Argentina’s Senate passed President Javier Milei’s labor reform Friday, delivering the libertarian leader one of his most significant legislative victories. The law fundamentally reshapes the country’s employment regulations in what supporters call essential modernization and critics warn will gut worker protections.
The measure cleared with 42 votes in favor. Twenty-eight senators voted against. Two abstained. The bill now goes to President Milei for signature after passing both legislative chambers.
The reform eliminates traditional overtime payments and replaces them with a “time bank” system where employers decide when accumulated hours can be taken as time off. Severance calculations will exclude bonuses, vacation pay, and thirteenth salary payments. The base calculation cannot exceed three times the average position salary.
Companies can negotiate wages directly with individual workers, bypassing sector-wide union agreements. Employers can implement “dynamic wages” based on productivity or merit. They can pay in foreign currency or goods rather than cash.
Workers must request permission for union assemblies at workplaces. Disrupting non-participating employees becomes a sanctionable offense. Several sectors including telecommunications, hospitals, waste collection, education, aviation, and port operations are now deemed essential services requiring 75 percent minimum operation during strikes.
Thousands protested outside Congress as lawmakers debated. Clashes with police led to deployment of water cannons. Labor unions organized a nationwide strike Thursday, shutting factories and businesses across Buenos Aires. Opposition lawmakers condemned the bill during marathon debate sessions. Peronist deputy Horacio Pietragalla compared it to slavery-era conditions.
The government argues the changes will reduce Argentina’s massive informal employment sector and attract foreign investment. Roughly half of Argentine workers operate outside formal employment structures. The country has maintained the same number of payroll jobs for a decade despite adding three million residents.
The reform follows Milei’s October midterm election victory backed by U.S. President Donald Trump. The legislation marks a shift from his chainsaw-wielding outsider persona to pragmatic negotiation. He removed controversial provisions targeting union financing to secure centrist votes. The bill returns to the Senate due to last-minute modifications removing a provision that would have halved some sick leave payments.
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