Por 10 agosto, 2021 No Comments

How to do it within Argentinean law
By the end of 2020, many clients contacted us (mainly companies related to IT, software and blockchain industries) regarding the possibility to pay (totally or partially) customary and/or eventual remunerative amounts to their employees in US dollars and/or in other currencies which are not considered legal tender in Argentina.
In highly competitive markets, where skilled employees can easily be hired by international companies with high salaries, lots of fringe benefits and high-digitalization, Argentine companies must fit their wages schemes to be competitive at international levels. Most of these companies provide, besides wages and salaries, bonuses as a reward for high-productivity achieved by teams, employees and /or by the company itself. Their aim is not only to keep talented workers in their payrolls but also to recruit other potential candidates for their companies; in competitive markets, aspirations play a key role.
These tools, together with fringe benefits and labor flexibility, proved to be very effective in the headhunters and recruitment markets as well as a way to preclude talented employees from searching better opportunities. The fact of working without fixed labor hours and setting goals are very attractive; in this sense, home office brought an innovative and attractive working style.
Most companies engaged in the above mentioned industries started to evaluate the possibility of paying wages and salaries in US dollars, in cryptocurrencies and/or in kind, for some eligible skilled employees or even for the complete payroll, being these alternatives much more attractive than the payment in pesos.
Whenever a client contacts us seeking professional advice regarding this matter, the first thing we recommend is to analyze the availability of the goods intended to be used for payment. If the company intends to pay in US dollars, the terms of payment are to be considered for exchange purposes upon pay date. Moreover, both workers and companies must dispose of bank accounts for remittance purposes. It is advisable to contact the bank through which wages and salaries are paid for further details.

A. Legal Tender

First, we will define what is considered “money” in our lawful system. Section 765 of our Civil and Commercial Code (“CCCN”) sets forth that the obligations that consist of delivering foreign currency are not considered as obligations of giving money but of giving determinate things, so we can conclude that, according to our lawful system, foreign currencies are not considered as “money” but as “goods”. The only currency considered as “money” is the Argentine peso.
This distinction is particularly relevant at the moment of agreeing any remunerative amount in favor of workers and employees, which should be considered as payment in kind and, pursuant to Labor Law, these payments can be made up to a certain proportion.

B. Remunerative condition

Second, it is necessary to define if the amounts intended to be paid are remunerative or not. Pursuant to Section 103 of the Labor Contract Law (“LCT”), remuneration is “the compensation due to an employee for services rendered or work performed”. This ample definition is complemented by Section 104 by listing fringe benefits and giving examples of non-remunerative amounts.
As from early 2000s to date, all law amendments and jurisprudence were addressed within the legal scope by acknowledging as non-remunerative amounts only those amounts considered as such by law (such as receipt evidenced travel expenses), by decree or through homologation of the Ministry of Labor. The reason of this restrictive policy is to protect the Social Security System: if more non-remunerative items are recognized, contributions to the Social Security System could drop since it depends on the private sector.
In this sense, any bonus or wages portion will be considered to be remunerative, composing the calculation basis for any labor claim and being subject to the payment of social security contributions regardless of the currency applied.

C. Payment in kind

Section 107 LCT allows payment in kind for a portion of wages and salaries; however, this type of payment can only apply up to a 20% of the total remuneration amount. It is relevant to point out the background in which the LCT was enacted (1976), since it was customary for the time the partial payment of wages in kind, mainly with goods that were traded by employing companies and/or with goods that were available at a lower cost and that were not easily exchanged by other goods or money. In no case labor legislation was intended for the satisfaction of those willing to receive their salaries in kind rather than in cash.
Considering the above, a contingency could arise if an employee claims the difference in pesos between the amount paid in dollars and the limit of 20% to be paid in kind. We understand this would be an illogical claim if the employee consented to receive his/her pay in a “more attractive” kind than legal tender; our interpretation is that, if duly instrumented, the employee’s rights were not violated (although a labor claim is possible and a judge may order on the contrary).

D. Composition of the remunerative amounts

Another key factor is to determine the basis on which the 20% in kind shall be calculated if allowances and bonuses exist. We understand that the 20% is to be calculated over the lump sum of all remunerative concepts. However, we recommend to analyze this issue on a case-by-case basis, thus relying on legal and accounting professional advice.

E. Fringe benefits
It is important to know the nature of every single concept pretended to be paid in kind. Remuneration constitutes an obligation for employers but there are other concepts that can be instrumented as fringe benefits (bonuses, payments beyond the applicable Collective Bargaining, etc.). To enable such amounts to be considered as payments beyond the agreed compensation, it is a vital issue how to draft the relevant documentation.
It is essential the correct wording of pay stubs showing all itemized concepts such as gross wages, taxes, deductions and net wages. We also remark the importance of the documentation to be signed between employers and employees regarding the conditions governing entitlement. The payment of customary amounts by companies without adequate supporting documents represents a serious contingency for companies (regardless of the currency applied).
Specially bonuses require to be adequately foreseen in documents stating the guidelines in which they are awarded such as seniority, performance, position, etc., calculation methods, type of reward and date of payment. For example, if the company’s policy sets forth that bonuses are payable in US dollars currency, workers and employees will be entitled to demand payment in such currency. Consequently, considering the ups and downs of the exchange market in Argentina, we recommend to those companies willing to pay in kind, to seek professional advice regarding the pertinent documentation to be signed.

F. Tips for payment in kind

Notwithstanding legal and accounting advice on a case-by-case basis, this article will make some recommendations to avoid future risks. As said before, bonuses and/or any amount paid beyond wages and salaries must be clearly stated in documents operating as a policy of the company. It is not advisable to include in such policy any detail specifying that payments will be made in a determined kind (unless the company has decided that all payments in kind will be made in such specific kind).
These documents must be drafted in a comprehensible way and in a language completely understandable for workers and employees. They must stipulate the conditions required to define the benefit, the currency to be applied and the calculation method. It must be noted that a company’s policy applies to all workers and employees.
All documents relating to remuneration payment terms must bear the employee’s signature, full name and date in order to avoid any misunderstanding regarding consent. Further to the company’s policy, other documents can be drafted for spot bonus awards. An expert wording for such documents will help to avoid any eventual bad interpretation of acquired rights.
Given the practical side of digital documents and signatures (mainly in the industries mentioned here), we have to point out that any document bearing digital signature will not have the same validity as those bearing handwritten signatures. For that reason, signatures should be digital, not only electronic ones. We recommend to read our article on Digital Signature .

G- Availability for payments in kind

For practical purposes, we will not analyze here all available currencies since they are equivalent from the legal point of view. We will only focus on the US dollar (among all foreign currencies) which is the only one accepted for transactions and accounts at local banks additional to the peso. The legal analysis can be applied to all hard currencies. We emphasize our recommendation to contact your banks together with the accountant and the tax expert.
Another alternative could be payment in cryptocurrencies. For the time being, their legal nature is quite different from legal currencies but the above applies to them. The only difficulty could arise upon calculation of wages and social security contributions. In such a volatile market, there exist (sometimes big) differences in the crypto assets appraisals in dollars between the different market players, added to the different exchange rates with respect to the peso.


Even though this issue is foreseen in our legislation, the actual scenario is the opposite of the one at the moment the law was enacted. In this sense, it calls for measures (because law tends to restrict payment forms which are beneficial towards workers and employees). We recommend a detailed survey of all documents related to the calculation of remunerative amounts and of those setting forth payments in other currency rather than the Argentine peso. There does not exist one solution for all companies; hence, each case deserves an analysis setting the guidelines for goals achievement and minimizing the impact of possible contingencies. We remain at your disposal to go deeper into this matter in order to provide the best solution for your company.

Diego J. Nunes
Estudio Nunes & Asoc.