05-06-2026

Through Decrees No. 407/2026, 408/2026 and 409/2026 (published in the Official Gazette on June 1, 2026), the National Executive Branch regulated various aspects of the Labor Modernization Law, including the Labor Assistance Fund (“FAL”) and the Registered Employment Promotion Regime.

Below is a summary of the main regulations introduced by the aforementioned Decrees.

1. I) Decree 407/2026 (General Regulations of the Labor Modernization Law)

This Decree clarifies the scope of certain labor law institutions incorporated into the Labor Modernization Law, including:

• Labor registration will be centralized within the systems of the Customs Revenue and Control Agency (“ARCA”), and employers will no longer be required to maintain labor records in either physical or digital books;
• Payroll receipts must include a breakdown of the total labor cost, detailing the various employer contributions, and must be issued in accordance with the payroll receipt template approved by the Decree;
• Medical certificates must be issued in digital format through authorized platforms;
• Greater involvement is granted to the labor authority in the implementation of resignations and termination agreements;
• Criteria are established for the renegotiation of collective bargaining agreements;
• Regulations governing temporary employment agencies have been approved; and
• The enforcement authority for the regime applicable to private passenger transportation and/or delivery services operating through technological platforms has been designated.

1. II) Decree 408/2026 (Labor Assistance Fund)

This Decree establishes the general operating framework for the FAL, without prejudice to the more specific regulations to be issued by agencies such as ARCA or the National Securities Commission (“CNV”), among others.

In this regard, it is important to recall that the FAL is a mechanism designed to finance the payment of certain severance obligations arising from the termination of employment relationships through employer contributions. Such contributions must be channeled through Mutual Funds or Financial Trusts, with each employer maintaining an individual account constituting a separate estate exclusively allocated to the aforementioned purpose.

The regulations provide that, prior to making the first contribution, the employer must select a CNV-authorized entity, choose the investment vehicle, open an individual account, obtain an identifier known as the “FAL ID,” and report it to ARCA. If the employer fails to comply with these obligations, ARCA will withhold the contributions and the CNV may assign an investment vehicle ex officio.

The Decree further establishes that contributions allocated to the FAL will be collected by ARCA and transferred to the investment vehicle selected by the employer. In turn, the employer may offset an equivalent reduction against employer social security contributions, as provided by law.

Additionally, the Decree establishes a minimum waiting period of six months from the date the employer’s first FAL contribution is registered with ARCA. Once this period has elapsed, employers may electronically submit severance payment requests. The information will be validated by the CNV-authorized entity, which must transfer the funds to the employee within a maximum period of five business days, following the release of the corresponding assets from the collective investment vehicle.

The FAL regime will become effective on November 1, 2026.

III) Decree 409/2026 (Registered Employment Promotion Regime)

This Decree regulates the Registered Employment Promotion Regime, which is intended to encourage the regularization of unregistered or improperly registered employment relationships.

Among the benefits granted by the regime are the extinguishment of criminal liability for tax offenses where no final judgment has been issued, removal from the Public Registry of Employers with Labor Sanctions for infringements committed prior to March 6, 2026, and access to the following social security debt forgiveness schemes: 90% for micro and small companies and non-profit organizations, 80% for medium-sized companies, and 70% for all other employers. The non-forgiven portion may be paid under an installment payment plan. Furthermore, full forgiveness applies to contributions and payroll taxes corresponding to the National Health Insurance System, Occupational Risk Insurance providers, and Mandatory Group Life Insurance.

It is important to note that the procedures and deadlines for adherence to the regime, as well as  the terms and conditions applicable to the installment payment plan, among other aspects, have not yet been regulated.

This regime has been in force since June 1, 2026.

Corporate Lawyers

March 2026

This Newsletter has been prepared by Jebsen & Co. for the information of clients and friends. Although it has been prepared with the greatest care and professional zeal, Jebsen & Co. does not assume responsibility for any inaccuracies that this bulletin may present.