Law 27,802 narrowed severance, created an employer severance fund, added flexible hours and cut contributions for new hires to 5%. Here is what changed, where the courts stand, the cost of one salary today — and the same role in Paraguay.
Argentina’s Labour Modernisation Law (Law 27,802), in force since 6 March 2026, is the biggest change to its employment law in decades. Severance is narrower and more predictable, an employer-funded severance account starts in November, working time is more flexible, and new hires made until April 2027 can carry employer contributions of just 5% for four years.
The underlying cost of an employee is still high: about 1.4 times gross salary for a large company. This guide covers what the reform changed, where the court challenges stand, what one hire costs today, and how Paraguay compares.
Law and practice: Law 27,802, sanctioned 27 February 2026, promulgated by Decree 137/2026, Boletín Oficial 6 March 2026.
| Area | What Law 27,802 changed |
|---|---|
| Severance base | SAC (13th salary), vacation pay and non-monthly bonuses excluded; cap of 3× the agreement average, but never below 67% of real pay |
| Severance as a remedy | Statutory severance is the sole remedy for dismissal without cause; court awards payable in up to 6 instalments (12 for SMEs) |
| Severance fund (FAL) | Monthly contribution of 1% (large firms) or 2.5% (SMEs) into the employer’s own fund, offset by lower social-security contributions; starts 1 November 2026 |
| Working time | Voluntary hours bank; averaging within the 48-hour week; 12 hours’ rest between shifts |
| Vacations | Granted October–April, can be split into blocks of at least 7 days |
| Pay | Wages may be paid in pesos or foreign currency; listed benefits are non-wage |
| Collective bargaining | Company-level agreements can prevail over sector agreements |
| New hires (RIFL) | Employer contributions cut to 5% for 48 months for qualifying hires made until 30 April 2027 |
| Telework law | Repealed from 1 January 2027 |
Law and practice: Law 27,802, arts. 41–43, 51, 57–77 and Title XX; Decree 315/2026 and ARCA RG 5844/2026 (RIFL); Decree 408/2026 (FAL, start moved to 1 November 2026).
The CGT union confederation won an injunction in March 2026 suspending 81 articles. It did not last: the case moved to the federal administrative courts, the injunction was lifted in May, and an appeals chamber confirmed that in July. The law is fully in force, but the main constitutional case is still pending.
Individual judges are another matter. Several labour appeal chambers have declared unconstitutional the article on how pending claims are updated and capped; others have upheld it. Until the Supreme Court rules, expect severance litigation to be less predictable than the statute suggests.
| Gross ARS 2,000,000 a month (about US$1,318) | SME employer | Large employer |
|---|---|---|
| Social-security contributions (18% / 20.4%) | 358,739 | 406,571 |
| Health insurance (obra social, 6%) | 120,000 | 120,000 |
| Work-accident insurance (assumed 2.5%) and life insurance | 50,425 | 50,425 |
| Monthly cost before the 13th salary | 2,529,164 | 2,576,996 |
| 13th salary accrual with its charges | 210,833 | 214,833 |
| Total monthly cost | about ARS 2.74 million (1.37× gross) | about ARS 2.79 million (1.40×) |
| Same hire under RIFL (5% contributions) | about ARS 2.46 million | about ARS 2.46 million |
| Employee take-home (17% withheld) | ARS 1,660,000 | ARS 1,660,000 |
Severance after three years, for dismissal without cause, comes to about ARS 8 million (three months plus one month’s notice), before the proportional 13th salary and vacation. Under the new rule, the 13th salary is no longer part of the base.
Law and practice: Contribution rates under Law 27,541 and Decree 814/2001; non-taxable deduction of ARS 7,003.68 per employee; minimum wage under Council Resolution 4/2026; exchange rate of ARS 1,518 per dollar on 16 October 2026. Work-accident insurance varies by insurer and risk; 2.5% is an assumption.
For workers hired between 1 May 2026 and 30 April 2027, employers can opt into the labour formalisation regime (RIFL) and pay contributions of 5% instead of 18–20.4% for 48 months. The worker must have had no registered private job on 10 December 2025 and none in the six months before hiring. Health insurance and work-accident insurance are still payable.
Opt in at hiring
It cannot be applied retroactively.
Up to 80% of payroll
New hires under RIFL cannot exceed that share.
No rehiring games
Rehiring a former employee within 12 months is excluded.
No FAL offset
RIFL hires do not get the contribution offset for the severance fund.
An employer of record can hire in Argentina for about US$599 a month per employee at the main providers. With the reform, the EOR route is more predictable on dismissal than it used to be, but you still pay the Argentine employment cost underneath. For one or two people it is usually cheaper than a company of your own — see our company guide for when an entity makes sense.
| Same gross salary (about US$1,318) | Argentina | Paraguay |
|---|---|---|
| Employer cost multiple | 1.37–1.40× (about 1.23× under RIFL) | about 1.25× |
| Employee take-home | 83% | 91% |
| Weekly hours | 48 | 48 |
| Probation | 6 months (up to 8–12 by agreement in small firms) | 30–60 days |
| Severance after 3 years, without cause | About 4 months’ pay with notice | About 3 months’ pay with notice |
| Minimum wage, October 2026 | ARS 391,200 | Gs 3,044,000 |
For a regional role that does not need to sit in Argentina, a Paraguayan contract is cheaper on both sides of the payslip and simpler to end. The RIFL discount narrows the gap for new hires until April 2027.
Law and practice: Paraguay: IPS 16.5% employer, 9% employee; aguinaldo one month a year; severance 15 days per year of service; minimum wage from 1 July 2026.
Law 27,802, in force since 6 March 2026, which narrowed the severance base, created an employer severance fund (FAL), added flexible working time, reduced contributions for new hires and changed collective bargaining rules.
No. An injunction suspending 81 articles was lifted in May 2026 and the lifting confirmed in July. Some judges have struck down individual articles in specific cases, and the main constitutional case is pending.
The Fondo de Asistencia Laboral, a monthly employer contribution of 1% (large firms) or 2.5% (SMEs) into an account used to pay severance, offset by lower social-security contributions. It starts on 1 November 2026.
About 1.37 to 1.40 times gross salary including the 13th salary, or about 1.23 times for qualifying new hires under the 5% RIFL regime.
A regime cutting employer contributions to 5% for 48 months for new hires registered between 1 May 2026 and 30 April 2027 who had no registered private job.
One month of normal monthly pay per year of service, excluding the 13th salary and vacation pay, with a cap of three times the collective-agreement average but never below 67% of real pay.
Yes. Since the reform, wages may be paid in pesos or foreign currency.
The entity a payroll runs on.
The same question in a dollar economy.
Tell us the role, salary and where the person could sit. We compare Argentina, RIFL, EOR and Paraguay on real numbers — fixed quote within one business day.
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