The Argentina labour reform approved by Congress has triggered one of the biggest debates in the country’s recent economic and political history. The reform, introduced by Javier Milei, represents a sweeping overhaul of employment regulations and is a central pillar of his economic agenda. The new legislation, often referred to as the Argentina labour modernization law, introduces major changes to working hours, salary structures, severance payments, union rights and vacation policies.

Supporters argue that the reform will modernise outdated labour laws, encourage formal employment and improve economic competitiveness. Critics, however, warn that it weakens workers’ protections, reduces bargaining power and could lead to job insecurity.

The decision by lawmakers in Argentina has therefore sparked nationwide protests, political divisions and strong reactions from labour unions and opposition parties.

Argentina Labour Reform Approved: Why the Government Introduced the Law

The government under President Javier Milei has been pushing aggressive economic reforms aimed at stabilising the country’s economy. Argentina has struggled for decades with high inflation, currency instability and large fiscal deficits.

The administration believes that strict labour laws discourage companies from hiring workers formally. According to government estimates, more than 43 percent of Argentine workers are employed informally without official contracts or labour protections.

The Argentina labour reform latest news highlights that the government wants to make hiring easier, reduce employer costs and promote job creation.

Officials argue that existing regulations are too rigid and costly, making companies reluctant to expand their workforce. By simplifying rules and reducing legal risks, policymakers expect businesses to increase investment and generate employment opportunities.

Structure of the Labour Modernization Law

The newly approved legislation is a 100-page document containing 218 articles. These provisions modify several existing laws that regulate employment conditions across the country.

Key areas covered by the Argentina employment law reform include:

• Working hours and shift flexibility

• Salary calculation and payment systems

• Severance compensation rules

• Labour negotiations between workers and employers

• Limits on strikes in essential sectors

• Vacation policies and scheduling

• Judicial processes related to labour disputes

The law represents one of the most comprehensive labour reforms in Argentina’s modern history.

Major Change 1: New Rules for Severance Pay

One of the most controversial aspects of the reform concerns severance payments for dismissed workers.

Previously, severance compensation was calculated using a broader salary base, which included bonuses, additional benefits and the thirteenth salary payment known locally as aguinaldo.

Under the new Argentina labour law changes 2026, the calculation will exclude many of these additional components.

The reform introduces several new provisions:

• Severance calculations will focus mainly on base salary

• Extra income such as bonuses and paid vacation compensation will not be included

• The calculation base cannot exceed three times the average salary for the role

Supporters argue this will reduce the financial burden on companies and encourage hiring. However, critics say the change makes it cheaper to dismiss workers, potentially weakening job security.

Major Change 2: Flexible Working Hours

Another key feature of the Argentina working hours reform is the introduction of greater flexibility in scheduling.

Under the previous labour law, workers could typically work a maximum of 8 hours per day or 48 hours per week.

The new reform allows employees to voluntarily agree to extended shifts of up to 12 hours.

Instead of receiving traditional overtime payments, employees may offset the extra hours by reducing future shifts.

Key aspects include:

• Maximum shift length can reach 12 hours

• Workers must still receive at least 12 hours of rest between shifts

• Overtime pay may not be required if hours are balanced later

The government argues that this flexibility reflects modern working patterns and business needs.

However, labour unions say the policy removes protections designed to prevent overwork and could allow employers to pressure workers into longer shifts.

Major Change 3: New Labour Negotiation System

The Argentina salary rules reform also allows companies to negotiate working conditions directly with employees, potentially bypassing traditional union agreements.

This means businesses may discuss wages, schedules and workplace policies directly with workers or smaller groups.

Supporters say this creates more flexible and personalised employment arrangements.

But unions fear it could weaken collective bargaining power, which historically has played a strong role in Argentine labour relations.

Major Change 4: Salary Based on Productivity

Another element of the Argentina labour modernization law allows employers to link wages more closely to productivity or performance.

Employers may now choose to:

• Pay salaries based on merit or output

• Offer compensation structures tied to performance metrics

• Pay wages in foreign currencies

Allowing payments in foreign currency is particularly significant because Argentina has long struggled with inflation and currency devaluation.

Many economists believe this measure could help protect workers' purchasing power in volatile economic conditions.

Major Change 5: Limits on Strikes and Protests

The Argentina strike law changes have also become a major point of controversy.

Workers will now need formal permission to organise union assemblies inside workplaces. If a meeting disrupts employees who are not participating, it may lead to sanctions.

Additionally, several industries have been classified as essential services, meaning they must continue operating even during labour disputes.

These sectors include:

• Telecommunications

• Hospitals and healthcare services

• Waste collection

• Education

• Aviation

• Port operations

Essential sectors must maintain at least 75 percent operational capacity during strikes.

This rule effectively limits the ability of workers in these industries to participate in large-scale labour protests.

Major Change 6: Vacation Policy Reforms

Another provision under the Argentina employment law reform affects paid leave and vacation scheduling.

Previously, employees typically received two consecutive weeks of paid vacation.

Under the new system, employers may divide vacation time into shorter segments.

For example:

• Paid leave can be split into 7-day blocks

• Companies may require workers to take vacations during summer at least once every three years

Supporters say this will help businesses maintain operational continuity, while critics argue it reduces workers’ control over personal time.

Major Change 7: Elimination of Certain Professional Statutes

The reform also eliminates specific labour statutes governing particular professions.

Within six months of the law taking effect, special regulations for sectors such as:

• Hair stylists

• Drivers

• Journalists

may be removed.

The government says this step aims to simplify labour regulation and reduce legal complexity.

However, professional groups worry it could strip away protections designed for their industries.

Major Change 8: Labour Courts Restructured

Another major component of the Argentina labour reform news involves changes to the judicial system.

The law proposes the elimination of certain labour-specific national courts, integrating disputes into broader judicial processes.

Supporters believe this will reduce excessive litigation and lower legal costs for businesses.

Employers in Argentina have often complained about large numbers of workplace lawsuits.

Business leaders say reforming the court system could help create a more predictable legal environment for companies.

Nationwide Protests and Political Opposition

The approval of the reform has led to large protests across Argentina, particularly in the capital city of Buenos Aires.

Thousands of workers and activists have taken to the streets, arguing that the law represents a rollback of workers’ rights built over decades.

Several demonstrations near the national Congress building resulted in clashes between police and protesters.

The largest labour federation in the country, the General Confederation of Labour, organised a nationwide strike in response to the legislation.

Union leaders say they plan to challenge the reform in court.

Public Opinion Divided

Public opinion polls reveal that Argentines remain sharply divided over the reform.

Recent surveys suggest:

• 48.6 percent support the law

• 45.2 percent oppose it

Supporters believe the changes are necessary to modernise the economy and reduce unemployment.

Opponents fear the reform could increase precarious work conditions and weaken labour protections.

Economic Context Behind the Reform

The labour reform forms part of a broader free-market agenda introduced by President Javier Milei.

His administration has already implemented policies aimed at:

• Reducing government spending

• Cutting subsidies

• Deregulating various industries

• Stabilising Argentina’s currency

The government claims that labour market flexibility is essential for economic recovery.

However, critics argue that recent economic policies have already caused business closures and job losses.

Reports indicate that since Milei took office:

• More than 21,000 companies have closed

• Around 300,000 jobs have been lost

Opposition leaders claim this proves that economic deregulation alone cannot guarantee employment growth.

Experts Debate Whether Labour Reform Creates Jobs

Many economists and labour experts remain divided about the true impact of labour reform on job creation.

Some analysts argue that rigid labour laws discourage hiring and that reform could encourage companies to expand their workforce.

Others say employment levels depend primarily on broader economic conditions, not labour regulations.

For example, labour law experts argue that economic growth, investment levels and industrial demand play a far bigger role in job creation.

A report by Argentina’s national statistics institute found that 80 percent of businesses have no plans to hire workers in the next three months.

Another 15 percent of companies are considering layoffs.

These findings suggest that labour reform alone may not immediately solve unemployment problems.

International Attention and Political Dynamics

The Argentina labour reform latest news has also attracted international attention.

Some global leaders and economic observers have praised Milei’s market-oriented reforms.

Among them is Donald Trump, who has expressed support for Milei’s economic agenda.

International investors are watching closely to see whether the reforms will improve Argentina’s investment climate and economic stability.

What Happens Next

Although the reform has been approved by both legislative chambers, it must still complete final procedural steps before becoming law.

The government hopes to finalise the process before the beginning of the new parliamentary session in March.

President Milei is expected to highlight the reform as a major political achievement during his upcoming address to Congress.

A Turning Point for Argentina’s Labour System

The Argentina labour reform approved by lawmakers could mark a major turning point in the country’s employment landscape.

If implemented successfully, supporters believe it could modernise labour rules, attract investment and increase formal employment.

However, critics warn that the changes may weaken worker protections and widen economic inequality.

As protests continue and legal challenges emerge, the future impact of the Argentina labour law changes 2026 will depend on how businesses, workers and policymakers respond in the coming months.

For now, the Argentina labour modernization law remains one of the most significant and controversial policy reforms introduced under President Javier Milei, shaping the country’s labour market and economic debate for years to come.

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