On 4 January 2020, Decree 14/2020 was published in the Official Gazette by which a mandatory salary increase was established for private sector workers. The increase must be granted to all employees, regardless if they are under any specific collective bargaining agreement (“CBA”).
The increase for each employee was established in AR$ 3,000 (paid with January´s salary) and an additional increase of AR$ 1,000 (as of February), meaning a total increase of AR$ 4,000. This increase must be reflected on salary slips under the item “incremento solidario”.
The decree provides that the increase will become part of the salary (i.e. social security and tax obligations shall be paid accordingly and it should be included when calculating items such as 13th salary, holidays, overtime and severance) and that it can be taken into account for future increases. The decree states that this increase shall not be taken into account for the calculation of any salary increase provided in the CBA or in the individual employment contract between the parties.
Those employees who have a reduced working day, the increase should be granted proportionately.
Agricultural workers and personnel of private households are excluded from this measure.