Economy Politics Local 2026-02-27T02:14:23+00:00

Argentina's Senate Debates Labor Reform Changing Outsourcing Rules

Argentina's Senate is debating a new labor reform that significantly changes employer liability in outsourcing. New provisions could lead to union decentralization and the creation of a Labor Assistance Fund, while also tightening documentation requirements to reduce legal risks.


Argentina's Senate Debates Labor Reform Changing Outsourcing Rules

Buenos Aires, February 26 (NA) -- Human resources departments are evaluating, together with legal advisors, the impact of the modification of Article 30 of the Labor Contract Law on the relationship with contractors, especially in sectors such as energy, industry, logistics, and infrastructure, where the productive characteristics require the outsourcing of parts of the work. In agriculture, it is estimated that there are between 8,000 and 10,000 harvest contractors, in addition to more than 10,000 self-propelled sprayers; in construction, according to the latest data, there were around 23,778 active intermediary companies registered, and many service providers or independent contractors as monotributistas have consolidated their number around 4.7 million, representing a large part of the formally salarized non-wage-earning workforce, according to data collected by the Argentine News Agency.

This Friday the Senate debates labor reform and Juvenile Criminal Law: LLA seeks its last victory in extraordinary sessions. According to traditional labor practice, many large companies delegate to SMEs entire operations of their organization or the provision of services that were previously done internally. The purpose is to reduce costs, increase efficiency, and allow the company to focus on its main activity ("core business"). It is common in information technology and telecommunications, human resources, customer service, and manufacturing.

Although until now such outsourcing implied a high level of risk due to the almost automatic joint liability of the main employer for labor violations by the contractor, with the reform about to be sanctioned into law, that entire scheme changes and the practice could spread. This is because the company that outsources task modules can be exempt if it proves it exercised specific controls, such as verifying the CUIL of the affected workers, confirming the payment of contributions and social security, the payment of salaries, the validity of ART (work risk insurance), and the bank accreditation of the remuneration.

The key will be to be able to prove it, since liability ceases to be structural and becomes dependent on the management and documentation system that the company implements. The implications that this facility could have for restructuring production systems go beyond the flexibilization of work within each organization, as it would decentralize union affiliations that are currently concentrated.

Labor Risks The new Labor Modernization Law passed by the Senate introduces a profound modification to the Labor Contract Law, changing the logic of managing labor risks by delimiting with greater clarity which relationships fall within and outside the regime. In this sense, it redesigns liability in subcontracting, indemnity calculation, financial provision, digital documentation, and limits on litigation. Thus, formality and documentation acquire a central weight in legal defense, by expressly excluding links, such as those with platform providers and certain independent workers, and adjusting the presumption of labor relationship when there is formal invoicing and bank payments.

Regarding compensation, it is declared as a single and exclusive reparation: it maintains the scheme of one month per year of service, but it redefines the "best monthly, normal, and habitual remuneration," excluding non-monthly payments such as SAC and vacations and establishing a cap linked to the average salary of the agreement, with a floor of 67%. The creation of the Labor Assistance Fund (FAL), destined to cover future compensations, is formed with the contribution of a monthly percentage of its payroll that employers must make, for whom part of the contingent cost becomes a fixed and planned component within the financial structure.

The "bank of hours" and the average workday save the cost of overtime at peak work times and smooth it out in the salary, compensating it with rest days or reduced hours at times of less activity. The modification of the regime for culpable diseases, which reduces the percentage of the salary to be paid in certain cases, has not yet been defined.

"Litigation Industry" And to curb the so-called "litigation industry," the consolidation of the digitalization of labor documentation, expressly authorizing digital receipts with electronic or digital signature and their digital conservation with full legal validity, considerably circumscribes the space for judicial claims. The risk is not in outsourcing itself, but in the lack of traceability, affirms Francisco Costa, lawyer and founder of Laborem. Sectors with multiple contractors —such as energy, industry, logistics, infrastructure— have a high volume of documentation and manual control is insufficient, he warns. In this context, the reform turns the control of contractors into a strategic risk management tool, he concluded.

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