The new labor reform in Argentina has just been made official. The government enacted it last Friday through Decree 137/2026, so Law 27.802, which modifies many aspects of the labor regime, is now in effect.

What’s interesting is that this labor reform touches practically every aspect: from how severance payments are calculated to how many hours you can work per day, including vacations, registration, and even how dismissals are financed. According to the government, the idea is to improve labor formalization and give the labor market more flexibility.

As for the workday, it maintains the standard of 8 hours per day or 48 per week, but it now allows agreements between employer and worker for shifts of up to 12 hours per day if an overtime compensation system is established. There are hour banks so that the higher workload of one day can be compensated with another. All of this always respecting a minimum rest of 12 hours between shifts.

Vacations also change. Now it is possible to negotiate when to take them, although the employer must grant the seasonal summer break at least once every three years. The new part is that they can be split into minimum 7-day segments, not necessarily consecutive.

One of the most important changes relates to dismissals. The Labor Assistance Fund (FAL) was created to finance severance payments. Large companies must contribute 1% of gross monthly remuneration, with the possibility of reaching up to 1.5%. MiPyMEs contribute 2.5% with a potential of 3%. This fund comes into effect on June 1, 2026.

The labor reform also introduces changes in how severance pay is calculated. Now, the best monthly remuneration from the last year is used, excluding the Christmas bonus and vacations. There is a cap of three times the average salary under the applicable collective agreement.

On wages, it is allowed to incorporate variable components based on productivity or merit, without creating rights by custom. In other words, remuneration can be adapted to performance factors. In addition, tips are no longer considered remuneration, so they do not affect severance payments or the Christmas bonus (SAC).

Registration is centralized in ARCA, which greatly simplifies the process. It is now sufficient to register there without additional requirements from other authorities. The digitization of labor books is permitted, although the originals must be kept for 10 years.

There are two programs to encourage formalization: the RIFL for new hires with reduced employer contributions during the first 48 months, and the PER, which offers forgiveness of up to 70% of debts for contributions for employers who regularize staff.

As for strikes and conflicts, the labor reform establishes mandatory minimum coverage: 75% in essential services such as health, water, electricity, and education; 50% in activities of major importance such as transportation and banks. Any industrial action must be communicated 5 days in advance.

In procedural and judicial matters, the changes include updating credits by IPC plus 3% annually, paying judgments in installments (up to 6 installments for large companies, 12 for MiPyMEs), and a limit on procedural costs of 25% of the judgment amount. The expiration of a case (peremption) is reduced to 6 months in the first instance and 3 months in the second instance.