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11. Employee Benefits

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Argentina

11. Employee Benefits

Social Security

All employees are covered by a national retirement pension scheme, funded through mandatory contributions by both employer and employee. It is paid by the employee through withholdings of their gross salary and by the employer through fixed contributions, with each calculated as a percentage of the employee´s salary. Employees are eligible for retirement and collect governmental pension when they reach retirement age (65 years for men and 60 years for women) and have made contributions to this system for 30 years. Employers can only compel employees to retire when they reach 70 years old, and have made contributions to this system for 30 years.

Healthcare and Insurances

Healthcare schemes exist for all employees, entitling them to free medical treatment and hospital care. These are funded through employer contributions and employee withholdings, both a percentage of the employee´s salary.  Employers must obtain a mandatory insurance that covers the employee’s death, illness or disability in connection to work. Employers must secure insurance contracts through authorised insurance companies. Such entities are obliged to provide financial and medical assistance to the injured employees. For this provision and coverage, the employer must pay a monthly contribution. Only accidents in connection with labour duties, and a restricted list of occupational diseases, are covered by this insurance. During the period that insurance aid is provided, the worker is entitled to receive medical assistance and medications, prosthesis and orthopedic items, if required. Burial expenses are also included. The employer must also provide mandatory life insurance for his employees, payable by the employer through monthly contributions. Keep in mind that applicable collective bargaining agreements might set forth other additional insurances.

Required Leave

A. Holidays and Annual Leave

Employees are entitled to an annual paid vacation period. Vacations are compulsory and the employer must grant them between 1 October and 30 April, as follows:

  • up to 5 years of service: 14 calendar days
  • between 5 and 10 years of service: 21 calendar days
  • between 10 and 20 years of service: 28 calendar days
  • over 20 years of service: 35 calendar days

The parties may always agree to a longer period than the one provided by law, but may not agree on a shorter period.

National holidays must be observed, and the corresponding salary should be paid at twice (2x) the rate, whenever services are actually performed during those days.

B. Maternity and Paternity Leave

Female employees are entitled to 90 days’ paid maternity leave. This is usually taken in the 45 days before giving birth and the 45 days afterwards. However, the employee can instead choose to take 30 days’ leave before giving birth and 60 days’ leave afterwards. Leave is paid by the social security system as a family allowance. Female employees can request additional unpaid leave between three and six months. While a newborn baby is breastfeeding, a female employee can take two, half-hour periods a day to feed her baby, for up to one year after the birth. Paternity leave is 2 days.

C. Sickness and Disability Leave

In the event of sickness leave or injury related to work, the employer must pay the employee’s salary for the first fifteen days. After the fifteenth day, the working insurance company will pay the sick leave to the employee. In respect to accidents or illnesses not related to work, employees who have served for up to 5 years are entitled to 3 months of paid sick leave. If the employee has a family, the paid sick leave is 6 months. For those employees who have served for more than 5 years, the paid sick leave is 6 months and if the employee has a family, the paid sick leave is 12 months. These paid sick leaves, since they are not related to work, are not covered by any insurance nor by the government, and are paid by the employer. The employer is entitled to require the employee to submit to an examination by a medical doctor, appointed by the employer, to verify that the employee is actually ill and in no condition to work. Once the paid sick leave term has lapsed, in case the employee is not able to return to work, the employer is obliged to keep the employee on its payroll as in leave, but without paying any salary to him/her for up to twelve more months.

If, during that term, the employee is found to have a permanent disability that prevents him from being able to perform the same work, the employer is obliged to give him work in accordance with his disability. If the employer can prove that he is not able to provide the employee with work in accordance with the employee’s disability, the employer can terminate the employment by paying 50% of the severance compensation as provided in a dismissal without justified cause, and must pay 100% in case of total permanent disability.

D. Any Other Required or Typically Provided Leave(s)

Argentina’s labour laws also provide leaves of absence on the grounds of marriage (10 days), mourning (3 days) or educational examinations (2 days per exam and up to 10 days per year). Applicable collective bargaining agreements usually provide for other leaves or additional days of leave.

Pensions: Mandatory and Typically Provided

Employees are entitled to collect a mandatory pension when they reach retirement age (65 years for men and 60 years for women) and have made contributions to this system for 30 years. Employers can only compel employees to retire when they reach 70 years old, and have made contributions to this system for 30 years.

  • Other Required Or Typically Provided Benefits

Employees under a collective bargaining agreement for commercial activities, are entitled to a retirement insurance.

Any questions

Ask our member firm Allende & Brea in Argentina