10 mayo 2022

Bill for extending parental leave and its contradictions. Published on Cronista.com

The Executive has submitted a bill to Congress to extend the term of marriage and parental leaves, and other important reforms -like in First World countries actually- together with a set of regulations totaling more than 80 Articles, whose cost in terms of social security taxes and business expenses will be covered by the next Administrations because the idea is to implement the system gradually within 8 years, without addressing the most pressing issues under the current circumstances.

Article by Julián A. de Diego published on Cronista.com on May 10, 2022

This Bill establishes a gender-responsive Argentine Comprehensive Care System (SINCA, for its acronym in Spanish).

While some regulations will be enforced immediately and others will be applied gradually within eight (8) years, whereby different reforms are made to meet the mandates under international treaties about such topics as maternity leave with different options, gender diversity, and adoption.

This Bill is based on gender equality, in an attempt to assign a leading role to men in caregiving responsibilities both in case of childbirth or adoption.

The most important reforms include longer maternity leave, from 90 to 126 days, and in stages: for fathers it is extended from 2 days to 90-day stages, with gross wages to be paid by ANSeS through family allowances. In the case of multiple births, a 30-day leave will be added for each baby as from the second child. In addition, companies will have to hire temps to cover for employees on leave. The longer parental leave of 126 days applies as from the effective date of the new SINCA law.

Adopting parents will be entitled to a 90-day leave, which will be enforced as from the effective date of the law. If employees adopt several children, they will receive additional 30 days for each adopted child as from the second child.

A special paid leave of 2 – 6 days is created for couples undergoing assisted reproduction procedures.

It changes the Employment Contract Act about the presumption of resignation or tacit resignation for pregnant and non-pregnant employees who do not come back to work after expiration of the parental leave. Female employees may collect severance pay for termination without cause or compensation under Section 247 (LCT), and the 25% compensation for length of services under Section 245 (LCT) currently in force is no longer applicable.

The new element introduced here is parental leave for independent contractors [monotributistas]: 90 days off collecting minimum living wage. During leave, wages will be paid by the social security system. For non-pregnant independent contractors, the benefit is organized in five stages, ranging from the effective date of the law and within 8 years.

It also extends the period during which the allowance is paid in the case of birth of a child with chronic disease or disability, premature or multiple births.

Non-pregnant women and adopting parents are now entitled to extended leave under the same conditions as pregnant employees, but this change will begin to be applicable on the fourth anniversary of the effective date of the law and the maximum term is reached in three stages within 8 years.

A specific temporary employment contract is created for replacing employees on leave. This contract must include the name of the employee replaced, but this overlaps with the temporary employment contract under the Employment Contract Act and temp hiring through temporary employment agencies.

The allowance for pregnant women, non-pregnant women and adopting parents shall amount to the net taxable salary including health insurance and social security.

In the case of domestic or households workers, salary during maternity leave amounts to the minimum living wage.

The term for maternity or parental leave for non-pregnant and adopting parents shall be considered as “time worked” for social security purposes and for extended leave in order to access the social security benefit.

Maternity or parental leave for non-pregnant and adopting parents, and extended leave shall be taken into account to calculate social security coverage in case of disability or death.

This is a commendable bill, with deferred enforcement, whose cost will be borne by the Administrations to come, with a significant budget for ANSeS and employers who will have to hire replacements for the employees on leave.

The changes in the Employment Contract Act also bring about other costs, and amend the system currently in force by adding compensation payments and higher risks.

The body of regulations under Argentine legal system is still a heavy burden with high labor costs, which reduces business competitiveness, and fails to address the issue of the informal economy or the excluded who live on welfare programs. In other words, in addition to these initiatives, it is essential to sort out priorities.

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