Despite its long-term significance, last week’s passing of the labor reform bill by the Senate failed to impress the market

ARGENTINA - In Brief 17 Feb 2026 by Joaquin Cottani

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Summary On Thursday of last week, the Senate approved President Milei’s labor reform bill, officially known as Ley de Modernización Laboral, after a marathon debate with 42 votes in favor and 30 against. The approval came amid significant protests outside Congress, where unions and workers clashed with police, criticizing the reform as anti-labor. A previous version of this bill was embedded in the 2024 Ley de Bases but was taken out to secure passage of the law. The current version is a more negotiated and incremental stand-alone that effectively repackages the labor agenda into a more politically viable format. The administration frames the reform as a labor-market modernization designed to reduce hiring costs, incentivize formal employment, lower litigation risks, increase contractual flexibility, align labor law with new production models, encourage investment, and reduce labor informality. The government is aggressively pushing for final approval before regular congressional sessions begin in March. Broad agreement among allied Chamber of Deputies legislators suggests that, if the coalition holds, the bill could be passed with few changes at the end of this month, and presidential sanction could occur shortly after. Key changes to existing labor legislation The main articles of the new legislation, as it stands now, can be classified according to the law's main objectives. Measures aimed at incentivizing formal hiring practices Adjusts penalties and fines related to unregistered employment.Eases registration procedures and compliance requirements for employers. The goal is to reduce Argentina’s large informal sector, which comprises between 40 and 50% of the labor...