BUENOS AIRES, Argentina — Argentina’s Senate approved President Javier Milei’s Argentina labor reform Friday, clearing a far-reaching overhaul that would let employers extend daily shifts to as long as 12 hours and rewrite rules for hiring, firing and collective bargaining. Milei called the vote “historic” and said the changes are aimed at boosting investment and pushing more workers into the formal economy, Feb. 27, 2026.
The bill passed 42-28, with two abstentions, giving Milei one of his biggest legislative wins since taking office in December 2023, according to Reuters coverage of the final Senate vote. Outside Congress, police and protesters clashed before the debate, and at least three people were arrested, the Associated Press reported.
Supporters argue the Argentina labor reform will lower labor costs and encourage job creation in a country where roughly two in five workers are employed off the books. Labor unions and opposition lawmakers say it weakens protections built into Argentina’s union-driven system since the rise of Peronism and could make layoffs and longer shifts easier to impose.
Argentina labor reform: what the Senate approved
The core of the Argentina labor reform is a set of changes intended to give employers more flexibility and reduce litigation risk. One of the most debated provisions expands the workday framework by allowing an “hours bank” arrangement that can stretch shifts up to 12 hours while keeping the weekly limit at 48 hours, with the extra time banked for future time off rather than paid as overtime, according to a Buenos Aires Herald breakdown of the bill.
Other provisions highlighted by lawmakers and analysts include:
- Severance and dismissal costs: The package lowers severance costs by changing what counts toward compensation and creates an employer-financed severance fund using contributions currently earmarked for the national pension system, a structure opponents say could strain pension resources.
- Pay and contracts: It permits salaries to be paid in foreign currency and relaxes certain hiring rules.
- Vacations and workplace rules: It changes vacation scheduling and adds requirements around workplace union assemblies.
The Argentina labor reform also expands the list of “essential” sectors that must maintain minimum operations during work stoppages, tightening the practical reach of strikes. Those limits have been a flashpoint for unions, which argue the law cuts into a constitutional right.
Argentina labor reform and street backlash
The Senate vote capped a turbulent legislative push that has repeatedly spilled into the streets. Argentina’s largest union federation, the General Confederation of Labor, has framed the Argentina labor reform as a rollback of basic workplace guarantees and has threatened court challenges.
The Chamber of Deputies, the lower house of Congress, approved the bill after a marathon debate and sent it back to the Senate for final clearance, despite a nationwide strike the day before, according to Al Jazeera’s report on the lower-house vote. In Congress, Milei allies argued the existing framework locks millions out of formal employment; critics countered that the Argentina labor reform tilts power toward employers in a country already hit by inflation and a yearslong squeeze on wages.
Earlier attempts at Argentina labor reform
Milei’s push has been building since the start of his presidency. A labor appeals court temporarily blocked labor-law changes contained in his “mega-decree,” a sweeping deregulation package, after a union challenge, according to a Reuters report on the court suspension.
Union leaders also tested Milei early with large-scale walkouts, including a major strike and protest that shut down transport and other sectors as the government pressed ahead with austerity and reform proposals, according to Reuters coverage of the January 2024 strike.
Argentina’s labor system has long proved politically combustible. Former President Mauricio Macri scaled back and delayed a planned labor overhaul after union pressure and street unrest, a reminder of how difficult it can be to change labor rules even under business-friendly governments, according to a Reuters account of Macri’s 2018 retreat.
Argentina labor reform: what happens next
The Argentina labor reform now moves into implementation, which will require executive steps to enact the law and issue regulations. Union leaders and opposition figures have signaled they will challenge parts of the package in court, raising the prospect that, as with earlier reform efforts, the most contested provisions could face delays or partial suspensions.
For Milei, the vote is a political marker he can point to as he argues his pro-market agenda is gaining traction. For workers and employers, the impact of the Argentina labor reform will hinge on how quickly regulations are issued, how courts respond to legal challenges, and how companies apply new flexibilities amid a still-fragile economy.
