How to use an Employer of Record in Argentina

Anyone who’s been on vacation to Argentina returns buzzing with stories about passionate football fans, tangos, wine, hiking through Patagonia, and asados — frequent barbecues where friends and family are equally welcome.

There's so much to love about the “land of silver”. But what you often don’t hear is about Argentina's growing army of knowledge workers, developers, engineers, and designers that have produced numerous technology giants that have become household names in Latin America and beyond.

Thanks to generous government policies, Argentina has continued to see a growing number of startups, venture capital funds, and multinational corporations expanding to leverage Argentina’s skilled workforce.

If you’re looking to start building a remote team in Argentina using an employer of record (EOR), you’re making the right call. An EOR can help you handle all the legwork required to hire and pay employees in Argentina compliantly on your behalf, saving you time and money.

But there’s so much you need to learn to choose the right EOR to help you expand globally. This article will explain why you need an EOR, how to navigate local labor regulations in Argentina using an EOR, and how to choose the right EOR to hire employees in Argentina.

Five steps to hiring employees in Argentina using an employer of record

There are many variables to consider while deciding on an EOR , which makes it difficult to determine the best option for your needs. Here’s a simple five-step process you can use to vet potential EORs and determine which partner works best for your situation.

Step 1: Weigh up the pros and cons of each potential partner

No doubt you have a list of requirements a potential employer of record should meet, such as pricing, ease of use, and an emphasis on security. Defining your requirements upfront serves as a quick and easy scorecard you can use to weigh each partner and ultimately determine which best suits your needs.

Step 2: Take the time to select the most appropriate EOR service provider

Essentially, an employer of record serves as your offshore HR department and should:

• Own its own established entity in Argentina

• Offer a reliable payroll infrastructure that ensures your employees are paid on time

• Stay on top of changing regulations and help you stay compliant

• Offer reasonable pricing that doesn’t eat into your margins

• Secure your data and rights to your intellectual property, and

• Offer full-stack HR infrastructure for managing local taxes, benefits, etc.

Step 3: Check the reviews, testimonials, and coverage of your shortlist of providers

An EOR provider is only as good as their existing customers think they are. Make sure you read client testimonials, check third-party review sites, and browse online press coverage to get an understanding of the EOR’s credentials and how well (or not) they’ve treated previous and existing clients.

Step 4: Ensure that the EOR solution for Argentina will provide a best-in-class employee experience

An employer of record serves as an employee-facing extension of your brand and your workplace culture. So, it’s wise to take a demo of any EOR provider you’re considering to ensure they’re able to:

• Pay salaries on time

• Onboard new employees with ease and offer a user-friendly experience, and

• Resolve any employee or admin issues quickly.

Step 5: Work with your partner to make sure you always provide a fair and equitable compensation package 

A senior software engineer in Ukraine earns $51k annually. The same position in the San Francisco Bay Area costs upwards of $153,000 per year. As your team expands internationally, how do you ensure you’re paying everyone a fair wage while still saving via geographical cost of living?

To figure that out, an employer of record can help you balance market rates for each position you’re hiring with the local cost of living, experience levels, and any regulation around minimum wage. Your EOR must be able to work out competitive benefits factoring in specific labor laws of the location, as well as the potential employee’s role, experience, and skills. 

Step 6: Make sure your partner will guard your intellectual property and maintain data security for your business

Your intellectual property is a key financial asset that can help secure your market position or make your company an attractive prospect at a liquidation or exit event. An ideal employer of record should ensure employees understand they’re ceding the rights to the intellectual property they’re paid to produce for your company.

Similarly, given that a prospective EOR will be dealing with your HR and financial data, make sure that there are stringent data protection standards in place to guarantee your company’s privacy.

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What are the benefits of using an employer of record in Argentina?

An EOR hires and pays workers on your behalf, and handles the multiple HR functions involved in international hiring— onboarding procedures, payroll, benefits, taxes, and compliance. An employer of record does all the legal legwork for you to ensure that your company operates in accordance with local laws and regulations. In short, an EOR makes it simple to hire and manage your employees in Argentina and beyond. Using an employer of record can help you:

• Maintain a local entity according to Argentine employment law

• Issue contracts that clearly state terms of employment such as working hours, remuneration, vacation entitlement, termination terms, contract terms, payroll policies, etc.

• Manage payroll and pay your employees on time

• Ensure your employees are correctly classified

• Manage the termination process to ensure employees are only let go in compliance with local labor laws

• Settle requisite levies and taxes and adapt to changing regulations so that you can remain compliant.

How much does it cost to use an EOR in Argentina?

If you’ve decided to go with an EOR to help you expand into Argentina’s labor market, you need to choose a solution that offers a balance between great pricing and robust infrastructure to support your international HR needs.

Older, established suppliers that support a large network of countries tend to charge exorbitant fees. Newer entrants into the EOR market may cost less, but may not have the infrastructure older players have. You'll also have to check whether they offer the full range of services you require or the security measures needed to hire abroad.

In comparison, Remote offers a full-stack employer of record service that integrates with your HR software, so you can issue contracts, manage payroll taxes, pay salaries on time, and stay compliant with changing rules, all for an affordable, flat fee.

Compare Remote to other EOR providers to find the best global employment solution for your needs.

Hiring in Argentina

Employment in Argentina is regulated by a collection of labor laws spread across the Constitution, the Labor Contract Law, and several international statutes Argentina is a signatory to.

Understanding how these laws apply in practice will help you structure your policies around hiring, administering benefits and remuneration, and letting employees go if required.

To help you stay on the good side of the law, our comprehensive guide to hiring in Argentina covers everything you need to know about hiring in the country — from salaries and benefits to termination and severance payments.

Employment contracts and agreements in Argentina

Under Argentine law, employers are not required to fulfill any legal formalities to officially hire employees; it’s sufficient to simply put them on your payroll. As a result, most contracts are assumed to be indefinite unless specified in a contract.

Employers can also enter into a written contract for situations such as:

• Probation

• Fixed-term contracts, which can last between one month and five years and can be renewed every five years

• Contingent-temporary contracts, which are designed to cover seasonal employment scenarios

Labor compliance in Argentina

Argentine labor law requires that businesses adhere to certain obligations to maintain their workers’ rights and good standing with relevant regulations. These include:

• Protecting employees from any form of discrimination due to race, religion, nationality, ideology, political affiliation, sex, financial, social, or physical condition.

• Ensuring working hours don’t exceed eight hours daily or 48 hours per week.

• Paying workers a minimum wage and adjustable wage for their efforts — the Argentine minimum wage is set to ARS 87, 987 per month as of June 2023.

• Providing dignified and safe working conditions

• Paying the Aguinaldo, a mandatory 13th-month salary

Payroll and payroll taxes in Argentina

Argentine payroll and income taxes are capped at 5% and 35% respectively, to be withheld by the employer.

The employer has to pay social security taxes on the employee’s total income, which is 26.4% or 24% depending on the kind of services or trade the company is involved in. Employer payroll taxes are at 17%, which includes contributions to pension (11%). Healthcare (3%) and social services (3%).

Understanding your company’s tax position within Argentina is essential to limiting your liability and avoiding double taxation: our guide to hiring Argentine employees explains Argentina’s payroll and income taxes in further detail.

Employment benefits and compensation in Argentina

Employees in Argentina are entitled to a fair and adjustable minimum wage, reasonable working hours, and several statutory benefits as defined by the nation’s labor laws. Understanding how they work will help you create a compliant and attractive compensation package that’ll attract the best brains for your team.

Maternity and paternity leave

Female employees are entitled to 90 days of paid maternity leave, with full wages paid by the government. This can be supplemented with an additional six months’ unpaid leave following maternity leave. Fathers are entitled to two days’ paternity leave, with 100% of their wages paid by the government.

Sick leave

Employees are entitled to sick leave with benefits, depending on their tenure with an employer. Depending on their unique situation, sickness benefits can be paid by an employer, the government, or both, and can last up to 12 months.

Vacation and holidays

Employees are entitled to 15 paid public holidays, and anywhere from 14 to 35 days of paid vacation annually, depending on their tenure.

Healthcare

Argentina boasts some of Latin America’s best healthcare and maintains a network of public medical facilities accessible to all citizens.

Although public healthcare coverage is essentially ubiquitous, offering private health insurance can be a strong driver for attracting talent, especially if you’re hiring older candidates for management positions, etc.

Pensions

Employer and employee pension contributions (18% and 11% respectively) fund Argentina’s pension system that guarantees retirement benefits after 30 years of contributions and for employees who've been working before July 1994.

Argentina’s public pension scheme has seen rocky days lately, with unfunded liabilities in the billions of dollars. Enrolling your Argentine workforce in private pensions can be a huge driver for staff loyalty.

Our philosophy here at Remote revolves around helping visionary businesses hire their dream team from anywhere across the globe, and an important part of that is making sure that all employees earn livable wages, no matter where they live. Remote can help you design and provide competitive benefits for your contractors and employees so that you can build a strong workforce that stays on long-term.

Learn more about how Remote can offer your global team country-specific benefits tailored to your employees.

Severance pay and employee terminations in Argentina

Employers are required to provide written notice anywhere from 15 days to two months in advance before dismissing an employee. Terminations are generally justified for employee misconduct, inability to dispense duties, or economic considerations.

Employees terminated without cause are entitled to severance payments depending on the terms of their dismissal, as covered in our guide to hiring in Argentina.

What are the risks of employee misclassification in Argentina?

Argentina enforces strict worker protection statutes. Misclassifying your employees is a risky proposition that might get you hit with fines, penalties, and the risk of losing your license to hire in Argentina entirely.

Employers who are found to have misclassified employees or contractors will be liable to:

• Get enrolled in the publicly accessible Register of Employers with Labor Sanctions (Registro de Empleadores con Sanciones Laborales, or REPSAL), and

• Pay severance payments to their independent contractors if they’re found to have misclassified the former as employees.

An employer of record can help you classify your workers in Argentina correctly. Remote’s team of legal specialists can help you mitigate misclassification risks and stay compliant with Argentine regulations. 

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Get started with an employer of record in Argentina

Argentina is set to see more growth in its technology and startup ecosystem and remains one of Latin America’s fastest-growing tech hubs. Tapping into the pool of knowledge workers in the country might give your company the much-needed edge it needs to succeed in a global market. 

However, international hiring can be tricky. Apart from setting up a local entity, you’ll have to figure out various processes to hire, onboard, pay, and manage your employees in Argentina — which can be costly and time-consuming. Besides, if you try navigating the Argentine laws alone, you might risk flouting labor regulations that can attract serious penalties.

Remote makes it easy and straightforward for you to hire employees in Argentina. We offer full-stack EOR services to attract and retain top talent in the country. Remote simplifies hiring in Argentina, so you can:

• Open a dedicated entity that authorizes you to hire in Argentina

• Stay compliant with Argentina’s changing employment regulations

• Streamline payroll and pay your employees on time, every time

• Retain intellectual property rights

• Secure your company and employee data

• Classify your workforce and avoid legal penalties.

Learn more about how Remote can take your global expansion plans to the next level. If you’re ready to start growing your team in Argentina, get started with Remote today!

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