This Thursday in Argentina, the government of President Javier Milei sent to Congress the Labor Modernization Bill , which, among the points that has generated the most controversy, is that employers can apply “payment in kind”, so that employers can pay part of the salaries with goods or services (such as transport tickets, food vouchers, among others) instead of money.
According to the Argentine media outlet Perfil , historically there was a 20% cap on in-kind compensation; however, unions argue that the new bill does not mention percentages and allows for the possibility of expanding that limit.
Sergio Eduardo Capozzi, a labor lawyer and congressman from the neighboring country, considered the measure “a step backwards (…) like going back to the 90s.”
“We would return to the food vouchers, which were created in the 1990s to help workers who did not have a cafeteria within the company, and later that became a form of currency,” he recalled.
The parliamentarian argued that there were workers who were exchanging these vouchers - such as those used in a supermarket - for cash, and thus using that money to cover their most urgent needs.
According to Perfil, the legislator believes that enabling unlimited in-kind salary payments would be risky; and the reform project needs to organize the vacation system and clarify how the flexible distribution of hours will work.
Javier Milei’s labor reform, in its 92 articles, would stipulate allowing a workday of up to 12 hours, which has also generated criticism in the country.
It is specified that a worker could work up to 12 hours per day, as long as the average of 48 hours per week is not violated.
Milei’s labor reform
The President’s Office in Argentina highlighted in a statement this Thursday that the project seeks to reform a system that “remained virtually unchanged and ceased to offer adequate responses to the current challenges of the labor market.”
“For decades, the combination of high costs stemming from litigation, vague rules, excessive bureaucracy and a rigid labor structure has hampered the creation of formal employment, particularly affecting young people, informal workers and small and medium-sized enterprises,” the official text added.
According to the announcement, the president echoed the demands of millions of workers excluded from the system due to current legislation, and the initiative seeks to move beyond a labor model that no longer reflects the country’s reality and advance towards a system that generates more employment, more opportunities, and greater freedom for all Argentinians.
The Executive also requested that Congress “give swift and responsible treatment” to the project.
The project, which the Government seeks to debate before the end of the year, proposes structural changes in the labor market, such as making it easier to hire and fire staff; and limiting the exercise of the right to strike.
Labor reform is shaping up to be one of the central issues in Argentina in the coming weeks, in a scenario where the ruling party is strengthened in Parliament after the swearing-in of the new deputies and senators elected on October 26, when it obtained more than 40% of the votes.