or fail to pay overtime due.

Ireland

Failure to notify the Minister for Business, Enterprise and Innovation about mass layoffs is a criminal offense (although prosecution is rare). Employing a non-EEA or Swiss national without the required work permit is also a criminal offense. 

Israel

Failure to comply with various labor laws (such as minimum wage, work hours, unlawful discrimination and prohibited termination) is a criminal offense and may result in criminal proceedings (at least in theory).

Italy

None. Under certain circumstances, failure to fulfill a court decision can lead to criminal liability.

Japan

Some violations are subject to criminal sanctions. For example, violations of the worker dispatch law or failing to pay wages (including overtime allowances) may result in criminal sanctions.

Kenya

Although criminal sanctions are not a general concern in employment and labor practices, failing to comply with the provisions of the labor laws is punishable in a court of law either by imprisonment or fines.

Kuwait

Criminal sanctions can be imposed for a variety of reasons, including but not limited to the setting up of a trade union, breach of health and safety obligations, breach of immigration laws, breach of data protection laws and breach of confidentiality.

Luxembourg

Some of the mandatory labor law rules are criminally punishable by fines and/or imprisonment, notably:

  • Publishing a job offer without informing the Administration of Employment (ADEM)
  • Hiring an employee without arranging a compulsory medical examination
  • Hiring an employee from outside the EEA without authorization
  • Paying wages below the minimum social wage
  • Failing to comply with the rules on paid leave
  • Failing to comply with the rules on public holidays

Malaysia

None specific to employers.

Mexico

Employees may be subject to criminal sanctions if they do not honor their non-disclosure agreement.

Employers may be subject to criminal sanctions if they pay to their employees less than the minimum wage, or employ children under 15 years old.

Morocco

Ranges from fines (up to €30,000) to the closure of the company.

Mozambique

Possible, but separate from labor process.

Myanmar

If any employer fails to sign an employment contract, it can be punished with imprisonment for not more than 6 months, a fine, or both.

If anyone violates any matters contained in an employment contract, he/she shall be punished with imprisonment for not more than 3 months, a fine, or both.

Employers or employees may be criminally liable for certain violations and subject to a fine, imprisonment, or both.

Netherlands

Criminal sanctions are not generally a concern.

New Zealand

Generally, none. However, there are criminal sanctions for breach of relevant health and safety laws.

Nigeria

Criminal sanctions are not applicable.

Norway

Willful or negligent breach of the Working Environment Act by the proprietor, employer or person managing the undertaking in the employer's stead is liable to a fine, imprisonment up to three months, or both. In particularly aggravating circumstances, the penalty may be up to two years' imprisonment. This does not apply to breach of provisions regarding appointment and termination.

Oman

Criminal sanctions can be imposed for a variety of reasons, including but not limited to breach of health and safety obligations, breach of immigration laws, breach of data protection laws and breach of confidentiality.

Philippines

Criminal penalties may be imposed for violations of the Labor Code of the Philippines and relevant Special Laws as provided therein, such as but not limited to: illegal recruitment, sexual harassment, child labor, non-remittance of SSS, PhilHealth, and Pag-Ibig contributions, and violations of collective bargaining agreements amounting to unfair labor practices.

Poland

An employer may be fined from PLN 1,000 to 30,000 for committing offenses specified in the Polish Labor Code which relate to the employer's basic obligations.

Portugal

There are criminal sanctions related to employment issues such as improper use of child labor, violation of the autonomy or independence of trade unions, discriminatory acts, disobedience to the labor authority, fraud in respect of withholding taxes or social security contributions.

Generally, legal persons will be held criminally accountable for felonies committed by their legal representatives and de facto or de jure administrators in their name or on their behalf and to their benefit.

Qatar

Criminal sanctions can be imposed for a variety of reasons, including, but not limited to, the breach of health and safety obligations, breach of immigration laws, breach of data protection laws and breach of confidentiality.

Romania

Infringement of health and safety rules can lead to criminal sanctions (where human life has potentially been put in jeopardy). Criminal liability is also triggered in cases of repeated breach of the obligation to pay minimum salary or repeated refusal to permit labor inspectors access to any of the company's locations, or to provide them with requested documentation, etc.

Russia

Criminal sanctions are not generally a concern for employers acting as legal entities.

Saudi Arabia

Not generally a concern under Saudi Labor Law.

Singapore

Criminal sanctions include fines or imprisonment for offenses under the EA (or other applicable statutes). Offenses under the EA include: wrongful detention of an employee by the employer after a contract of services have been determined; obstructing an employee appearing before an inquiry held by the Commissioner; fraudulently inducing an employee to emigrate out of Singapore to work; entering into prohibited contracts of service; failure to pay salary as stipulated; and employment of children under 12 years of age.

Any director, manager, secretary or other officer of the company may also be charged with the same offense and punished upon conviction, if it can be shown that the offense is committed with the consent or connivance of any act or default of such persons.

Slovak Republic

Non-payment of wages or severance pay may be punished by a prison sentence of up to 12 years, depending on the circumstances of and motive for the non-payment, and on the damage caused.

South Africa

Employment law is largely de-criminalized; however, specific legislation renders some behavior a criminal offense. For instance, disclosure of the private information of employees to third parties is an offense.

South Korea

If the ruling of unfair dismissal is finalized by the court and the employer does not comply with the reinstatement order from RLRC, the employer may be subject to an imprisonment of up to 1 year or a criminal fine of up to 10 million KRW.

Spain

There are criminal sanctions related to employment issues, such as those linked to work-related accidents and social security fraud.

Generally, legal persons will be held criminally accountable for the felonies committed in their name or on their behalf, and to their benefit, by their legal representatives and de facto or de jure administrators. Legal persons will also be criminally accountable for the felonies committed when perpetrating the corporate activities, and on account, and to the advantage, thereof.

Sweden

An employer who intentionally or negligently fails to comply with an order or prohibition issued by the Swedish Work Environment Authority pursuant to certain regulations may be fined or sentenced to imprisonment for a maximum of 1 year.

Switzerland

Failure to comply with health and safety legal requirements; undeclared or illicit work; sexual and psychological harassment.

Taiwan

Not a concern.

Thailand

LPA and LRA both provide criminal sanctions including penalties of both fine and imprisonment. Further, in some instances, liability can be passed to the director of the employing company.

Turkey

Criminal sanctions are not generally a concern, except in cases such as sexual harassment or an occupational accident.

Uganda

Violation of certain provisions of the Employment Act can trigger criminal sanctions. For example a person who records or causes to be recorded wrong, inaccurate or deficient information in an employee's records of service with an intention to defraud the employee or employer or any public authority, or who acts to conceal such fraudulent acts, commits an offense, as does an employer or employee who fails, without justifiable cause, to reply to a labor officer's written request for information within a period of 14 days from the time the request was received by the employer or the employee, as the case may be.

Ukraine

Ukrainian labor law provides for the following categories of liability for violations of the labor law:

  • Financial penalties of up to approx. US$13,000
  • Administrative fines for violations of the Code of Administrative Offenses
  • criminal sanctions, including imprisonment, for company officers for gross violations of labor laws (eg, intentional and unjustified failure to pay salary for a period exceeding one month)

United Arab Emirates

Criminal sanctions can be imposed for a variety of reasons, including but not limited to the setting up of a trade union, breach of health and safety obligations, breach of immigration laws, breach of data protection laws and breach of confidentiality.

United Kingdom

Failure to notify the Secretary of State about mass layoffs is a criminal offense. Prosecution is fairly rare, but there has been an upward trend in prosecutions in recent years. Otherwise, criminal sanctions are not generally a concern.

United States

Employers may be criminally liable for certain violations of wage and hour laws. In limited circumstances, employers may be vicariously liable for the criminal acts of their employees. Employers may be liable for monetary statutory penalties (such as double or treble damages) for violations of wage and hour and other laws.

Venezuela

Failure to comply with the mass layoff requirements or administrative decisions of reinstatement and back pay may result in imprisonment from 6 to 15 months. In practice, prosecution is not common.

Vietnam

Employers may be criminally liable for certain violations, such as unlawfully dismissing an employee or using force or threats which cause an employee to resign, and subject to a fine, imprisonment, or both.