Argentina is an excellent nearshoring destination from which you can hire top talent to fast-track your organization’s growth. The country is home to many highly educated, creative, and innovative professionals with specialized skill sets, and has a talent pool that can benefit your business.
However, without existing operations in Argentina, navigating the local standards of employment and legalities of operation can be difficult.
For these reasons, an Employer Of Record (EOR) can be an ideal solution for companies looking to hire and pay talent around the world without the legal hassle.
In this article, we’ll review the role and responsibilities of an EOR, discuss how to hire and pay remote employees in Argentina through an EOR, highlight the advantages of partnering with an Argentina EOR, and more.
Why Hire Talent in Argentina?
Companies in the US and Canada are increasingly looking to Argentina as a place to expand their workforce. After all, Argentina produces some of the top global talent, particularly in industries like information technology, marketing, communications, and engineering. In a country with free and accessible higher education, this comes as no surprise.
Another advantage for a Canadian or US company hiring in Argentina is real-time collaboration. Argentina’s time zones match up nicely with North American East and West coasts, allowing companies to seamlessly integrate Argentinian staff into their meetings and processes in real-time.
The benefits of hiring in Argentina also extend to culture and language. Argentina puts a strong emphasis on teaching English as a second language in schools. This means communication and cross-cultural collaboration shouldn’t be an issue when hiring. Plus, for companies working with the Spanish-speaking market, hiring bilingual employees in Argentina can be a huge advantage.
The cost of hiring is also a significant benefit in recruiting Argentinian employees. Salaries in Argentina remain well below both US and Canadian averages. This means employing Argentinian talent could be a good opportunity to save on labor expenditures while still employing top global talent.
How Can I Legally Hire in Argentina?
Things can get tricky if you want to legally hire and pay remote employees in Argentina on your own. Let’s go through a couple of ways an employer might engage with talent in Argentina.
Engage Remote Workers as Independent Contractors
Engaging Argentinian workers as independent contractors in Argentina may be the most straightforward approach. However, there are specific factors that companies need to keep in mind to ensure compliance with all legal working conditions when hiring independent contractors. An independent contractor is a self-employed individual who offers their services to a company while having the freedom to set their own working hours and schedules.
Contractors engaged in this manner are treated differently than the internal employees of a company and do not receive a fixed salary or work equipment.
This grants companies greater adaptability and proves to be more cost-effective when hiring international contractors for specialized services and time-constrained projects.
However, companies considering engaging independent contractors must be aware of all tax and legal obligations, as well as local labor laws and the potential punishments that come with misclassifying contractors as full-time employees.
Set Up a Local Entity in Argentina
Navigating the process of legally hiring employees in Argentina can be complex. Essentially, companies that want to legally hire and pay remote employees in Argentina must set up a local entity based in Argentina.
Creating an entity in Argentina provides businesses the opportunity to establish a branch or subsidiary to employ workers directly. This grants foreign companies full autonomy when recruiting local staff, as well as in managing payroll and establishing a local presence.
It's important to note that this undertaking is both expensive and time-consuming, requiring a comprehensive understanding of Argentina's federal labor, corporate, and payroll laws, along with all relevant local regulations. The process can be a legal nightmare if done incorrectly and is only advisable if you plan on maintaining long-term operations in the country.
Partner with an Employer of Record (Argentina EOR)
This is where an Employer of Record comes in handy. Going through an EOR is the easiest way to hire talent in Argentina without worrying about compliance. An Argentina EOR acts as a broker for hiring talent outside of the country you legally operate in. It already has an entity set up with the legal framework in place to do the hiring for you. You, on the other hand, can focus on managing relationships with your employees and prioritizing your company's growth.
What Does an EOR Do?
Simply put, an Employer of Record takes care of the legal procedures while you manage your employees. The legal framework for hiring in Argentina can be quite different from those in the US and Canada, so having someone to help guide you through the legal intricacies of hiring overseas is indispensable. EORs handle everything, including worker visas and work permits, employment laws and contracts, payroll, local compliance, termination, and other HR services.
For example, did you know that employers need to pay a mandatory 13th-month bonus to employees in Argentina? Or that non-compete agreements cannot exceed two years and must include mandatory employee compensation? EORs will take care of details like this and much more.
Contracts and Documentation
An EOR will handle the administration involved in preparing and collecting employment contracts and documentation. This includes employment offers, signed contracts, banking information, and more.
Employee Insurance and Benefits
When the world is your competition, it pays to incentivize new and existing hires with attractive benefits like medical, dental, vision, life insurance, labor risk insurance, prescription drug coverage, and retirement savings plans. A comprehensive EOR platform will have those kinds of benefits built into its service offering.
Vacation and Public Holidays
Employees working in Argentina are entitled to 14 days of paid leave after six months of consecutive service. This figure increases over the years, eventually reaching 35 days of paid annual leave. In addition, employees are entitled to three months of paid sick leave. An EOR can keep track of all this and the corresponding payments on your behalf.
Argentina also has certain government-mandated holidays that companies are must allow their employees time off for. These may vary by region but generally include the following:
- January 1: New Year’s Day
- Two days in February or March (depending on Easter): Carnival
- March 24: Day of Remembrance for Truth and Justice
- April 2: Day of the Veterans and Fallen of the Malvinas War
- Changes annually: Easter Thursday and Friday
- May 1: Labor Day
- May 25: May Revolution Day
- June 17: Martín Miguel Day
- June 20: Manuel Belgrano Day
- July 9: Independence Day
- August 17: Jose San Martin Day
- October 12: Day of Respect for Cultural Diversity
- November 20: National Sovereignty Day
- December 8: Feast of the Immaculate Conception
- December 25: Christmas Day
Maintain Tax Compliance
Employers in Argentina are responsible for a range of taxes and social security contributions based on the employee’s gross salary. These include contributions to the national pension system, public health insurance, social health fund, national employment fund, and more. Employer costs and taxes in Argentina include:
- 16%: Argentine Integrated Pension System (Retirement)
- 2%: Public health insurance (PAMI)
- 5%: Social health fund
- 1.50%: National Employment Fund
- 7.50%: Family's assignations
This can be a tedious process but is necessary to ensure you pay employees in a compliant manner. Thankfully, an EOR will handle the logistics and ensure that payroll is processed properly and per the regulations in the country you are operating.
Administer Payroll
In Argentina, the minimum wage is 69,500 Argentine pesos (ARS) per month.
Employee payments will be made in equal monthly installments on or before the last working day of each month. These monthly payments will automatically be made to all employees registered with your company's payroll.
This includes Aguinaldo (Sueldo Anual Complementario), the 13th-month salary that is paid to all eligible employees. This payment is typically paid in two installments – the first is due in June and the second in December.
It also includes severance pay and overtime pay for full-time employees who exceed Argentina’s weekly full-time working hours. Overtime pay in Argentina, unless otherwise dictated by collective bargaining agreements, is either 50% more than normal wages or 100% if the hours were worked during a designated holiday or rest period.
What Are Your Responsibilities?
While the EOR handles all legal and HR processes, many aspects of the company remain under your purview. You will still be expected to take care of and manage your staff in the same way you would with local hires. That means search and recruitment, company onboarding, training, management, day-to-day communications, progress tracking, and so on will be managed by you.
While your relationship with your employees won’t be affected much by an EOR, you still need to be clear with your staff on the legalities of their contracts and be involved in overseeing the process. Of course, employee retention is also up to you. You will need to consider how you help your staff grow and succeed in their new roles.
What Are the Advantages of Using an Argentina EOR?
Using an Employer of Record to hire talent in Argentina will save you time, reduce costs, and mitigate risks.
Setting up an entity for hiring in Argentina is time-consuming and, frankly, can be a huge headache. Since an EOR is already set up to hire employees in the country, it will be faster and easier to begin hiring. In fact, the process won’t be that much different from hiring locally.
Set-up and HR costs can be quite high if you do it independently, but going through an EOR can save you money. You will also be paying lower salaries than you would be in the US and Canada, so you’re bound to see some positive impact.
Most importantly, though, you’ll be mitigating the risks associated with non-compliance. Because EORs have extensive experience in navigating complex local laws
and government policies, you won’t have to worry about any issues arising as a result of improper hiring practices.
How Do I Choose the Right EOR for Me?
There are a few key things to consider when selecting an EOR in Argentina.
- Local Experience: Does the EOR have experience hiring in Argentina? As discussed earlier, one of the biggest advantages of hiring through an EOR is compliance assurance. Often, this requires extensive experience, so check the EOR’s track record in the country you wish to hire in.
- Service Scale: Do you need an EOR that offers a full suite of services? If you want happy employees that you can retain, you may need to offer benefits like insurance and other benefits packages. Some EORs have systems in place for this, but others may not. Also, certain EORs will offer consulting services to optimize your global hiring practices.
- Data and Systems Security: Protecting your company's intellectual property in a remote working environment is critical. Ensure your platform of choice has a specific agreement outlining how they plan to keep your sensitive information safe and secure.
- Collaboration: Ensure your vendor’s approach to communication and client collaboration aligns with your organization’s approach. Love having a point of contact person? Perhaps all you need is access to a Slack channel to quickly reach your vendor when needed. Whatever your communication style, ensure your vendor can meet your needs.
Borderless: The Employer of Record your Company Needs
Working with an Employer of Record is a requirement for any business looking to hire workers in Argentina without having a physical presence there. However, not all EORs are equipped to handle your unique needs and requirements. Always look for an Employer of Record who has experience hiring and managing workers in Argentina and is well-versed in the country’s complex employment practices.
Borderless is an Employer of Record that is set up to help manage employees in over 170 countries, including Argentina. We can help you legally hire employees in Argentina– giving you access to a massive talent pool without the headaches of traditional global expansion.
Our platform is designed to help companies like yours grow their team and hire, manage, and pay remote employees in Argentina while ensuring you are fully compliant with the country’s tax and employment laws.
Speak with our team today to book a demo and see how we can help you hire the Argentina-based talent your organization needs.
Disclaimer: Borderless does not provide legal services or legal advice to anyone. This includes customers, contractors, employees, partners, and the general public. We are not lawyers or paralegals. Please read our full disclaimer here.
