1. Legal Framework
The National Social Security System is currently regulated by Law No. 26,425, enacted in 2008 and is referred to as the Argentine Integrated Pension System (“SIPA”). The SIPA is financed through a solidarity system of distribution, which guarantees its affiliates to be covered by the public pension system and maintains that the state must grant social security benefits to all its citizens and they cannot be waived.
The SIPA is financed through the following sources:
- Employers’ contributions, which are equal to sixteen per cent 16% of the total salary of its personnel per month;
- Monthly contributions from independent professionals equal to twenty – seven per cent (27%); and employees under a labour relationship must contribute with eleven per cent (11%) of their salary on a monthly basis.
The mandatory insurances for employers are:
- Labour risks insurance.
- Life insurance.
- Retirement insurance, only enforceable for employees under the CBA for commercial employees.
4. Required Maternity/Sickness/Disability/Annual Leaves
a) Maternity leave
It consists of a period of ninety (90) days paid by the Social Security Administration. This period is divided into forty – five (45) days prior the date of birth and forty – five (45) days after the date of birth. Nevertheless, the mother may reduce the period prior the date of birth – it cannot be less than thirty (30) days – accumulating the remaining days to the period after the childbirth.
i. Sickness or accidents not related to work: if the employee has an accident or suffers an illness, he must be paid a compensation that cannot be less than the one that he would have been paid if he had continued working, if the accident or illness:
- is not related to the job and is not a consequence of an employee’s intentional act;
- prevents the employee from rendering services; and
- takes place during the employment relationship.
If all the above-mentioned requirements are met, the employer must provide sick leave according to the employee’s seniority.
The employer is responsible for paying the employee the corresponding compensation as long as the sick leave lasts.
If the paid sick leave period is finished, and the employee is not able to resume his job, the employee has the right to save his or her position for twelve (12) months, but the employer does not have to pay the employee’s salary during this period.
ii. Work-related sickness or accidents: those affected by work-related sickness or accidents will be able to choose between a compensation based on the Labor Risk regime or a compensation based on Civil Law regulations.
c) Annual Leave
Employees are entitled to an annual vacation period when they have been employed with their employer for over six (6) months.
In case the period of employment is less than six (6) months, the employee will have an annual leave equivalent to one day off for every twenty (20) days of effective work.
Vacations are compulsory and the employer must grant them between October 1 and April 30. Its duration varies according to the employee’s seniority.
5. Mandatory and Typically Provided Pensions
The SIPA is financed through a solidarity system of distribution, which guarantees its affiliates are covered by the public pension system when certain requirements are met.
Under the SIPA, an affiliated person who complies with certain requirements – stated below – receives a benefit called a Regular Pension (JO) and it includes:
- The Basic Universal Benefit (PBU);
- The Complementary Benefit (PC);
- The Benefit for Permanence (PAP); and
- A coefficient for mobility (m).
The JO must grant a minimum pension benefit to all individuals who meet the requirements to obtain it. Currently, according to Resolution No. 28/2016 issued by the ANSeS, the minimum amount granted as a JO is ARS 4,959 / USD 330 (current exchange rate ARS 1 = USD 15). There are no factors that can result in a reduction of this amount.
a) Retirement Plans
When granting a private retirement plan, an employer must avoid any kind of discrimination not based on objective grounds. For example, an employer may grant a retirement plan to employees above a certain position or based on the productivity or seniority of employees. However, if the employer decides to grant a retirement plan and excludes an employee who is in the same position and complies with the same requirement as an employee who is eligible, the employer may be exposed to a discrimination claim.