After President Javier Milei signed the labor reform project and sent it to Congress, the national government stepped up to clarify some of the points that caused the most controversy, such as changes to vacation, overtime and remuneration.
The person responsible was the Minister for Deregulation and Transformation of the State, Federico Rumpfenegger, one of the interlocutors scheduled for the topic. In press statements, the official emphasized the concept of “mutual agreement” between employee and employer regarding vacation and overtime.
Regarding vacation, he said that “the current law requires one to take vacation in a certain period” and that “requesting this flexibility is a bit what young people are asking for. They decide on it by mutual consent. The law says from October to April and at least seven days, but as long as it is by mutual consent, it can be arranged.”
He brought up something similar regarding overtime and mentioned the idea of the “hour bank” that an employee can have. In this sense, he pointed out that “overtime does not end, it remains exactly the same, but the hour bank is also being established.” “If we stay two hours longer, the employer can say we’ll do two more hours and not come on Friday morning,” he explained, adding that, like vacation, the idea here is that employers and employees can create a more flexible structure.
Regarding compensation, he pointed out that currently “it is one salary per year worked, it is one of the most generous arrangements that exist”, noting that “it is not a problem” because “if there is a conflict or litigation, a judge can say that it is 20 (salaries). It creates uncertainty about dismissal.”
In this sense, Stützenegger claimed that the reform introduces changes aimed at “reducing this uncertainty”. “We have tried to typify the calculation well to avoid those gray areas that give room for litigation. One of the issues of interest, for example, if this happened 15 years ago, brings it to today’s silver. The law establishes this point and the employer entering into this employment relationship does not face this uncertainty,” he added, while with regard to the Labor Assistance Funds (FAL) they will serve to allow employers to cope with “emergencies and layoffs”.
“The government decides to put part of this tax reduction that we can achieve into the labor market. This means a 3% reduction in labor taxes,” he said, explaining that “the employer pays it into a support fund, as a prior savings for contingencies; it is money that the state deposits because there is a part that is not used and remains with the employer to deal with these contingencies, such as layoffs.”
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