Salary Increase for Registered Employees in the Private Sector Decree 14/2020

By means of Decree 14/2020 (the “Decree”), published in the Official Gazette on January 4, 2020, the Argentine Executive ordered a salary increase for employees registered in the private sector, which must be paid in two tranches: (i) the first will be of three thousand pesos (ARS 3,000) corresponding to the salary of January 2020, and (ii) the second tranche of one thousand pesos (ARS 1,000) corresponding to the salary of February 2020 will be added to the previous amount. The total amount of four thousand pesos (ARS 4,000) must be paid in the following months:

The Decree expressly excludes: (i) employees from the Argentine Public Sector; (ii) employees from the Agricultural Labor Regime (rural employees); and (iii) employees from the Special Work Contract Regime for Private House Personnel (domestic service employees).

The grounds explained in the recitals of the Decree refer to the economic crisis, the impairment of the purchasing power of wages, the declaration of the occupational Public Emergency, the Law of Social Solidarity and Productive Reactivation in the context of Public Emergency No. 27,541, the urgency and need to adopt measures to maintain  purchasing power, among others.

The Decree establishes certain guidelines and granting conditions:

• The increase will be absorbed by future collective bargaining;
• The increase should not be considered for the calculation of any additional salary concepts provided for in the collective agreement or in the individual employment contract, if a different criterion is not specifically agreed for this increase through collective bargaining;
• The increase must be recorded in the employee pay slip as an independent item denominated “solidarity increase”;
• When the provision of services is less than the legal or conventional day, employees will receive the increase proportionally according to the guidelines of the applicable collective agreement or the rules of the LCL.

Finally, the following will be exempted from the payment of employer contributions to the Argentine Integrated Pension System (“SIPA”), in relation to the salary increase established in the Decree: (i) Micro, Small and Medium-Sized Enterprises that have a valid certificate called MiPyMe, for the term of 3 months or for the shortest period in which said increase will be absorbed by future collective bargaining; (ii) Micro, Small and Medium-Sized Enterprises that do not have a valid certificate called MiPyMe, provided they obtain said certificate within the following 60 calendar days as of January 5, and; (iii) non-profit civil associations.