Regulations Governing the Labour Assistance Fund (FAL)

By means of Decree No. 408/2026, the National Executive Branch has regulated the so-called Labour Assistance Fund (Fondo de Asistencia Laboral - "FAL"), created under Law No. 27,802, while postponing its entry into force until November 2026.

The key aspects of the regulation are as follows:

Prior to making the first monthly contribution to the Labour Assistance Fund ("FAL"), employers must select an entity authorised by the CNV, choose the corresponding authorised collective investment vehicle (mutual investment funds or financial trusts), and arrange for the opening of their individual employer account.

The authorised entity will assign a unique identifier ("FAL ID") to the employer's individual account and must inform the employer of the bank account of the collective investment vehicle designated to receive contributions.

The employer must provide the FAL ID to ARCA so that the agency can allocate the relevant contributions accordingly. If the employer fails to provide a FAL ID, ARCA will nevertheless withhold the amounts corresponding to the FAL and will allocate them once the employer submits the relevant FAL ID. Such amounts will remain unallocated until a FAL ID is provided. If one month elapses from the due date for payment of the FAL contribution without a valid FAL ID having been reported, ARCA will notify the CNV, which will then assign ex officio an authorised collective investment vehicle through an authorised entity. The employer may subsequently transfer to a different investment vehicle.

Although subject to further implementing regulations, the Decree provides that entities authorised by the CNV to manage FAL funds may invest only in financial instruments or negotiable securities issued and traded in Argentina and may not invest abroad.

With regard to the procedure for validating and paying severance compensation, authorised entities must implement mechanisms enabling employers to generate and submit electronically the sworn statement required to request payment of the corresponding severance amounts.

Through this mechanism, employers must provide, by way of sworn statement, the following information:

a) the employer's tax identification number (CUIT) and registered address;

b) the registered employee's full name and labour identification number (CUIL);

c) complete details of the employee's bank account to which payment is to be made;

d) the date and grounds for termination of the employment relationship. For this purpose, a copy of the termination instrument or agreement must also be attached to the sworn statement, including, where applicable, the agreement referred to in Section 241 of Employment Contract Law No. 20,744;

e) details of the severance calculation, including the highest normal and customary monthly remuneration taken into account, date of commencement of employment, recognised length of service, and any other relevant components;

f) the amount to be transferred, expressly indicating whether it constitutes full or partial settlement of the applicable severance entitlement; and

g) the case file reference and number, the court or conciliation service before which the matter was processed, and any relevant decisions or judgments, where applicable.

Upon receipt of the sworn statement, authorised entities must, prior to making any payment from FAL resources, verify only the following:

(i) ownership of the employee's bank account identified in the sworn statement;

(ii) the employee's status as a registered employee of the relevant employer; and

(iii) that the sworn statement contains all information required above.

Once these requirements have been satisfied, the authorised entity shall:

• liquidate the employer's position in the collective investment vehicle in accordance with procedures established by the CNV;
• transfer the relevant amounts to the employee's bank account specified in the sworn statement within a maximum period of five business days, counted from the business day following the complete and correct submission of the sworn statement;
• record the withdrawal in the employer's individual account statement; and
• notify the Secretariat of Labour of the transfer, enclosing the relevant proof of payment together with the sworn statement submitted for the severance payment request and any supporting documentation, where applicable.

The Decree also establishes procedures applicable in specific situations, including employee transfers and transfers of business undertakings.

Compliance with obligations relating to the FAL will be supervised by the Secretariat of Labour, ARCA and the CNV in order to detect potential fraud or non-compliance with the regime.

The Secretariat of Labour, ARCA, the CNV and the Ministry of Economy are required to issue clarifying and supplementary regulations within 45 business days.

Finally, the effective date of the FAL regime has been postponed until 1 November 2026.