Modification of the Labor And Production Emergency Assistance Program

On April 20, 2020, the Executive Decree No. 376/2020 (the “Decree”) was published in the Official Gazette, through which the Argentine Executive introduced changes to the Labor and Production Emergency Assistance Program (“ATP”).that had been set by Executive Decree 332/20 and the benefits established there.

Likewise, on April 21, 2020, Resolution 4702/2020 of the Argentine Tax Authority (the “AFIP” after its acronym in Spanish) was published by means of which said entity reopened up to and including April 23  the term for employers to register to be eligible for the benefits under the ATP Program.

Modifications to the ATP Program

• The Decree replaces the “Compensatory Allowance” and the “REPRO” (Productive Recovery Program), both destined to the personnel included in a collective bargaining agreement, by the “Complementary Salary” for all  private sector employees. This eliminates the distinction of employers according to the number of workers set forth in Decree 332/20. The requirement to present a Crisis Prevention Procedure, established in Decree 332/20 for companies with more than 60 employees, is also eliminated. In this way, the Crisis Preventive Procedure no longer needs to be initiated to apply for any of the benefits;
• Incorporates a “Zero Interest Rate Credit” for monotributistas (independent taxpayers under the simplified tax regime) and self-employed personnel;
• Modifies the “sales” criterion by the “billing” criterion, and moved back to March 12 the date from which the substantial reduction in billing must be evidenced as a requirement to access the ATP Program.

New Requirements to access the Benefits

The Decree modified one of the requirements to access benefits (see point “c”). Currently, the requirements are:

a) Economic activities that are critically affected because of the geographical areas where they are carried out; and/or

b) To have a significant number of employees infected by COVID-19 or in mandatory isolation or with a work exemption (e.g. risk group), or in the care of minor children, and/or

c) A substantial reduction in its billing after March 12, 2020.

Modifications to the Benefits

The benefits that employers may access under this program were modified. The current benefits are:

1. Postponement or reduction of up to 95% of the payment of employer contributions to the Argentine Integrated Social Security System;
2. Complementary Salary: This benefit replaces the “Compensatory Allowance” and the “REPRO” of Decree 332/20, and consists of an allowance that will be paid by the Argentine Administration of Social Security (ANSES) to all employees in a labor relationship of the private sector (included or not in the collective bargaining regime of Law 14,250). This Supplementary Salary will be equivalent to 50% of the employee’s net salary, corresponding to the month of February 2020, and may not be less than a minimum wage or exceed two minimum wages, or the total of the net salary el the employee. The Complementary Salary will be considered on account of the payment of the remuneration or the cash payment in case of suspension of the employment (Section 223 bis of the Labor Contract Law).
3. Zero Interest Rate Credit: It consists of financing a loan to be credited in the credit card of the people adhering to the Simplified Scheme for Small Taxpayers, and self-employed personnel. Beneficiaries will be able to access credits with a subsidy of 100% of the total financial cost.
4. Comprehensive unemployment benefit system: unemployment benefit will be increased from six thousand pesos (ARS 6,000) to ten thousand pesos (ARS 10,000).

The benefits provided for in the Decree may be extended until June 30 or until October 30, 2020, at the consideration of the Chief of the Cabinet of Ministers.

Reopening of the terms before the AFIP

The AFIP ordered the exceptional reopening up to and including April 23 of the terms to access subscribe for the benefits under the ATP Program, established under subsections a) and b) of Section 2 of the General Resolution 4693.