Argentina’s Senate approved in general terms the labor reform promoted by President Javier Milei’s government. Photo by Matias Martin Campaya/EPA
Argentina’s Senate approved in general terms the labor reform promoted by President Javier Milei’s government after a marathon session that concluded early Thursday morning, amid strong protests and clashes outside Congress.
The government secured a broad victory,42-30. The bill will now move to the Chamber of Deputies for debate. The ruling coalition aims to bring the initiative to a vote before Feb. 27, Perfil reported.
Once the session concluded, the Office of the President released a statement on X describing the Labor Modernization Bill as “a structural reform aimed at updating a system that for decades expelled millions of Argentines from formal employment and hindered the creation of registered jobs in our country.”
The initiative is considered crucial to Milei’s reform agenda, which seeks to shift Argentina’s heavily regulated economy toward a free-market model.
The labor reform proposes sweeping changes to labor relations, with the stated goal of modernizing the job market, encouraging investment and reducing informality, local newspaper La Nación reported.
According to various reports, under-the-table labor in Argentina involves more than 40% of workers — nearly 9 million people — that reached 43.2% in the third quarter of 2025. The phenomenon is concentrated in sectors such as domestic service and construction. It is higher among young people, at 63%, and among women, generating greater levels of working poverty.
Among the central points is flexibility in hiring and dismissal conditions, changes to the calculation of severance pay and creation of specific employer-funded funds to cover future labor compensation.
These have been among the most controversial aspects of the reform, as they would remove the strong protections the country has offered for decades against unjust dismissal, which until now have allowed courts to grant substantial compensation in wrongful termination lawsuits.
The bill also modifies aspects of the workday, enabling schedules of up to 12 hours per day with compensation, adjustments to vacation rules and new forms of hiring, including part-time work and jobs for digital platforms.
In addition, the reform establishes limitations on the right to strike in activities considered essential and strengthens the priority of company-level labor agreements over sector-wide collective bargaining agreements.
At the same time, it incorporates tax incentives to promote employment formalization, reforms to the labor courts aimed at reducing litigation and tax benefits for productive investments.
While the government argues that these measures are intended to energize the economy and reduce informality, labor unions and opposition sectors warn that they could imply a loss of labor rights and have an impact on the financing of the pension system.
The vote occurred in a climate of high tension in the vicinity of Congress in Buenos Aires, Infobae reported, with demonstrations and clashes between groups of protesters and security forces lasting several hours.
The protests, mainly called by unions linked to Peronism that describe the initiative as “enslaving,” led to incidents that included the use of tear gas and rubber bullets by police.
Opponents of the measure say the reform includes what they describe as a worsening of rights related to vacations, leave and sick days, as well as an increase in working hours.
They also argue that it targets the country’s long history of labor struggle, as it limits union rights and the right to strike.
