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Workforce Flexibility and Government Incentives in times of Covid-19 - Argentina

Short-Term Work State Aid

Covid-19 Questionnaire

Are there any regulations in place providing an employer with possibility for flexible workforce planning such as part-time work/temporary leave which are triggered in a situation similar to a pandemic outbreak as Covid-19?

No

Are there any governmental programs if a company needs to close totally or partially for a certain time period?

In order to protect public health, the Argentinean President established the ""social, preventive and compulsory social isolation"" throughout Argentina from March 20th to April12th, 2020, inclusive.

During the validity of the mentioned term, all the people who live in the country or are in it temporarily, must remain in their habitual residences or in the residence in which they were at the time of initiation of the ordered measure (0 pm of March 20th), and must abstain from go to their workplaces.People affected by certain activities and services declared essential in the emergency are exempt from complying with the "social, preventive and compulsory isolation" and the prohibition to go out their homes.

Among others, the exemptions apply to health personnel, public security and armed forces, migratory activity, national meteorological service, firefighters and air traffic control,oil and gas activities, foods and medicines, etc. In all these cases, employers must guarantee the sanitation and safety conditions established by the Ministry of Health to preserve the health of workers.

Likewise, Law provides that workers will have the right to the full enjoyment of their habitual earnings in the above-mentioned terms established by the regulations.

On April 1st, 2020, the Argentinean Ministry of Labor has stated additional rules to put in force the above-mentioned regulations. In this respect, it must be taken into account that:

  • The workers reached by the "preventive and compulsory social isolation" will be exempt from the duty of assistance to the workplace.
  • When their tasks or other similar tasks can be carried out from the place of isolation, they must, within the framework of contractual good faith, establish with their employer the conditions in which said work will be carried out.
  • The concept of "workers" includes those individuals who provide services continuously under non-dependent figures such as service locations within the private and public sectors, trainees and internships, as well as medical residences.
  • The reorganization of the working day in order to guarantee the continuity of the production of the activities declared essential in adequate health conditions in accordance with the protocols established by the health authority, will be considered a reasonable exercise of the powers of the employer.
  • The need to hire personnel while the "preventive and compulsory social isolation" lasts, must be considered extraordinary and transitory under the terms of article 99 of the Labor Contract Law.
  • Paid leave on these days of isolation must not be considered as holidays or vacations at the time they are paid to employees. Thus, additional payments that arise when holidays ore vacations take place, will not be paid at the time of paying this special license.

In addition, Presidential Necessity and Urgency Decree No. 332/2020 was published on April 2nd, in the Official Bulletin, whereby an “Employment and Production Emergency Assistance Program” is adopted for emergency health service employers and workers, according to the following detail.

Benefits

This program will offer one or more of the following benefits:

  • Postponement or reduction up to 95% (ninety-five percent) of the payment of employer contributions to the SIPA (Argentine integrated social security system).
  • Additional payment: payment made by the Argentine government to payroll employees in the private sector governed by the collective bargaining agreement system under Law No. 14,250 (as revised in 2004), as amended, for companies up to 100 (a hundred) workers.
  • Health emergency aid under the REPRO (productive recovery program): nonwage amount related to the SIPA paid by the Argentine government for payroll employees in the private sector governed by the collective bargaining agreement system under Law No. 14,250 (as revised in 2004), as amended, for employers exceeding 100 (a hundred) workers.
  • Comprehensive unemployment benefit system: the workers that meet the requirements included in Laws No. 24,013 and No. 25,371 will be entitled to unemployment compensation.

The regulation states that the employers entitled to these benefits should evidence with the AFIP (Federal Public Revenue Agency) the payroll and activities subject to this benefit.The Ministry of Labor, Employment and Social Security shall a) consider the information and documentation submitted by the Company; b) may reveal other information to expand and/or verify the data provided and request the documentation deemed necessary, and c) may arrange assessment visits to the site to ratify and/or revise its conclusions.

Employers

The parties to this regulation may be entitled to the benefits mentioned in points (a), (b) and (c) provided that they comply with one or more of the following criteria:

  • Economic activities greatly affected in the geographic areas where they are conducted.
  • High number of employees infected with COVID-19 or subject to mandatory isolation or individuals exempt from work because they are included in risk groups or in charge of family care responsibilities concerning COVID-19.
  • Dramatic decrease in sales after March 20, 2020.

Parties excluded

The parties that carry out the activities and services that are essential to address this health emergency and which personnel were exempt from complying with the “social, preventive and mandatory” isolation established in section 6, Presidential Decree No. 297/20 and Administrative Decision No. 429/20, as amended, are excluded from the benefits included herein, as well as the parties that, even though they are not expressly included in the aforementioned regulations, do not show specific signs that evidence a representative drop in activity levels.

The Chief of Staff will establish the objective criteria, sectors of activity and other considerations that allow to determine the assistance provided for by this decree, including exceptions for those who perform essential activities but they have been also damaged by a drop down of its sales.

Social security taxes

  • Postponement of the due dates for paying employer contributions to the SIPA; to such end, the AFIP is instructed to set special due dates for the payment of employer contributions to the SIPA accrued this March and April, and payment-in-installment plans applicable to the employers governed by the regulation to be issued.
  • Decrease up to 95% (ninety-five percent) of employer contributions to the SIPA accrued in April 2020. This benefit will be established by the Chief of Staff based on the parameters defined by the regulation to be issued.

The 95% decrease in payroll contributions to the SIPA (benefit included in point b) will apply to employers which have less than 60 (sixty) payroll employees as of February 29, 2020.

To be entitled to this benefit, employers which payroll employees exceed such amount should file the crisis prevention proceedings provided for in Chapter 6, Title III, Law No. 24,013, with the scopes and limits established in the regulation.

If state aid and/or other extra-ordinary governmental support is available, please describe the necessary prerequisites to qualify for such state aid.

Decree No. 332/2020 also provided an additional payment made by the Argentine government to payroll employees in the private sector governed by the collective bargaining agreement system under Law No. 14,250 (as revised in 2004), as amended, for companies up to 100 (a hundred) workers and a Health emergency aid under the REPRO (productive recovery program), that consists in a nonwage amount related to the SIPA paid by the Argentine government for payroll employees in the private sector governed by the collective bargaining agreement system under Law No. 14,250 (as revised in 2004), as amended, for employers exceeding 100 (a hundred) workers.

Additional payment to employers with less than 100 employees: This amount must be paid by the ANSeS (Argentine social security agency) for all or some workers included in the collective bargaining agreement system under Law No. 14,250 (as revised in 2004, as amended) in the case of employers up to 100 (a hundred) workers.

The compensation amount will be determined based on the following parameters:

  • In the case of employers up to 25 (twenty-five) workers: 100% (a hundred percent) of the gross salary up to 1 (one) monthly adjustable minimum sustenance salary in place (ARS 16,875).
  • In the case of employers from 26 (twenty-six) to 60 (sixty) workers: 100% (a hundred percent) of the gross salary up to 75% (seventy-five percent) of the monthly adjustable minimum sustenance salary in place (ARS 16,875).
  • In the case of employers from 61 (sixty-one) to 100 (a hundred) workers: 100% (a hundred percent) of the gross salary up to 50% (fifty percent) of the monthly adjustable minimum sustenance salary in place (ARS 16,875).

This additional amount will be considered a payment towards compensation of the personnel affected, and employers are required to pay the remainder amount until the full amount is reached. It is a wage amount for all legal and collective bargaining agreement purposes.

Upon requesting the benefit, the employer should withhold the portion applicable to the SIPA, the statutory health care contributions and the contribution to the INSSJP (Argentine Institute of Social Services for Retirees and Pensioners).

Should the employer suspend labor service, the additional payment will be reduced by 25% (twenty-five percent) and may be considered part of the nonwage benefit defined in section 223 bis, Employment Contract Law No. 20,744, as revised in 1976, as amended.

Health emergency aid under the REPRO for employers with more than 100 employees: It is a nonwage benefit related to the SIPA for workers through the productive recovery program led by the Ministry of Labor, Employment and Social Security for companies not included in the previous point (i.e., more than 100 workers).

The benefit per worker will range between ARS 6,000 (six thousand Argentine pesos) and ARS 10,000 (ten thousand Argentine pesos). To such end, the enforcement authority will adopt a new differential and simplified productive recovery program while maintaining the effectiveness of Resolution No. 25, of September 28, 2018, issued by the former Secretary of Government of Labor and Employment of the then Ministry of Production and Work insofar as it is compatible.

If state aid and/or other extra-ordinary governmental support is available, please describe the application procedure for such state aid (e.g. how and when is the application filed with the government etcetera; what shall such application include).

It is pending of regulation.

Please note that the COVID-19 scenario is constantly changing and that this information is current as of 09 April 2020. This publication should not be regarded as offering a complete explanation of the legal matters referred to and is subject to changes in the law and other applicable rules.