Labor Modernization Law in Argentina: A Strategic Guide for Companies

The Labor Modernization Law in Argentina (Law 27.802)

The Labor Modernization Bill (law 27802) is the protagonist of this high-impact legal news, modifying relevant aspects of labor contracting in Argentina.

On March 6, 2026, the National Executive Power issued Decree 136/24, enacting Law 27,802 on labor modernization. On the same date, the regulation was published in the Official Gazette (Boletín Oficial).

Please see below some of the most relevant aspects:

Changes in Employment Seniority: Previous service with the same employer

The Modernization Law introduces a fundamental change: in the event of re-employment, if two years have elapsed between the termination of employment and the re-hiring by the same employer, the seniority from the previous period of service will not be computed.

Presumption of labor relationship

The presumption of the existence of an employment contract does not apply to contracts for works, professional services, trades provided that the corresponding receipts or invoices are issued, or payment is made through banking systems.

Contracting, Subcontracting, and Delegation: Additional control requirements but limited liability

Those who partially or totally assign the establishment or operation to others, or who contract or subcontract work or services corresponding to the usual and specific activity of the establishment within its scope, must require from their assignees, contractors, or subcontractors:

• (i) the tax number (“CUIL”) of each worker providing services;
• (ii) proof of monthly payments to social security subsystems (payroll taxes);
• (iii) proof of payment of remuneration;
• (iv) information on an account in the worker’s name where they receive their remuneration;
• (v) insurance for workers’ compensation coverage against work related accidents and hazards (ART), with an endorsement clause in favor of the contracting party or principal.

The amendment expressly excludes activities that are ancillary or supportive to the main activity.

Employment Certificate: Extended deadline and simplified delivery

The delivery period is extended. Employment certificates must be delivered within 45 business days from the termination of the employment contract.

The obligation is fulfilled when the employer makes the certificates available to the employee in:

• (i) physical format at the company’s headquarters;
• (ii) digital format that allows for reliable proof of delivery;
• (iii) when the information is available to the worker on the Social Security or ARCA (tax authority) website.

Salary Payment

Wages are paid in money, whether in national or foreign currency. The following supplementary benefits do not constitute salary:

• Profit-sharing or earnings distribution systems, stock rights for the collection of dividends, or the realization of shares or securities granted by the employer during the contract. Commercial law regulations must be considered.
• Travel allowances substantiated by receipts for the use of public passenger transport to and from the workplace.
• Bailment (comodato) of a house or room provided by the employer located in complexes surrounding the workplace.
• Expenses for the use of mobile phone and internet for work purposes.

Fractioning of Vacations

The employer and employee may agree to split the vacation period into installments of no less than seven (7) days.

Overtime

Both parties may voluntarily agree on a compensation system for overtime. It must be formalized in writing:

• A system of overtime, hour banks, or compensatory time off may be established.
• It may also be agreed upon with the union representation within the company.
• Minimum legal rest periods must be respected.

Dismissal: Severance. Seniority payment

For the calculation of seniority severance payment (indemnización por antigüedad), non-monthly concepts such as the Statutory Annual Bonus or 13th. salary (SAC/Aguinaldo), vacations, and bonuses that are not paid monthly have no impact.

For the payment of seniority severance, employers may opt to:

1. Establish a labor termination fund or system, the cost of which shall always be borne by the employer;
2. Labor assistance funds;
3. The labor termination fund or system may or may not include Labor Assistance Funds.

Labor Assistance Fund (FAL)

The purpose of the FAL is subject to future regulation:

• Its purpose is to assist in the fulfillment of severance obligations.
• The FAL will provide coverage for registered workers with a seniority of no less than 12 months from the date of termination of the employment contract.
• The FAL will not provide coverage to unregistered workers.
• The FAL does not modify, replace, or alter the severance pay regime.
• The FAL will be administered by the National Securities Commission (“CNV”) and will be financed with contributions from ANSES.

Employer contributions: 1% monthly for large companies and 2.5% monthly for Medium and Small Companies (Pymes).

 

Conclusion: Towards Efficient and Secure Labor Management

The Labor Modernization Law represents a paradigm shift in employment relations in Argentina. For companies, this is not just a regulatory update but a strategic opportunity to optimize hiring processes, reduce the impact of potential penalties, and significantly improve legal security in daily operations. However, successfully implementing these changes requires a technical and specialized vision to prevent future litigation and adapt to the specific needs of each industrial or commercial sector.

At Analía Durán Abogados, we believe that prevention is the most effective cost-saving tool for any business. It is not merely about knowing the law, but about applying it strategically to shield your human and corporate capital.