Summary of the new proposed labor reform

[Uncle Wong]

According to the latest news, all "sick leave"- related changes have been dropped due to strong opposition. I do not know the "sick leave" rules here, but there are standard payroll rules worldwide, and I am not sure why this is a controversial topic here. Is there anyone who knows (not speculates), who can enlighten us here? I am genuinely curious.

Based on what my friend told me the sick leave rules here are a total joke. As long as you get a doctor to sign a letter you can take off. Obviously with the fraud and abuse, you can pay any doctor to sign whatever note you want.

 

[bapal]

Based on what my friend told me the sick leave rules here are a total joke. As long as you get a doctor to sign a letter you can take off. Obviously with the fraud and abuse, you can pay any doctor to sign whatever note you want.

But is there a limit on the number of sick leave days you can take in a year? That's the usual practice everywhere: you are entitled to X paid sick days per year. But it seems there is no such limit here and hence the problems? I do not know.

 

[Wally]

But is there a limit on the number of sick leave days you can take in a year? That's the usual practice everywhere: you are entitled to X paid sick days per year. But it seems there is no such limit here and hence the problems? I do not know.

@bapal In Argentina, sick leave rules are set by the Labor Contract Law (Ley de Contrato de Trabajo).

• Employees are entitled to paid sick leave if they are unable to work due to illness or accident.
• The length of paid leave depends on seniority and dependents:
  
  • Up to 5 years of service
    
    • 3 months paid sick leave (no dependents)
    • 6 months (with dependents)
  • More than 5 years of service
    
    • 6 months (no dependents)
    • 12 months (with dependents)
• During this period, the employer pays the salary.

After that period:

• The job must generally be kept open for another year without pay.
• If the employee still cannot return, the contract may be terminated under specific rules.

The reason why this is a MUST to change the laws is because Employers in Argentina pay the full salary during sick leave.

• There is no universal insurance system covering short-term sickness (as in Chile, Brazil, or parts of Europe).
• That makes it a direct cost to companies, especially small businesses.

The unions don't want to change because they view sick leave protections as a core worker right. The problem is employees always lie about being sick. It's very easy to get a doctor to forge a letter.

---

 

[ben]

@bapal In Argentina, sick leave rules are set by the Labor Contract Law (Ley de Contrato de Trabajo).

• Employees are entitled to paid sick leave if they are unable to work due to illness or accident.
• The length of paid leave depends on seniority and dependents:
  • Up to 5 years of service
    • 3 months paid sick leave (no dependents)
    • 6 months (with dependents)
  • More than 5 years of service
    • 6 months (no dependents)
    • 12 months (with dependents)
• During this period, the employer pays the salary.

After that period:

• The job must generally be kept open for another year without pay.
• If the employee still cannot return, the contract may be terminated under specific rules.

The reason why this is a MUST to change the laws is because Employers in Argentina pay the full salary during sick leave.

• There is no universal insurance system covering short-term sickness (as in Chile, Brazil, or parts of Europe).
• That makes it a direct cost to companies, especially small businesses.

The unions don't want to change because they view sick leave protections as a core worker right. The problem is employees always lie about being sick. It's very easy to get a doctor to forge a letter.

---

Insane how terrible employers had it. No wonder no international companies want to come to Argentina with those crazy laws and taxes.

Milei government targets end of month for labour reform approval | Buenos Aires Times

 

[bapal]

@bapal In Argentina, sick leave rules are set by the Labor Contract Law (Ley de Contrato de Trabajo).

• Employees are entitled to paid sick leave if they are unable to work due to illness or accident.
• The length of paid leave depends on seniority and dependents:
  • Up to 5 years of service
    • 3 months paid sick leave (no dependents)
    • 6 months (with dependents)
  • More than 5 years of service
    • 6 months (no dependents)
    • 12 months (with dependents)
• During this period, the employer pays the salary.

After that period:

• The job must generally be kept open for another year without pay.
• If the employee still cannot return, the contract may be terminated under specific rules.

The reason why this is a MUST to change the laws is because Employers in Argentina pay the full salary during sick leave.

• There is no universal insurance system covering short-term sickness (as in Chile, Brazil, or parts of Europe).
• That makes it a direct cost to companies, especially small businesses.

The unions don't want to change because they view sick leave protections as a core worker right. The problem is employees always lie about being sick. It's very easy to get a doctor to forge a letter.

---

I am absolutely flabbergasted reading this. Till now, I thought it was just the taxes and economy that were pushing foreign companies away from investing in Argentina, but with such laws (and more), I now know it is insanely expensive for companies to do business and maintain offices here.

Just insane! Are there examples of other countries with similar rules? I never heard of such paid leave rules.

 

[Betsy Ross]

I am absolutely flabbergasted reading this. Till now, I thought it was just the taxes and economy that were pushing foreign companies away from investing in Argentina, but with such laws (and more), I now know it is insanely expensive for companies to do business and maintain offices here.

Just insane! Are there examples of other countries with similar rules? I never heard of such paid leave rules.

Argentina is in its own league. Why do you think there are economic hurricanes here every few decades? This is only one example of things not working here. Why do you think foreign companies are racing to exit now even with Milei. The tax situation is worse. My friends that own companies here tell me that if you add up all the legal taxes that a company has to pay there is no way any of them can make any money if they are all 100% legal. I don't know if this is true or not because I have never owned a company here but everyone complains about it.

 

[earlyretirement]

I am absolutely flabbergasted reading this. Till now, I thought it was just the taxes and economy that were pushing foreign companies away from investing in Argentina, but with such laws (and more), I now know it is insanely expensive for companies to do business and maintain offices here.

Just insane! Are there examples of other countries with similar rules? I never heard of such paid leave rules.

@bapal,

It is as bad as others say. I've owned several SRL and SA's in Argentina. I've been on the Board of Directors of several companies. It's a brutal place to do business. Besides the taxes and crazy labor laws you have to deal with wicked inflation. I remember a large company that I had with 150 employees and my salaries were doubling every 3 years.

Almost every employee is part of some union and the government will require a minimum % increase for their members. We couldn't raise our prices double every 3 years. LOL. Fortunately I was able to sell my company and exit. I sold to a multi-national company. Unless these labor laws and tax laws change, there isn't really any hope of systemic change in Argentina.

I have maintained for a long time that most of us won't see systemic change in Argentina in our lifetime.

 

[Wally]

I am absolutely flabbergasted reading this. Till now, I thought it was just the taxes and economy that were pushing foreign companies away from investing in Argentina, but with such laws (and more), I now know it is insanely expensive for companies to do business and maintain offices here.

Just insane! Are there examples of other countries with similar rules? I never heard of such paid leave rules.

The outside world don't know how terrible it is here. My wife's family owns many companies here. They have issues with all of them. Having employees here are a major hassle.

But it's not just Argentina. Argentina took the worst of some of their EU countries.

France also has a lot of employee protections. I don't think it's as bad as Argentina but companies have to pay a portion of sick leave. It's also difficult and expensive to fire employees. Plus employees get 5 weeks paid vacation and long paid maternity and parental leave when they have a baby. I still don't think it's as bad as Argentina. Friends own a company in France and they say it is terrible!

Germany has employee protections too. Companies have to pay 100% salaries for the first 6 WEEKS of employees being sick. It's also tough to fire employees there. They have work councils that protect employees. The sick leave rules in Germany probably would be comparable to Argentina.

Spain is not good either. Employees have strong protections and severance there is also high. I know paid sick leave is partly funded by the government. Employees get at least 30 days of paid vacation.

Brazil also is tough with protective labor laws. They also have to pay some sick leave for when employees are sick.

 

[Finance Prof]

I am absolutely flabbergasted reading this. Till now, I thought it was just the taxes and economy that were pushing foreign companies away from investing in Argentina, but with such laws (and more), I now know it is insanely expensive for companies to do business and maintain offices here.

Just insane! Are there examples of other countries with similar rules? I never heard of such paid leave rules.

It is truly terrible here. Just look at the foreign direct investments and how the number is actually negative with Milei. Many multinational companies are taking the opportunity with Milei and exiting and selling off their companies. And many are desperate to get out. Companies like Carrefour but they can't sell without selling at extremely low prices. Does this sound like an Argentina that is improving?

Besides oil and gas companies and a few small segment of sectors, things are not good here. The manufacturing sector is getting decimated and consumer spending is down.

Things don't work here. Employees don't like to work too hard and half the economy is under the table. Not a recipe for success. Plus you have the President and his family openly involved in scandals. That is only the ones we know of.

 

[JonJLA]

@bapal,

It is as bad as others say. I've owned several SRL and SA's in Argentina. I've been on the Board of Directors of several companies. It's a brutal place to do business. Besides the taxes and crazy labor laws you have to deal with wicked inflation. I remember a large company that I had with 150 employees and my salaries were doubling every 3 years.

Almost every employee is part of some union and the government will require a minimum % increase for their members. We couldn't raise our prices double every 3 years. LOL. Fortunately I was able to sell my company and exit. I sold to a multi-national company. Unless these labor laws and tax laws change, there isn't really any hope of systemic change in Argentina.

I have maintained for a long time that most of us won't see systemic change in Argentina in our lifetime.

I always remember the stories you told me Mike about some of the things you were dealing with in Argentina. I remember thinking to myself I would never want to own a company there. A good place to come on vacation or maybe retire but not so much to own a business.

It is truly terrible here. Just look at the foreign direct investments and how the number is actually negative with Milei. Many multinational companies are taking the opportunity with Milei and exiting and selling off their companies. And many are desperate to get out. Companies like Carrefour but they can't sell without selling at extremely low prices. Does this sound like an Argentina that is improving?

Besides oil and gas companies and a few small segment of sectors, things are not good here. The manufacturing sector is getting decimated and consumer spending is down.

Things don't work here. Employees don't like to work too hard and half the economy is under the table. Not a recipe for success. Plus you have the President and his family openly involved in scandals. That is only the ones we know of.

This is what I worry about. Milei seems to be making some progress with cutting the deficit and other things but it remains to be seen how things will go. It will just depend on how long locals will wait. There will probably come a point where it is too much too soon. But as long as salaries keep going up to match true inflation there is a shot at stability.

 

[lemonade]

General strike begins: Protest against Milei's labour reforms underway

CGT-led general strike against Milei's labour reform; Union leaders aiming to "paralyse" the country; No buses, trains, flights or underground trains in response to lower house debate.

www.batimes.com.ar

 

[Piranha]

This Bloomberg article is great. Just read it and talks about the struggles.