Argentina has introduced a labor reform that brings significant changes to the Labor Contract Law (LCL) and related regulations. The reform affects both existing and future employment relationships. However, even before entering into force, several provisions were declared unconstitutional, despite remaining operational.
Key changes
Firstly, Section 23 of the Labor Contract Law has been amended, removing the automatic presumption of an employment relationship based solely on formal elements such as invoices or service agreements. This change redefines the traditional interpretation, limiting the scope of the protective principle and providing greater legal certainty for the engagement of independent contractors, including from a social security perspective.
The reform also introduces changes to Section 18 of the Labor Contract Law regarding seniority. Under the new rules, previous years of service will no longer be recognized if more than two years have elapsed between the termination of employment and rehire.
In addition, Section 52 has been amended, removing the requirement to maintain officially certified labor books and replacing them with digital employment records (ARCA). This represents a significant administrative simplification, subject to implementation by local jurisdictions.
The reform also updates Sections 80, 104, 34 and 42, allowing the use of digital payslips, salary payments in foreign currency, greater flexibility in remuneration structures through non-permanent variable compensation, and the implementation of working time banks by agreement. These measures expand employers’ management tools while preserving fundamental employment principles such as wage protection and minimum rest periods between working days.
Finally, changes have been introduced to Section 245 regarding severance compensation. While the calculation remains based on one month’s salary per year of service, non-recurring payments -such as the thirteenth-month salary (SAC), accrued holiday pay and extraordinary bonuses- are excluded from the calculation, and collective bargaining agreement caps apply. The reform also introduces the Labor Assistance Fund (FAL), an optional mechanism financed through the social security system that allows employers to anticipate and manage dismissal costs, reducing their financial exposure.
Key takeaways
2026 labor reform requires companies operating in Argentina to review and adapt their internal employment practices. Employment conditions and corporate obligations have been updated to streamline processes and provide greater flexibility for businesses.
Expanding into Latin America remains challenging due to the region’s continuous tax and labor law reforms. Relying on Auxadi’s international financial and corporate services can help support your international expansion and ensure compliance across jurisdictions.
About Auxadi
With 26 subsidiaries across Europe, the United States, and Latin America, Auxadi is today the leading Spanish accounting firm serving multinational companies and real estate investment funds. Through its technology-driven approach and strong client-focused culture, Auxadi acts as an extension of its clients’ finance departments worldwide, providing accounting, tax, payroll, transfer pricing, and corporate legal services.
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Author:
Julieta Eidelstein
Tax Manager – AR
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All information contained in this publication is up to date on 2026. This content has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this chart without obtaining specific professional advice.No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this content, and, to the extent permitted by law, AUXADI does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this chart or for any decision based on it.