April 2, 2020
We would like to inform you that on April 1, 2020, Executive Order 332/20 was published in the Official Gazette, establishing an Emergency Aid Program for Employment and Production, which is designed to assist those who meet at least one of the following requirements:
- Economic activities severely hit by COVID-19 in the geographic areas where they operate
- Relevant number of employees who have contracted COVID-19 or are in mandatory isolation
- At-risk groups who are required to stay away from their workplace or those who need to stay at home to look after family members who are affected by COVID-19
- Significant reduction in sales after March 20, 2020.
This Program does not apply to those who perform essential services during the public health emergency, and whose employees are exempt from social preventative mandatory quarantine, in accordance with Section 6 of Executive Order No. 297/20 and Administrative Decision 429/20 and relevant amendments, and any other businesses that are not expressly included in the abovementioned rules and do not experience any significant decrease in their activity level.
These are the four benefits offered:
- Social Security Benefits: Extended deadlines or a reduction of up to 95% in employers’ social security contributions to the Argentine Integrated Social Security System.
- Extended deadlines for employers’ contributions to the Argentine Integrated Social Security System: the Tax Authority must regulate this issue. It applies to all employers regardless of the number of employees they have on their payroll.
- A reduction of up to 95% in employers’ contributions to the Argentine Integrated Social Security System in April 2020.
o Companies with fewer than 60 employees as at February 29, 2020: they are directly included in this benefit
o Companies with more than 60 employees as at February 29, 2020: they must file a Crisis Prevention Procedure (Chapter 6 of Title III of Act No. 24013)
The benefit of reduction will be established by the Chief Cabinet Office based on the parameters set forth in the regulation to be issued.
- Compensatory Allowance for Salaries: For companies with up to 100 employees
This Allowance is an amount paid by ANSeS (Social Security Administration) to all or some employees covered by collective bargaining (Act No. 14250 –consolidated text 2004- as amended).
- Up to 25 employees: 100% gross salary, in the maximum amount of one (1) Adjustable Minimum Living Wage currently in place
- Between 26 and 60 employees: 100% gross salary in the maximum amount of up to 75% of the Adjustable Minimum Living Wage currently in place
- Between 61 and 100 employees: 100% gross salary in the maximum amount of up to 50% of the Adjustable Minimum Living Wage currently in place.
This is a payment on account for compensation to the staff affected, and employers must pay the remaining balance to complete the respective salaries. The balance is deemed to be salary to all intents and purposes.
By applying to this benefit, employers must withhold the relevant portion to contribute to the Argentine Integrated Social Security System, social health care and the National Institute of Social Services for Retirees and Pensioners.
If employers suspend work, the amount of the allowance will be reduced by 25% and may be deemed to be a portion of the non-salary benefit as defined in Section 223bis of the Employment Contract Act.
- REPRO (Productive Recovery Program) – Health Emergency Aid – For companies with more than 100 employees
Non-contributory amount for the Argentine Integrated Social Security System funded by the State to employees at the private sector covered under collective bargaining in accordance with Act No. 14250 (consolidated text 2004), as amended.
The payment per employee amounts to ARS 6,000 minimum and ARS 10,000 maximum. The enforcement authority will offer a new, differentiated and simplified Productive Recovery Program keeping Resolution No. 25 of September 28, 2018 by the former Labor Secretary at the then Department of Labor in place to the extent possible.
- Integral System of Unemployment Benefits
Those employees who meet the requirements set forth in Acts No. 24013 and 25371 will receive an unemployment benefit based on the provisions of Section 11 of this Executive Order.
Those companies that receive the abovementioned benefits will have to report their payroll and activities affected to the Tax Authority.
The Department of Labor will a) consider the information and documents reported by the company; b) gather any additional data to check and/or get more information that that initially provided and request any necessary supporting documents; c) conduct assessment visits to company facilities to confirm and/or correct conclusions.
This Executive Order will be enforced in relation to companies’ economic results between March 20 and April 30, 2020, inclusive.
It is worth mentioning that this is all subject to regulation, and the Tax Authority will have to adapt the social security contributions calculation systems to such regulation.
Julián A. de Diego Paula Analia Babij