The President of Argentina, Javier Milei
The Argentine Senate is about to vote — and, it is expected, approve — a broad package of labor changes that will be one of President Javier Milei’s biggest legislative victories.
The so-called Labor Modernization Law aims to review central parts of the legal framework that has regulated salaried work in the country since 1974 and responds to an old complaint from the business sector: the rigidity of standards, described by many employers as an obstacle to hiring and a factor of legal uncertainty by making dismissals difficult and expensive.
The text under discussion introduces major changes to the rules on hiring, firing and working hours. One of the most sensitive changes is the possibility of extending the working day up to 12 hourscompared to the current eight, as long as the weekly ceiling of 48 hours is maintained.
The package also provides that the payment of overtime can be replaced by compensatory rest periodsinstead of extra pay.
The proposal also provides for employers to make monthly contributions to a fund dedicated to covering future compensation costs. The idea, according to the logic of the government and the package’s defenders, is to transform a potentially high and uncertain cost into a more predictable mechanism.
Milei has publicly defended that the reform does not take away rights: on the contrary, it “gives” rights, cites the , and argues that the current rules have pushed a significant part of the workforce into informality, without contracts and without social protection.
The new reform also includes measures aimed at contain the power of unions: limits the right to strike in sectors classified as essential, imposing maintenance of 75% of activity during shutdowns. For the government, it is about guaranteeing minimum services and reducing the economic impact of prolonged strikes.
The approval process was marked by months of tense negotiations, protests and clashes between protesters and police forces in the vicinity of Congress.
The trade unions see the proposal as a direct threat to the advances achieved over decades and have already announced that, if the law is enacted, they will be able to challenge it in court for alleged unconstitutionality. It is the new step in the economic transformation led by the liberal economist, who since taking office, has applied a program of austerity and deregulation with cuts in public spending, reduction of subsidies, closure or merger of ministries, elimination of price controls and changes in the exchange rate regime.
These measures, largely implemented by decree, helped to slow down triple-digit inflation and stabilize some market indicators, but they also intensified social tensions.
This labor reform, unlike many previous decisions, requires votes in Congress, and analysts believe that it will act as a test of Milei’s ability to build majorities and accept concessions: approval could pave the way for even more difficult changes, such as tax and pension reforms, which the president intends to advance within a tight horizon.
