The labor reform proposed by the government of Javier Milei, included in the 'Law for the Promotion of Investment and Employment' bill, incorporates a feature that could radically change the management of working hours, and in particular, the payment of overtime: the 'hour bank'. According to information obtained by Noticias Argentinas, Article 11 of the bill incorporates Article 197 bis into the Labor Contract Law (LCT), which allows collective agreements to establish 'regimes that adapt to changes in production methods, the specific conditions of each activity, especially considering the benefit and interest of workers'. What is the 'hour bank'? The 'hour bank' is a flexible working hours system that allows an employer to accumulate excess hours worked during certain periods (which would traditionally be paid as overtime) to compensate for them during periods of lower activity, when the worker works fewer hours or takes days off. That is, instead of immediately paying for additional hours with surcharges (50% or 100% as overtime), those hours are 'saved' in an individual account for the worker, who can then 'withdraw' them in the form of days off or reduced workdays. How does Milei's reform enable this? The bill explicitly states that collective labor agreements 'may collectively provide for overtime regimes, hour banks, compensatory rest days, among other institutes related to the working day'. This means that if a collective agreement agrees to it, the 'hour bank' could be implemented, transforming the dynamics of overtime pay. Implications of the measure Flexibility: It provides greater flexibility for companies to adapt the working day to the peaks and troughs of production. Overtime: It could reduce the amount of overtime paid with surcharges, as the excess would be compensated with free time. Collective Agreements: Implementation will depend on what is negotiated in each collective agreement. Rest: The bill maintains a 'minimum non-waivable period of TWELVE (12) hours of rest between shifts for reasons of health and safety at work'. The introduction of the 'hour bank' represents a significant change in Argentine labor law, shifting the definition of flexibility mechanisms from the more strict treatment in the Labor Contract Law to the realm of collective bargaining.
