In a major step towards achieving greater flexibility in Argentine labor legislation, the labor modernization bill proposed by the government, originally discussed by the Senate, was approved by Deputies. Even though the final debate in the Senate remains (after certain modifications to the original bill), the government aims for the law to come into force as of March.

We highlight the most relevant modifications contained in this labor reform.

• Presumption of employment relationship: this shall not apply to contracts for professional services or any other services without a relationship of dependency and where invoices are issued.it
• Labor registration: a unified and digital labor registration system is established in charge of the tax authority
• Basis for calculating seniority compensation: the caps provided for in collective bargaining agreements remain in place, but the text of the law includes the 67% cap created by case law for cases of disproportion between the agreement cap and the employee’s actual salary. Thirteenth salary, vacation pay, and non-recurring bonuses are excluded from the calculation of the best monthly, normal, and usual remuneration. Regarding variable items (monthly bonuses, overtime, commissions), the average of the last six months or the last year shall apply, whichever is more favorable to the worker.
• Creation of the Labor Assistance Fund (FAL): system intended to cover labor contingencies and severance pay. It provides for a monthly...

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