In our post-pandemic global work culture, the myriad benefits of employing abroad are being realized on a greater scale than ever before. As remote work continues to increase both in terms of popularity and efficacy, employers are enjoying access to international talent pools previously inaccessible. In this article, we’ll tackle all of the most crucial considerations business leaders must make, as well as the regulations to be aware of, in order to successfully order a background check in Agentina and hire employees.
Why hire abroad? And why Argentina?
There are many benefits to hiring abroad, most of which you are already likely familiar with. These include:
Around-the-clock synchronous work
International business expansion opportunities
Access to foreign language markets
Greater pool of talent to hire from
Hiring employees in Argentina specifically grants business leaders a foothold in the largest Spanish-speaking country on earth, whose strong middle class of skilled workers has the highest literacy rates of any country in Latin America.
The difference between hiring employees and independent contractors in Argentina
It is important to be aware of the distinctions between an ‘employee’ and an ‘independent contractor’ (also known in some countries as freelancers, 1099-contractors, or non-contract employees), when hiring abroad. Failure to properly classify employees or independent contractors as such may result in the employer facing hefty fines and lawsuits.
In Argentina, the distinction between an employee and independent contractor is far less tangible than in most other countries. Under Argentine law, the assumption is that any relationship in which a person performs a service in exchange for money is first and foremost an employee-employer relationship.
In practice, this means that it is very difficult for both local and international employers to prove that they have engaged the services of an independent contractor, rather than a non-registered employee. The crux of the distinction between the two, in Argentina, rests primarily in the existence (or lack thereof) of subordination of the individual to the employing company.
Employees are any individual employed for an fixed-term or indefinite period of time.
Independent contractors:
Must not work exclusively for a single employer
Must not be subordinate to the employer in any economic, technical or legal sense, nor may their relationship exhibit any other signs of being a “labour relationship”
Must not have their schedule, nor method of work, dictated or created by the employer
Must assume the risks of the services rendered
May only offer their services to individual employers for up to 5 years
Should the nature of the relationship between company and contractor exceed these limitations, then the contractor is automatically deemed an employee under Argentine law, and must be classified as such.
Argentine labour laws, work culture, and hiring best practices
We’ll now spend some time familiarizing ourselves with the various labour laws and regulations – including tax and work culture – which employers must comply with when hiring in Argentina.
But first, some basic business facts about Argentina:
The capital of Argentina is Buenos Aires
The currency of Argentina is the Argentine Peso ($, ARS)
The population of Argentina is around 46,166,500 (as of October 2022)
Argentina is rates as 126th on the World Bank’s Ease of Doing Business Index
Candidate background screening
As when hiring locally, one of the most useful and often necessary stages of the hiring process is conducting background checks on potential candidates. Background screenings help to reassure employers that the candidates they are considering for an open position are reliable individuals whose CVs are accurate, and backgrounds are trustworthy.
Elements assessed and identified by background screening providers typically include:
Criminal records
Past addresses
Reference checks (both professional and personal)
Drug screening
Bankruptcy checks
Whilst especially necessary when hiring employees in a country you may be unfamiliar with, background screening can be tricky to implement internationally. In such a case, it is always best to defer the process to a trusted international background screening provider.
When it comes to hiring employees in Argentina, it is important to note that under the Habeas Data Law No. 23,326 any background checks carried out by a prospective employer or third party may not include criminal records. Criminal records can only be accessed by a judge or personally by the individual. Additionally, financial status checks and medical checks regarding certain medical conditions may also be regarded as discriminatory, and as such are not permitted.
Wages and salaries
Argentina has a few unusual laws surrounding employee wages which may be quite different to those you’ve come across elsewhere.
Minimum Wage: The legal minimum wage in Argentina is ARS 32,616 per month.
Working Week: The typical Argentine working week is 48 hours long.
Overtime: Overtime should not exceed 30 hours per month, or 200 hours per year. It must be paid at 150% salary as standard, 200% on weekends, and 300% on national holidays.
13th Month: Argentine workers are due a statutory Sueldo anual complementario (SAC, or the “13th-Month Salary”), meaning that all workers must receive an additional month’s wages paid out in two instalments – the first in June and the second in December.
Payroll: Argentine workers are paid on a monthly basis.
Tax and employer contributions
Argentina’s tax system is progressive, meaning that higher earners pay more. Employers hiring in Argentina must contribute to their employees’ pension funds, health insurance, life insurance, labour risk insurance, family allowances, and the National Unemployment Fund. These contributions are covered by a monthly social security employer contribution of 24% of the employee’s monthly salary.
Employers must also withhold the appropriate amount of tax from their employees’ payslips each month. Employees in Argentina are taxed at 17% of their monthly salary, as a contribution to social security, up to a monthly salary cap of ARS 410,742.03.
Leave
Employees in Argentina are legally entitled to a scalable number of leave days depending on their length of service at a given company, and their particular situation.
Statutory (Holiday) Leave: 14-35 days, at 100% salary (paid by the employer), per year depending on length of service.
Pregnancy and Maternity Leave: 90 days, at 100% salary (paid by the government), to be taken either side of the due date according to the mother’s wishes.
Partner and Paternity Leave: 2 days, at 100% salary (paid by the government), to be taken either side of the due date according to the partner’s/father’s wishes.
Sick Leave: 15 days, at 100% salary (paid by the employer), if the injury or illness is related to work; illness or injury not related to work is paid at a reduced rate up to 12 months depending on the employee’s length of service and family situation.
Marriage Leave: 10 days at 100% salary (paid by the employer) for marriage.
Bereavement Leave: 3 days at 100% salary (paid by the employer) for the death of a spouse, child or parent; 1 day for the death of a sibling.
Exam Leave: 10 days at 100% salary (paid by the employer) spread over blocks of 2 days per exam.
Non-compete and equality laws in Argentina
Any non-compete agreement which an employer makes with a former employee may last no longer than 2 years and must include sufficient ‘consideration’ as compensation for the former employee. Though the rate of consideration is undefined in law, it is generally assumed to be 60-70% of the employee’s former salary.
There are a number of laws in Argentina concerning the protection of employees from discrimination. It is illegal to discriminate against prospective and current employees based on their sex, race, nationality, age, religion, or political or trade union affiliations or beliefs.
For example, this means that employers must not ask non-job-relevant questions during the hiring or onboarding process relating to any one of these protected characteristics.
How to internationally hire employees in Argentina
Hiring employees in Argentina can be a fantastic means for a business to expand into the Latinx world, as well as accessing a large pool of highly-literate and intelligent Spanish-speaking talent.
However, it has been made clear in the previous section that compliance with Argentine labour and tax laws can be extremely complex at the best of times.
Moreover, in order to hire employees in Argentina through traditional means, you would need to establish a legal business entity in the country, and register it with the Office of Corporations and the Administración Federal de Ingresos Públicos.
Thankfully, there is a much simpler means of efficiently, compliantly, and securely hiring employees in Argentina. By employing the services of an Employer of Record (EoR) or Independent Contractor Solutions provider, you can automate the entire international recruitment, onboarding, and management process, whilst ensuring full compliance.
If you wish to engage the services of independent contractors in Argentina, it is important to be aware that there are many risks involved, and that the penalties for misclassification are extremely high. It’s wise to consult professionals before determining whether pursuing the services of independent contractors in Argentina is worth your while.
Order an Argentina Background Check Now: International Background Checks
Key takeaways
Let’s recap:
Argentina offers international recruiters a wide pool of Spanish-speaking talent.
Hiring employees in Argentina requires strict compliance with a number of labour laws and regulations not found elsewhere in the world.
These include:
13th-Month salary payments.
Contract length distinctions between employees and independent contractors.
24% social security contributions paid by the employer on employee’s behalf.
Argentina Background screening cannot include criminal records.
Employees and candidates are protected from discrimination by law.
The easiest and most effective way to compliantly hire employees in Argentina is to engage the services of a dedicated global expansion and HR solutions provider.
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