International Newsletter

Argentina’s Salary Increase Under the Collective Bargaining Agreement for Commerce Employees

October 31, 2019
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Argentina

Argentina’s ministry of labor (Ministerio de Producción y Trabajo) has approved a salary agreement executed within the framework of Collective Bargaining Agreement (CBA) No. 130/1975, which should, amongst other things, boost pay for applicable employees. This agreement was executed among the representatives of the corporate chambers and the relevant union. It is worth noting that this CBA is applicable to the majority of employment relationships in Argentina.

The agreement covers five areas:

  1. Salary increase
    1. As of September 2019 and up to March 2020, inclusive, the parties to the agreement have agreed to a salary increase over the current salary scales.
    2. The increase applies as follows:
      1. 4.5 percent for the period from September to October 2019;
      2. 4.5 percent for the period from November to December 2019;
      3. 4.5 percent for the period from January to February 2020; and
      4. 4.5 percent in March 2020.
    3. Employees who work part time or under a reduced workday schedule will receive the increase proportionally.
    4. The increases granted by this salary agreement cannot be absorbed or compensated, unless the employer has freely granted an increase as of January 1, 2019, and the employer established that the amount was granted under the concept of “on account of future salary increases.”
  2. Extraordinary Allowance
    1. This allowance must be paid in five installments, together with the monthly compensation paid in May, June, July, and August 2019, with the final installment to be paid in March 2020.
    2. The extraordinary allowance is not treated as salary for the purpose of withholdings and contributions to the social security system.
  3. Revision Clause
    1. The parties agree to meet again in January 2020 in order to analyze whether the salary increases match the Argentine inflation rate.
  4. Health Insurance Contributions or Obra Social de los Empleados de Comercio y Actividades Civiles (OSECAC)
    1. The parties agree that employees must make a contribution to the OSECAC.
    2. This contribution is extraordinary and exceptional.
    3. The amount of the contribution is ARS 100/USD 1,79 per month (at the June 2019 exchange rate of 1USD=ARS 55.91).
    4. This amount will be withheld from each employee’s monthly compensation.
    5. This contribution must be paid during the period between May 2019 and March 2020.
  5. Insurance “La Estrella”
    1. Resolution No. 726/2019, issued by the Labor Secretary, approved the reduction of 1 percent of the employer’s contribution to the retirement insurance or La Estrella. Therefore, the percentage of the employer’s contribution, which was formerly 3.5 percent, will now be 2.5 percent and will be applied retroactively to January 1, 2019.

Written by Mercedes Balado Bevilacqua and Cecilia Acosta of MBB Balado Bevilacqua Abogados and Daniel D. Dauplaise of Ogletree Deakins

© 2019 MBB Balado Bevilacqua Abogados and Ogletree, Deakins, Nash, Smoak & Stewart, P.C.