If you want to hire staff in Argentina but do not have a local legal entity, a Professional Employer Organization is the best alternative to support your expansion.
Argentina is the eighth-largest country in the world with a highly productive economy, liberal trade policies, abundant energy resources and a wide range of industrial sectors. Several policies and agreements have been created to stimulate foreign investment and business activity, which added to the many reasons to do business in Argentina.
Recruitment opportunities are increasingly attractive to foreign companies: the population is highly educated, with a literacy rate of 98%. Many citizens are bilingual, and student enrolment is growing each year.
Before establishing a local business or branch in Argentina, many companies like to “test” the local market. A Professional Employer Organization (PEO) solution is an excellent way to do this as it allows companies to hire staff in Argentina without a local legal entity.
Hire staff in Argentina through a Professional Employer Organization (PEO)
A Professional Employer Organization (PEO), also known as a ‘Registered Employer’ or ‘Employer of Record’, is an organization that provides and supports companies with their human resources functions, from the early stages of recruitment to the payment of taxes and benefits. PEOs undertake the fundamental and time-consuming tasks of human resources teams, allowing companies to focus on the growth and success of their business.
The services of a PEO are particularly useful when businesses seek to hire a local workforce but do not wish to establish a local legal entity. Simply put, a PEO makes it easy to hire staff in Argentina through an outsourced provider.
The most common services provided by PEO companies include:
- Payroll processing
- Manage the paperwork for hiring new employees
- Ensure compliance with local labor law regulations
- Manage employee benefits and health insurance plans
- Managing workers’ compensation and retirement savings plans.
Benefits of using a PEO to hire staff in Argentina
A PEO will allow your company to focus on the development of your business and maintain direct control of your employees, while human resource loads are outsourced to a PEO.
Key advantages to this process include:
- Profitability: Reduces administrative and recruitment costs and saves you money if you want to hire local staff but do not have a fully incorporated company or branch.
- Recruitment: Helps you find the most suitable and qualified personnel for your company.
- Saves time: Eliminates the need to carry out the time-consuming and fundamental tasks of payroll processing and other human resource administration.
- Local expertise: PEOs ensure that you comply with all Argentine labor laws and regulations.
Executives of foreign companies who intend to expand to Argentina should first consider the fundamental labor laws and regulations, and how they plan to regularly comply with them. Companies must guarantee 100% compliance with legal requirements before entering into an employment relationship in Argentina. For those experiencing a language barrier or whom have a lack of knowledge and understanding of local labor regulations, hiring staff in Argentina through a PEO may be the best way to reduce risk of non-compliance and support your growing business with expert guidance.
Recruitment in Argentina
The following is a summary of the most useful aspects of the Argentine Labor Law, as determined by the Constitution and as established in the Labor Contract Law (Law 20,744):
Type of employment contracts
If you want to hire staff in Argentina, keep the following types of employment contracts in mind:
- Contracts of indefinite duration: there is no legal requirement to have an agreement in writing. However, it is still recommended to sign a contract in order to clarify the terms and conditions of the employment relationship.
- Fixed-term contracts: It is mandatory to have a written employment contract. The period of service cannot exceed five years.
- Part-time / temporary contracts: A written employment contract is required.
- Foreign workers: There are no restrictions on hiring foreign employees to join a company’s workforce.
- Termination of employment: Employment contracts with an indefinite term have an initial trial period of 3 months and a 15-day notice is required from either party if they wish to terminate the contract.
For all employment contracts, the same 15-day notice is required if the employee wishes to terminate the contract. However, if the employer wishes to terminate the contract, the notice period increases with the length of the employee’s service.
For example, employees who have worked for less than three months should only be given 15 days’ notice. Employees who have worked for more than five years must receive two months’ notice from their employer.
The maximum notice period that small businesses must give employees is one month. Regardless of the type of employment contract, if no notice is given, the employee is entitled to compensation.
Key employee benefits and rights in Argentina
When hiring staff in Argentina, you must understand and comply with the country’s labor regulations (including, but not limited to):
Working hours: A working week can be a maximum of 48 hours, with a maximum of 8 hours per day.
Overtime: In addition to managers and directors, all employees may receive overtime pay. Any additional hours of work that exceed the maximum working day are paid in overtime: employees are entitled to their salary plus an additional 50% for overtime Monday through Friday and 100% for additional hours on weekends. Overtime cannot exceed 30 hours per month / 200 hours per year.
Paid holidays: Varies from 14-35 consecutive days. Employees who have worked for more than 6 months are entitled to 14 consecutive days of paid vacation. This figure increases with the number of years worked in the company. For example, 21 consecutive days are granted to employees who have served between 5-10 years.
Bonuses: Employees receive 2 installments of an annual bonus, known as the thirteenth salary (Saldo Anual Complementario (SAC) or “Aguinaldo”), and equivalent to 50% of their best monthly salary, within the most recent 6-month period. The first installment is paid on June 30 and the second on December 18.
Maternity leave: Employees are entitled to 90 days of maternity leave, 45 days before and 45 days after the birth.
Sick leave: Employees who have worked up to 5 years are entitled to full compensation (equivalent to their salary), for a maximum of 3 months of sick leave per year. The amount of sick leave granted to employees increases with the number of years of service.
Hire staff in Argentina through a PEO solution
Argentina is a country where business opportunities abound, and it is an increasingly attractive jurisdiction for doing business. Argentina’s workforce is competitive, educated and skilled. If you want to hire staff in Argentina but do not have a locally incorporated entity and want to avoid the HR administrative burden, then a PEO provider may be the perfect solution, both from a business and financial growth perspective.
At Biz Latin Hub, our PEO and payroll specialists are prepared to support your growing business by offering key human resources and recruitment solutions to hire staff in Argentina. Let us take care of your hiring needs and remove the burden of understanding and complying with local employment regulations from your team.
Please contact our bilingual team in Argentina for more information on how we can help you throughout the recruitment and hiring process in Argentina.
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