Labor news

1. Postponement of duplication of severance pay

March 31, 2004 was the deadline for ending duplication of severance pay as provided for by Decree No 1351/03. Faced by this situation, President Kirchner signed Decree No 369/04 that was published in the Official Gazette on April 2, 2004, extending the effectiveness of duplication of severance pay to June 30, 2004.

2. Pension Contributions by Management

The maximum limit of remuneration subject to contributions payable by employers is hiked, establishing, moreover, a minimum amount for calculation of such contributions and that of the personal contributions by workers.

On April 22, 2004, the Decree of necessity and urgency No 491/2004 was published in the Official Gazette gradually elevating the maximum limit on the remunerations that are subject to contributions payable by the employers until said limit proves eliminated as of October 2005.

The Decree expressly determines that the replacement and derogation that is established therein shall begin to rule for contributions that accrue as of the first day of the month following that of the date of publication.

The schedule establishes the following scales:

a) contributions that accrue as of the first day of the month following that of publication of the Decree up to and including September 30, 2004: A$ 6,000;

b) contributions that accrue as of October 1, 2004, and up to and including March 31, 2005: A$ 8,000; and

c) contributions that accrue as of April 1, 2005 and up to and including September 30, 2005: A$ 10,000.

Moreover, it is established that the minimum amount for calculation of such contributions and of personal contributions to be made by workers shall be equivalent to A$ 240.

3. Amendment of remunerative caps and ranges for family allowances

On April 1, 2004, the Official Gazette published Decree No 368/04 establishing amendment of remunerative caps and ranges as set out in Law No 24,713 for family allowances.

Decree No 392/03 determines a salary and wage increase of A$ 28 per month during a period of eight months, until a total of A$ 224 is added to the remuneration in force at June 30, 2003 as remunerative permanent pay. Each monthly increase received by the workers was deducted from the total amount of the A$ 200 allowance set down by Decree No 905/03, until it lapses. The amount remaining for said allowance is to continue to be paid temporarily as a non-remunerative vital item.

This gradual increase was extended to February, 2004. At a later date, it was found that this increase had a direct impact on the calculations of the remunerative caps and ranges, thereby affecting those exceeding the limit set down in relation to contributions on account of family allowances. That is to say that, in spite of the salary increase, workers would find their net income reduced on not receiving the family allowance that they had collected until recently, having exceeded the cap of A$ 1.500.

This impact is also reflected in the changes in the ranges that the workers must suffer on account of the aggregation of remunerations, which will lead to a fall in the amount of the family allowance to be received, by virtue of the corresponding change of range.

Taking into account this analysis, the Federal Government approved Decree No 368/04 whereby those workers that are receiving a remuneration lower than A$ 100 or higher than A$ 1,750 are excluded from the Family Allowance System, save for the family allowances for maternity leave and for disabled children.

It establishes that overtime and the supplementary yearly bonus are to be excepted from calculation of the remuneration received by the worker.

Moreover, article 3 of the Decree No 368 determines amendment of the following subsections of article 18 of Law No 24,7145 and the new amounts that are applicable as family allowances:

a) Allowance per child:

- A$ 40 for workers that receive a remuneration of from A$ 100 to less than A$ 725;

- A$ 30 for those receiving remunerations of from A$ 725 and less than A$ 1,225 and,

- A$ 20 for those receiving a remuneration of from A$ 1,225 to $a. 1,725.

b) Allowance per disabled child:

- A$ 160 for workers receiving remunerations lower than A$ 725;

- A$ 120 for those workers receiving remunerations of from A$ 725 and less than A$ 1,225; and,

- A$ 80 for those receiving remunerations as of A$ 1,225.

i) Allowance for spouse of the beneficiary of the Integrated Pensions and Retirement System:

- A$ 15 for those receiving salaries/wages of less than A$ 1,501.

j) Allowance per child and per disabled child for beneficiaries of the Integrated Pensions and Retirement System:

1) Allowance per child:

- A$ 40 for beneficiaries receiving salaries/wages of less than A$ 501;

- A$ 30 for those receiving salaries/wages of from A$ 501 and less than A$ 1,001; and

- A$ 20 for those receiving salaries/wages from A$ 1,001 and less than A$ 1,501.

2) Allowances per disabled child:

- A$ 160 for beneficiaries receiving salaries/wages of less than A$ 501;

- A$ 120 or those receiving salaries/wages of from A$ 501 and less than A$ 1,001; and

- A$ 80 for those receiving salaries/wages as of A$ 1,001.

Lastly, we must report that this Decree is effective as of March 1, 2004, as expressly stated.